Philip Hammond has delivered his first autumn statement as chancellor. These are the key points, with political analysis
Rowena Mason, deputy political editor: The chancellor blames the lower growth forecasts for next year on higher predicted inflation and economic uncertainty, mostly attributable to the vote to leave the EU. That will annoy the Brexiters who dismiss the economic impact of the referendum, but it is still not forecasting a recession predicted by remain campaigners before 23 June.
RM: Philip Hammond said the government was committed to maintaining fiscal discipline, prompting scornful laughter from the opposition. The lack of a firm date for returning to a surplus ditches the last of George Osborne’s old budgetary targets, which he repeatedly broke and delayed.
RM: Hammond is keeping Osborne’s idea of a welfare cap but does not resist a dig at his predecessor as he raises it to a more ‘realistic level’. He commits to no further welfare cuts than those already announced but the retention of a cap will dash the hopes of those MPs, including some Tories, who want him to reverse cuts to universal credit.
RM: The chancellor is channelling Gordon Brown and Ed Balls as he focuses heavily on solving the productivity problem that means UK output lags behind those of other developed nations. There are few details yet on how this will be distributed but Hammond says the aim is a ‘high-wage, high-skill economy that will deliver higher living standards’.
RM: Successive chancellors have tried to give a boost to housebuilding but Hammond has had a very positive reception from the Royal Institution of Chartered Surveyors, who say this plan means he has listened to calls for more housing for rent and affordable homes to buy.
RM: This appears to be part of the way Hammond is aiming to address productivity problems, as workers and businesses are hampered by poor transport links.
RM: Again, Hammond is prioritising infrastructure aimed at improving business output. Money is going towards ‘hyper-fast’ broadband, although some may be frustrated that millions of rural households still do not have good connectivity.
RM: Innovation is another big theme of this autumn statement, with Hammond stressing the need for long-term investment in industries for the future.
RM: Local authorities will welcome more money for infrastructure. Councils are also getting more devolved powers, including control over the adult education budget. However, with this control comes greater responsibility for carrying out cuts.
RM: This is a naked piece of political mudslinging as Hammond spends several minutes extolling the greatness of the mansion that inspired Jane Austen’s Pemberley in Pride and Prejudice, which he claims was threatened by opencast mining nearby that was authorised by a previous Labour government. However desperate the need for repairs, there may be eyebrows raised at the sum going to the house and prominence given to one residence during Hammond’s short speech.
RM: This is simply meeting a pledge made under David Cameron but there is a lot of analysis suggesting it will not be enough, especially given the pressure that social care cuts are putting on the NHS.
RM: May’s government has clearly anticipated a problem in prisons that could quickly spiral further out of control, and acted to put more money into prison safety.
RM: Some had interpreted Theresa May’s comments that she wanted the UK to have the lowest corporation tax rate in the G20 as a sign that she could slash it as low as 15% – the rate promised by the US president-elect, Donald Trump. However, Hammond has held off for now.
RM: The crackdown on fraudulent whiplash claims was a widely trailed measure aimed at helping ‘just about managing’ families. But it looks like this could be offset at least partially by the higher consumer tax on insurance premiums.
RM: This is a revenue raiser for the Treasury as employers will have to pay national insurance on benefits like mobile phone contracts and gym membership. Experts suggest the incentive for businesses to offer work perks will plummet.
RM: Another year, another crackdown on tax avoidance. The measure is a good one though. It is specifically aimed at closing down the scheme the Guardian exposed last week where employment agencies make windfalls by exploiting the flat rate scheme.
RM: This will raise a significant amount for the Treasury and cost employers on average £7.18 per worker. This is because the earnings threshold above which a business has to pay NI contributions will not rise with inflation but a modest £1 next year, bringing it into line with the threshold for employees.
RM: Hammond built this passage up so much that it sounded like he was about to announce another big rise in the personal allowance. However, he is simply confirming Osborne’s previous pledges.
RM: This was another widely trailed policy. It will be good news for workers on minimum wage jobs but the rise is not big enough to keep pace with Osborne’s promise that the rate will reach £9 by 2020.
RM: This is designed to incentivise people on part-time jobs to increase their hours, as it will slow the rate at which in-work benefits are withdrawn for those on universal credit. It has been welcomed by campaigners as a first step, but Iain Duncan Smith, the former work and pensions secretary, has said it does not go far enough.
RM: This is an agenda to help the ‘squeezed middle’ that could have been outlined by the former Labour leader Ed Miliband. In fact, when Miliband proposed the ban on letting agency fees, the Conservatives claimed it would lead to higher rents and less choice for tenants.
RM: This may be the help for savers that Theresa May hinted at in her Conservative conference speech when she claimed savings were being eroded by monetary policy. That appeared to be an unprecedented intervention in the activities of the Bank of England. However, she might simply have had this retail offering from the government in mind.
RM: It is becoming quite politically impossible for a chancellor to raise fuel duty, given the annual pressure against any more rises from Tory backbenchers and the rightwing press.
RM: Hammond has a reputation for being dull but this seemed to be an attempt at a dry joke. He announced dramatically that he was about to abolish the autumn statement, giving the impression he was about to resign, before simply switching to an autumn budget and spring statement. The spring statement will no longer be a major fiscal event but a response to economic forecasts produced twice a year by the OBR.Continue reading...