Philip Hammond is set to deliver his first Autumn Statement as Chancellor on Wednesday 23rd November. Unlike his predecessor George Osborne, Mr Hammond’s economic strategy will be devised and implemented amongst a backdrop of Post-Brexit uncertainty.
Below we look at four things to expect from the Chancellor’s Autumn Statement.
The British Chamber of Commerce (BCC) has called for the Chancellor to include a raft of measures to support companies in the wake of the referendum.
Included in the multimillion pound measures the BCC are calling for is a reform of business rates and help for smaller companies. Many have cited this Autumn Statement as a time for Government to set the tone for its relationship with British businesses and to boost confidence.
Post- Brexit this is one of the biggest economic issues. Apparently Mr Hammond has said he is ready to accept that Britain may have to give up membership of the single market if we are to achieve the immigration restrictions the leave vote signifies. The Chancellor apparently considers it unrealistic to expect membership of the single market once Britain leaves the EU and officials have said that “Treasury staff are drawing up their own blueprint which they hope will allow Britain’s financial services firms to retain similar levels of access to Europe”. The Chancellor clearly believes London is a key financial centre (one which many European companies use to raise capital) and too valuable for the EU to jeopardise. In the House of Commons recently the Chancellor explained he is working to ensure the best deal for companies “including our world leading financial services industry.”
While single market membership continues to be a hot topic one thing for certain is that companies will be looking at this Autumn Statement for assurances that Mr Hammond is supporting British business growth during this turbulent time.
The Chancellor has said that unlike George Osborne he has no plans to cut corporation tax to 15 per cent as a way to boost the Post-Brexit economy. Prior to the referendum vote Mr Osborne had said that he would cut corporation tax to encourage businesses to continue investing in the UK.
At a recent meeting of the European Finance Ministers Mr Hammond made it clear that he will be sticking to the plan to cut the rate of corporation tax to 17 per cent by April 2020. This is however, still much lower than the EU average of around 24%.
While Mr Hammond has ruled out a “splurge” in public spending we do expect there to be a break from the much loved austerity of his predecessor George Osborne. It is likely that Mr Hammond will announce plans to invest in infrastructure (taking advantage of low borrowing costs) but will stress (as he recently explained in Washington) that he wants to support “the economy in a measured and balanced way.”
It’s expected that spending will be announced on road and rail improvements which in his view are “targeted high-value investment in our economic infrastructure.”
While speculation around the Autumn Statement will continue, Mr Hammond would be wise to listen to British Businesses and on November 23rd unveil measures which will help to install Post-Brexit confidence.
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Photo courtesy of © AFP, Financial Times