Autumn Statement 2016 summary

Autumn Statement 2016 summary: Key points at-a-glance

  • 23 November 2016

Philip Hammond has delivered his first Autumn Statement as chancellor. These are the key points.

Public borrowing/deficit/spending

  • Government finances forecast to be £122bn worse off in the period until 2021 than forecast in March’s Budget
  • Debt will rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18
  • Office for Budget Responsibility (OBR) forecasts borrowing of £68.2bn this year, then £59bn in 2017-18, £46.5bn in 2018-19, £21.9bn in 2019-20 and £20.7bn in 2020-21
  • Public spending this year to be 40% of GDP – down from 45% in 2010
  • Departmental spending plans set out in 2015 Spending Review to remain in place
  • Government will meet commitments to protect budgets for key public services, defence, overseas aid and the pension “triple lock” until the end of this Parliament

The state of the economy

  • OBR growth forecast upgraded to 2.1% in 2016 – from 2.0% – then downgraded to 1.4% in 2017, from 2.2%
  • Forecast growth of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021.
  • Government no longer seeking a budget surplus in 2019-20 – committed to returning public finances to balance “as soon as practicable”

Taxation/pay

  • Income tax threshold to be raised to £11,500 in April, from £11,000 now
  • Higher rate income tax threshold to rise to £50,000 by the end of the Parliament
  • Tax savings on salary sacrifice and benefits in kind to be stopped, with exceptions for ultra-low emission cars, pensions, childcare and cycling
  • National Living Wage to rise from £7.20 an hour to £7.50 from April next year
  • Employee and employer National Insurance thresholds to be equalised at £157 per week from April 2017
  • Insurance premium tax to rise from 10% to 12% next June

Welfare

  • Universal Credit taper rate to be cut from 65% to 63% from April at a cost of £700m
  • No plans for further welfare savings in this Parliament

Housing

  • Ban on upfront fees charged by letting agents in England “as soon as possible”
  • £2.3bn housing infrastructure fund to help provide 100,000 new homes in high-demand areas
  • £1.4bn to deliver 40,000 extra affordable homes

Fuel

Transport/infrastructure/regions

  • £1.1bn extra investment in English local transport networks
  • £220m to reduce traffic pinch points
  • £23bn to be spent on innovation and infrastructure over five years
  • £2bn per year by 2020 for research and development funding
  • £110m for East West Rail and commitment to deliver Oxford to Cambridge Expressway
  • More than £1bn for digital infrastructure and 100% business rates relief on new fibre infrastructure
  • £1.8bn from Local Growth Fund to English regions
  • Rural Rate Relief to be increased to 100%, “giving small businesses a tax break worth up to £2,900″
  • £7.6m for repairs to Wentworth Woodhouse, near Rotherham, said to be inspiration for Pemberley in Jane Austen’s Pride and Prejudice

Business

  • Doubling UK Export Finance capacity
  • £400m into venture capital funds through the British Business Bank to unlock £1bn in finance for growing firms
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