Hammond promises resilient economy in Autumn Statement

The Autumn Statement saw Chancellor Philip Hammond vow to make the UK economy ‘resilient’, despite its decision to leave the EU and has forecasted a higher borrowing and slower growth.

In his first major Commons event as Chancellor, Hammond said borrowing would hit £68.2 billion this year and £59 billion next year compared with the March forecast of £55.5 billion and £38.8 billion.

In his speech, Hammond made a number of announcements, covering fuel duty, housing, pay, technology and transport.

Fuel duty is to remain frozen for a seventh year, despite previous proposals to increase the tax. Furthermore, £390 million is to be invested in future transport technology, including driverless cars, renewable fuels and energy efficient transport. This will include: £100 million investment in testing infrastructure for driverless cars; £150 million to provide at least 550 new electric and hydrogen buses, reduce the emissions of 1,500 existing buses and support taxis to become zero emission; and £80 million to install more charging points for ultra-low emission vehicles.

Furthermore, there will be a major investment in transport infrastructure, as part of the National Productivity Investment Fund: £1.1 billion to reduce congestion and upgrade local roads and public transport; £220 million to tackle road safety and congestion on Highways England roads; and £27 million to develop an expressway connecting Oxford and Cambridge.

There will also be a two-year 100 per cent first year allowance for companies who install electric charge-points, coming in from today‎. This allows companies to deduct the cost of the charge-point from their pre-tax profits in that year‎.

Hammond also announced that there will be £2 billion more per year in research and development funding by 2020-2 for universities and businesses with R&D projects to help the UK remain an attractive place for businesses to invest in innovative research. The funding will support scientific research and development of technologies such as robotics, artificial intelligence and industrial biotechnology.
£450 million will also be spent on trialling railway digital signalling technology which will expand capacity and improve reliability.

Regarding housing, Hammond declared that there will be a ban on letting agents charging fees to renters. This means letting agents will no longer be able to charge renters fees, when they sign a new tenancy agreement and will stop tenants being hit with fees averaging £223 per tenancy.

Whilst the the Association of Residential Letting Agents (Arla) criticised the measure as ‘draconian’, Campbell Robb, Shelter's chief executive, welcomed the announcement: "Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we are delighted with the government's decision to ban them. We have long been campaigning on this issue and it is great to see that the government has taken note.”

In addition, £2.3 billion will be available for a new Housing Infrastructure Fund, which will be used for projects such as roads and water connections that will support the construction of up to 100,000 new homes in the areas where they are needed most. A further £1.4 billion will be used to provide 40,000 new affordable homes, including some for shared ownership and some for affordable rent. And another £1.7 billion will be used to speed up the construction of new homes on public sector land.

Commenting on the announced investment in housing projects, David Orr, chief executive of the National Housing Federation (NHF), said: “Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, more quickly, across the country.”

Hammond also confirmed that the National Living Wage (NLW) for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour. That means over £1,400 a year more for a full-time worker previously on the National Minimum Wage. The Personal Allowance is also set to rise from £11,000 to £11,500.

For 21 to 24 year olds the NLW will rise from £6.95 per hour to £7.05; for 18 to 20 year olds – from £5.55 per hour to £5.60; for 16 to 17 year olds – from £4.00 per hour to £4.05; for apprentices – from £3.40 per hour to £3.50. £4.3 million will be spent on helping small businesses to understand the rules and cracking down on employers who are breaking the law by not paying the minimum wage.

The Statement also saw the announcement of a £1 billion investment in full-fibre broadband and trialling 5G networks. The funding will support the private sector to roll out more full-fibre broadband by 2020-21. Funding will also support trials of 5G mobile communications.

Meanwhile, more than £10 million was announced to support culture and heritage projects across the UK. £7.6 million will cover urgent and essential repairs to the heritage house, Wentworth Woodhouse in South Yorkshire; £850,000 for a Royal Society of the Arts pilot to promote cultural education in schools; £1.6 million to help complete Studio 144, an arts complex in Southampton, including an auditorium, studio, and gallery; and £1 million towards the development of a new creative media centre in Plymouth.