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In at Number Eleven - The Hammond Song

23 November 2016 | Updated 01 January 1970
 

Hammond pointed to the IMF prediction that the UK will be the fastest growing major advanced economy in the world this year. An economy with employment at a record high – and unemployment at an 11 year low. He did not mention the fact that borrowing will rise to 90 per cent of GDP. He complimented the global reach of the UK's services industries and the strength of our science and high-tech manufacturing base. he also mentioned the productivity gap; the housing challenge; and the imbalance in economic growth and prosperity across the country.

Here, ThisWeekinFM extracts some of the more important statements in edited highlights.

 

Office for Budget Responsibility

Today’s OBR forecast is for growth to be 2.1% in 2016; higher than forecast in March. In 2017 the OBR forecasts growth to slow to 1.4%, which they attribute to lower investment and weaker consumer demand, driven, respectively, by greater uncertainty and by higher inflation resulting from sterling depreciation.

 

Surplus

In view of the uncertainty facing the economy, and in the face of slower growth forecasts, we no longer seek to deliver a surplus in 2019-20.

 

Welfare

And I confirm again that the government has no plans to introduce further welfare savings measures in this parliament beyond those already announced.

 

Borrowing

£68.2 billion this year; falling to £59 billion next year; £46.5 billion in 2018-19; then £21.9 billion; £20.7 billion, and finally £17.2 billion in 2021-22.

The OBR’s forecast of higher borrowing and slower asset sales, together with the temporary effect of the Bank of England’s action to stimulate growth, translates into an increased forecast for debt in the near-term.

 

Productivity

We lag the US and Germany by some 30 percentage points. But we also lag France by over 20 and Italy by 8. Which means in the real world, it takes a German worker 4 days to produce what we make in 5; which means, in turn, that too many British workers work longer hours for lower pay than their counterparts. Raising productivity is essential for the high-wage, high-skill economy that will deliver higher living standards for working people.

I can announce today a new National Productivity Investment Fund of £23 billion to be spent on innovation and infrastructure over the next five years.

 

Housing

With a new £2.3 billion Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in areas of high demand. And, to provide affordable housing that supports a wide range of need, we will invest a further £1.4 billion to deliver 40,000 additional affordable homes. And we will relax restrictions on government grant to allow a wider range of housing-types. I can also announce a large-scale regional pilot of Right to Buy for Housing Association tenants. And continued support for home ownership through the Help to Buy: Equity Loan scheme and the Help to Buy ISA.

 

 

Infrastructure

I will commit an additional £1.1 billion of investment in English local transport networks; £220 million to address traffic pinch points on strategic roads; £450 million to trial digital signalling on our railways to achieve a step-change in reliability. The Department for Transport will continue to work with Transport for the North to develop detailed options for Northern Powerhouse Rail.

 

Low emission vehicles

£390 million to build on our competitive advantage in low emission vehicles and the development of connected autonomous vehicles; plus a 100% first year capital allowance for the installation of electric vehicle charging infrastructure.

 

 

5G

We will invest over £1 billion in our digital infrastructure to catalyse private investment in fibre networks and to support 5G trials. And from April we will introduce 100% business rates relief for a 5 year period on new fibre infrastructure, supporting further roll out of fibre to homes and businesses.

 

Oxford-Cambridge growth corridor

With £110m of funding for East West Rail, and a commitment to deliver the new Oxford to Cambridge Expressway. But this project can be more than just a transport link. It can become a transformational tech-corridor, drawing on the world-class research strengths of our two best-known universities.

 

 

Export

I am doubling UK Export Finance capacity to make it easier for British businesses to export.

 

Skills & Tech

I am funding Charlie Mayfield’s business-led initiative to boost management skills across British businesses; and I am taking a first step to tackle the longstanding problem of our fastest growing technology firms being snapped up by bigger companies, rather than growing to scale. By injecting an additional £400m into venture capital funds through the British Business Bank, unlocking £1 billion of new finance for growing firms.

 

Getting out of London

This government recognises that for too long, economic growth in our country has been too concentrated in London and the south east. That’s not just a social problem, it’s an economic problem. London is one of the highest-productivity cities in the world and we should celebrate that fact. But no other major developed economy has such a gap between the productivity of its capital city and its 2nd and 3rd cities. So we must drive up the performance of our regional cities. Today we publish our strategy for addressing productivity barriers in the Northern Powerhouse; and give the go ahead today to a programme of major roads schemes in the north. Our Midlands Engine strategy will follow shortly, but I am today providing funding for the evaluation study for the Midlands Rail hub.

 

Cities

Devolution remains at the heart of this government’s approach to supporting local growth, and we recommit today to our City deals with Swansea, Edinburgh, North Wales and Tay Cities – and I can announce today we’re beginning negotiations on a city deal for Stirling. So that every city in Scotland will be on course to have a City Deal.

 

London

I can announce today that London will receive £3.15 billion as its share of national affordable housing funding to deliver over 90,000 homes. And that we are devolving to London the adult education budget, and giving London greater control over the delivery of employment support services for the hardest to help.

 

Attracting overseas companies

Corporation tax will fall to 17%, by far the lowest overall rate of corporate tax in the G20. We will deliver the commitments we have made to the oil and gas sector; the Carbon Price Support will continue to be capped out to 2020; and we will implement the business rates reduction package worth £6.7 billion.

 

Transitional relief

I can confirm today that having consulted further, my Right Honourable Friend, the Communities Secretary will lower the transitional relief cap from 45% next year to 43%, and from 50% to 32% the year after.

 

National Insurance

From April 2017 we will align the employee and employer National Insurance thresholds at £157 per week. There will be no cost to employees, and the maximum cost to business will be an annual £7.18 per employee.

 

Benefits in kind

The majority of employees pay tax on a cash salary. But some are able to sacrifice salary and pay much lower tax on benefits in kind. This is unfair, and so from April 2017 employers and employees who use these schemes will pay the same taxes as everyone else. Following consultation with stakeholders, ultra-low emission cars, pensions saving, childcare and the cycle to work scheme will be excluded from this change. And certain long-term arrangements will be protected until April 2021.

 

Tax allowance

And I can confirm today that, despite the challenging fiscal forecasts, we will deliver on our commitment to raising the allowance to £12,500, and the higher rate threshold to £50,000, by the end of this Parliament. Once £12,500 has been reached, the personal allowance will rise automatically during the 2020s in line with inflation, rather than the National Minimum Wage as currently planned.

 

Living wage

As well as taking millions of ordinary people out of tax, the government introduced the National Living Wage and gave a pay rise to over a million workers. The government has also introduced 15 hours a week of free childcare for all 3 and 4 year olds, and we will double that for working families from September.

Today I can announce the National Living Wage will increase from £7.20 to £7.50 in April next year. That’s a pay rise worth over £500 a year to a full-time worker.

In early 2017, we will begin the roll out of tax-free childcare across Britain, providing a saving of up to £2,000 per child.

 

At the pump

The oil price has risen by over 60% since January; and sterling has declined by 15% against the dollar. So today we stand on the side of the millions of hardworking people in our country by cancelling the fuel duty rise for the seventh successive year.

Hammond' Autumn Swansong - he said that from now on there will be no autumn statement just an announcement of changes that will come into effect the following April

Article written by Brian Shillibeer | Published 23 November 2016

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