Philip Hammond has signalled that he is keen to revert to a more mundane autumn statement and keep his powder dry for an annual Budget; but this year he does need to do a little more as it is the first ‘set piece’ opportunity for the Theresa May government to show what their new approach means in practice.
I would expect to see a couple of big themes at autumn statement including:
Helping people who are “just managing”.
Demonstrating the UK is open for business and an attractive place do business.
Strengthening economic growth across the whole of the country and in a variety of sectors.
We probably won't see any substantial announcements on government Brexit negotiations but Brexit will cast a large shadow over the autumn statement as the overriding context.
On Spending: the Chancellor will signal a willingness to spend more, but not much just yet. He willdrop George Osborne’s plan to achieve a budget surplus by 2020, and replacing this with a plan to do so by 2025. He won’t be making full use of this new flexibility; but rather keeping it in his back pocket for the future.
On Tax. I wouldn’t expect to see big changes. Philip Hammond has already indicated he will stick to previous plans to reduce corporation tax to 17% by 2020 – but no further or faster reductions. He is more likely to look at income tax or employee NICs for low and middle income families. He may also propose some tax changes to support industrial strategy – for example to incentivise exporting, or infrastructure investment.
Turning to policy announcements, there are a number of areas where we can expect to see some flesh put on the bones of Theresa May’s new policy direction:
Housing A White paper on housing will be published at same time as autumn statement. This is expected to include a new pre-fab building programme and possibly to ‘rent to buy’.
Infrastructure: This is where any new spending is most likely to go. It may be focused on smaller, shovel ready local projects – e.g. more local transport improvements.
The government will publish its new industrial strategy. This will look at regional priorities (fitting with devolution); ‘horizontal’ measures that support productivity and growth such as skills, exports and access to finance; and key industries.
Responsible businesses: The government will publish a green paper with proposals on corporate governance just before or after autumn statement. This is likely to seek views on proposals around workers on boards and binding shareholder votes on directors’ pay.
In summary, I don't think autumn statement will necessarily have many explosive surprises, but it will start to provide more detail on new government priorities.
Philip Hammond will deliver his first Autumn Statement on November 23. It will be the Chancellor's first opportunity to outline his priorities for taxes and spending in the wake of the Brexit vote.