In delivering the Autumn statement, Chancellor Phillip Hammond has released some eye-catching statements on the state of public finances and growth forecasts as well as several flagship policies and plans. But what does that mean for individuals and organisations? Our expert panel explore some of the key points.
- £1.8bn from Local Growth Fund to English regions
- Doubling UK export funding capacity
Coupled with commitments to widespread infrastructure developments, a new regional development fund could, in spite of some hesitancy from the Chancellor, play a key role in opening up the ‘Northern Powerhouse’ which was so heavily associated with his predecessor, offering a real opportunity for the already buoyant economies of cities such as Leeds and Manchester.
Looking beyond the UK, the doubling of UK export funding capacity is also worth noting and the difference this could make to businesses looking to invest overseas, or indeed attract inward investment, shouldn’t be underestimated.
The Digital Economy
- £400m into venture capital funds to unlock £1bn in finance for growing technology firms
- More than £1bn for digital infrastructure
- 100% business rates relief on new fibre infrastructure
Setting out a policy of “investing today for the economy of the future” the Chancellor has committed to the development of a vibrant UK digital economy through a raft of infrastructure pledges which seek to make the K a leader in 5G technology.
Benefits too are available for tech’ companies looking to grow and, more importantly, stay in the UK. In seeking to unlock £1bn worth of investment for digital entrepreneurs, Philip Hammond hopes to give the employment and talent markets a genuine and sustainable boost.
The Property Market
- £2.3bn housing infrastructure fund to provide 100,000 new homes in high-demand areas
- £1.4bn to deliver an extra 40,000 extra affordable homes
- Ban on the upfront fees charged by letting agents in England
The Chancellor has announced two headline grabbing funds designed to encourage home building in areas of high demand and for those seeking affordable housing. Both will leave developers feeling a little more optimistic about 2017, but whether the extra £1.1bn pledged to develop local transport networks will be enough to support the new builds, remains to be seen.
Meanwhile, the ban on upfront fees from letting agents to tenants comes as another piece of bad news for buy to let investors. After being hit by a 3% Stamp Duty Land Tax surcharge in April 2016, the measure is likely to increase costs for Landlords as letting agents transfer fees to the property owner.
HR and Employment
- National Living Wage set to rise from £7.20 an hour to £7.50 from April 2017
- Tax savings on salary sacrifice and benefits in kind to be stopped, with some exceptions
- Employee and employer National Insurance thresholds to be equalised at £157 per week
With amendments to the way National Insurance contributions are calculated and the tax status of some salary sacrifice schemes, the Chancellor has left HR departments with some recalculating work to do. The changes in salary sacrifice arrangements – offered in one form or another by an estimated 60% of UK employers – are particularly interesting, as while removing a tax loop hole will have an impact for a sizable number of wage for earners.
The 4% increase in the National Living Wage is a welcome increase – effectively a £600 a year pay rise for those who work a 38 hour week. It is, however, worth noting that the new £7.50 hourly rate still sits below the independently calculated living wage of £8.45 for workers outside London and £9.75 for those in the capital.