23 November 2016
Autumn Statement: Philip Hammond vows to make Britain ‘match fit’
Mr Hammond, who said his goal was to get the economy "match fit" for the "new chapter" ahead, unveiled a series of plans aimed at boosting productivity and helping low-income workers.
He said: "This Autumn Statement responds to the challenge of building on that strength, while also heeding the warnings in the OBR's figures, as we begin writing this new chapter in our country's history.
"It sends a clear message to the world that Britain is open for business and it provides help to those who need it now."
The Office for Budget Responsibility's (OBR) view is that the EU referendum result means potential growth over the period is 2.4% lower.
The main announcements in today's mini-budget include:
- Corporation Tax cut as planned to 17%, which Mr Hammond said is "by far the lowest" of G20 nations.
- Salary sacrifice benefits like phone and gym contracts, or buying cars will be curbed, but work benefits like pension saving childcare and bicycles will stay
- Investment of more than £1 billion in digital infrastructure and 100% business rates relief on new fibre infrastructure to make UK "a world leader" in 5G.
- The National Living Wage will rise from £7.20 to £7.50 in April 2017.
- Income tax free personal allowance to rise to £12,500 and the higher rate threshold will increase to £50,000 by the end of the Parliament.
- A £2.3 billion Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in high demand areas and £1.4 billion made available to deliver 40,000 additional affordable homes.
- Mr Hammond confirmed he is abandoning predecessor George Osborne's aim of achieving a budget surplus by 2019/20, saying he is committed to returning public finances to balance "as soon as practicable".
- Public spending this year to be 40% of GDP - down from 45% in 2010.
- Borrowing is forecast by the OBR to reach £68.2 billion this year then £59 billion in 2017/18, then £46.5 billion, £21.9 billion, £20.7 billion in subsequent years, reaching £17.2 billion in 2021/22.
- The £3.5 billion of efficiency savings announced at the Budget to be delivered in full.
- Universal credit taper rate to be cut from 65% to 63% from April at a cost of £700 million.
The Office for Budget Responsibility (OBR) has slashed the GDP growth forecast for 2017 from 2.2% to 1.4%, as well as forecasting growth of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021.
The Chancellor has also announced that the Autumn Statement has been abolished and the main budget statement will move from the spring to the autumn.