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In his first Autumn Statement, the Chancellor, Philip Hammond, prioritised investment in infrastructure and innovation to raise Britain’s productivity. Highlighting the “urgent” weaknesses of the UK economy: the productivity gap; the housing challenge; and the “damaging imbalance” in economic growth and prosperity across the country, he set out the measures to prepare the country to seize the opportunities ahead, to get the economy “match-fit” for leaving the EU and to build an economy that works for everyone.

In 2017, the UK’s economic growth will slow to 1.4 per cent in the face of inflation and uncertainty, according to the Office for Budget Responsibility’s new forecast, increasing to 2.0 per cent by 2021, 2.4 percentage points lower than would have been expected with a different referendum result.

The Budget notes that annual central government investment in economic infrastructure will rise to £22 billion in 2020-21 (paragraph 3.14). Among the support for infrastructure projects announced were £27 million development funding for the Oxford-Milton Keynes-Cambridge Expressway and £110 million to accelerate the construction of East West Rail (paragraph 3.16), both projects including Aylesbury Vale and contributing to creating a “transformational tech-corridor”.

Highlights included:

The launch of a £23 billion National Productivity Investment Fund (NPIF) focusing on housing, transport, digital connectivity and research and development, the only uncosted part of the Statement. It includes:

• A £2.3 billion Housing Infrastructure Fund allocated to local government on a competitive basis. This will provide infrastructure targeted at unlocking new private house building in the areas where housing need is greatest (paragraph 3.11), described as areas where housing is “least affordable” in the Chancellor’s speech, while London will receive £3.15 billion to deliver more than 90,000 homes
• A £740m NPIF contribution to support the market to roll out full-fibre connections and future 5G communications, including a £400m Digital Infrastructure Fund (paragraph 3.20) to be matched by private investment to deploy “full-fibre access to millions of premises” by 2020
• £4.7 billion investment in science and innovation, including an Industrial Strategy Challenge Fund to support collaborations between business and the UK’s science base, which will set identifiable challenges for UK researchers to tackle
• £2.6 billion to tackle congestion to “ensure the UK’s transport networks are fit for the future”, including £1.1 billion to relieve congestion and upgrade local roads and public transport networks. On strategic roads, an extra £220 million will be invested to tackle key pinch-points.

Further measures announced:

• An extension to Rural Business Rate Relief and 100% business rates relief for new full-fibre infrastructure for five years from April 2017 (paragraph 3.20)
• As announced in the Budget, Corporation Tax will fall to 17 per cent by 2020 (paragraph 4.23), with loss relief and bringing non-resident companies’ UK income into the corporation tax regime set to be reviewed (paragraphs 4.25 and 4.26)
• Additional support through UK Export Finance will “ensure no viable UK export should fail for lack of finance or insurance from the private sector" (paragraph 3.33)
• £1.8 billion will be made available to Local Enterprise Partnerships (LEPs), including £392 million to be made available to LEPs in London and the South East, with awards to individual LEPs being announced “in the coming months” (paragraph 3.49)
• The National Living Wage will rise to £7.50 from April 2017 (paragraph 3.46), more than the current hourly rate of more than 19,000 employees working in Buckinghamshire - 10 per cent of Buckinghamshire’s employees, rising to 20 per cent of part-time workers. All other rates of National Living Wage will increase, including a rise from £3.40 to £3.50 for apprentices (paragraph 3.47), while HMRC will receive additional resources for National Living Wage enforcement (paragraph 3.48).
• The increases to personal allowances and the higher rate tax announced in the Budget were confirmed, rising to £12,500 and £50,000 respectively by the end of the Parliament (paragraph 4.5)
• The government will provide £13 million to support firms’ plans to improve their management
• The Government will set out its 5G Strategy in March’s spring Budget (paragraph 3.20)
• To address the gap between levels of productivity across the UK, the Government has published a strategy for the Northern Powerhouse with a similar document for the Midlands Engine to follow (paragraph 3.51), with Investments Funds of £95 million and £130 million respectively made available to support local SMEs (paragraphs 1.63 and 3.52) in the Northern Powerhouse and Midlands Engine
• The Infrastructure and Projects Authority will publish a review over the summer on how the government, working with business, can “improve the quality, cost and performance of UK infrastructure”
• The government will ban letting agents’ fees to tenants (paragraph 3.41) “as soon as possible”, the Chancellor stating “landlords appoint letting agents and landlords should meet their fees
• Up to £51 million will be made available to the Department Exiting the European Union to support “the re-negotiation of the UK’s relationship” with the EU (paragraph 3.34)

The Chancellor’s speech can be found here:

https://www.gov.uk/government/speeches/autumn-statement-2016-philip-hammonds-speech

The Autumn Statement and associated documents can be found here:

https://www.gov.uk/government/publications/autumn-statement-2016-documents