The Autumn Statement: What can we expect from Philip Hammond
As the new Chancellor prepares for his first Autumn Statement since succeeding George Osborne, what are managers anticipating for the year ahead?Matt Scott
The 2016 Autumn Statement will be Chancellor Philip Hammond’s first big test since taking over from his predecessor, George Osborne, who was replaced in Theresa May’s post-Brexit reshuffle.
And while the Autumn Statement will not be as weighty as what we have come to expect from the full Budget, this ‘Budget-lite’ is still expected to have a significant impact on managers across the country, especially in an anxious post-Brexit economic and political environment.
What is Hammond expected to say when he stands up in Parliament tomorrow afternoon?
A plan for Brexit, and a return to borrowing
As the first big budgetary announcement since the country voted to leave the European Union, the Autumn Statement will be Hammond’s first opportunity to lay out his plan for economic stability as the Brexit negotiations get under way.
One of the key announcements expected from the new Chancellor is a return to increased government borrowing. RBC estimates an £8bn increase for 2016/17 to a total of £63.5bn; Bank of America Merrill Lynch expects an additional £18bn of debt to be taken on by the government.
This will be a marked departure from Osborne’s pledge to balance the books by the end of this Parliament, a target that Hammond has already scrapped.
Hammond is also set to abandon another of his predecessor’s plans, and is not expected slash corporation tax to 15% from its current 20%, instead sticking to a plan to cut the rate of tax to 17% by April 2020.
Hammond is also expected to increase government spending on infrastructure by as much as £15bn, something Sky News has described as “an attempt to future-proof the economy from the turbulence of Brexit”. More conservative estimates have put the likely spend on roads, rail and other infrastructure projects at at closer to £5bn. A big spend on broadband upgrading is also anticipated, which will please many, especially in more remote communities.
The infrastructure splurge is expected to differ from Osborne’s previous plans for big ticket investments, with a variety of smaller, regional projects expected to be given priority under Hammond’s new plans.
What does this mean for the future?
While the full details of Hammond’s plans will not be revealed until tomorrow, the repercussions of the announcements will reverberate through the coming months and years.
So what are your reactions, hopes and fears for the next 12 months?
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