Philip Hammond has said the Brexit vote underlined the “urgent” need to tackle the UK economy’s long-term weaknesses and pledged £800m of additional funding for the Scottish Government.
• Chancellor Philip Hammond said the Office for Budget Responsibility (OBR) has slashed the GDP growth forecast for 2017 from 2.2% to 1.4%, as well as forecasting growth of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021. The OBR’s view is that the EU referendum result means potential growth over the period is 2.4 percentage points lower.
• Mr Hammond confirmed he is abandoning predecessor George Osborne’s aim of achieving a budget surplus by 2019/20, saying he is committed to returning public finances to balance “as soon as practicable”.
• Public spending this year to be 40% of GDP - down from 45% in 2010. • Borrowing is forecast by the OBR to reach £68.2 billion this year then £59 billion in 2017/18, then £46.5 billion, £21.9 billion, £20.7 billion in subsequent years, reaching £17.2 billion in 2021/22.
• The £3.5 billion of efficiency savings announced at the Budget to be delivered in full.
• Corporation Tax cut as planned to 17%, which Mr Hammond said is “by far the lowest” of G20 nations.
• A £2.3 billion Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in high demand areas and £1.4 billion made available to deliver 40,000 additional affordable homes.
• Investment of more than £1 billion in digital infrastructure and 100% business rates relief on new fibre infrastructure to make UK “a world leader” in 5G.
• Income tax free personal allowance to rise to £12,500 and the higher rate threshold will increase to £50,000 by the end of the Parliament.
• The National Living Wage will rise from £7.20 to £7.50 in April 2017.
• Universal credit taper rate to be cut from 65% to 63% from April at a cost of £700 million.
• The Autumn Statement has been abolished and the main budget statement will move from the spring to the autumn.