UK Autumn Statement 2016: what to expect

Chancellor Philip Hammond will deliver his first Autumn Statement later today. Here's everything we know so far

Philip Hammond, the Chancellor of the Exchequer, is set to deliver his first Autumn Statement speech later today. 

The Autumn Statement gives the Government the opportunity to outline what it has planned for Britain’s economy and public finances based on the latest forecasts from the Office for Budget Responsibility (OBR).

As usual, many of the big announcements have already been leaked to the media, so we have a good idea what to expect. 

Here we round up what's definitely going to be announced, and what might still happen.

Letting agents fees

It’s been confirmed this morning that the Chancellor will ban lettings agents from charging fees to tenants.

These fees are already banned in Scotland, but will no doubt be widely welcomed by tenants across the rest of the UK.

Data from charity Citizen’s Advice suggests such fees cost an average of £337 per person.

However, letting agents have suggested the move will not benefit tenants as rents will simply be hiked to compensate.

David Cox, the managing director of the Association of Residential Letting Agents, added that most agents do not profit from fees.

“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market,” he said

Pension cold calling

Hammond is also expected to announce a ban on pension cold calling.

New freedoms introduced last year which allows anyone aged 55 or over to cash in their pension has led to a surge in fraudsters trying to trick people into handing over their savings through dodgy investments.

A whopping £19 million was lost to pension fraud in 2015 and there were an estimated 250 million scam calls.

Under the changes, calls relating to pension investments where a firm has no relationship with an individual will be forbidden with fines of up to £500,000.

The Treasury will also consult on giving pension firms more powers to block suspicious transfers.

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State Pension

Pensions could well be one of the key talking points in this year's Autumn Statement. There are already growing calls for the Chancellor to scrap the State Pension triple lock.

This measure ensures the amount of State Pension people receive rises each year by the highest of inflation, earnings growth or 2.5%.

However, critics claim it's no longer needed or affordable. It's highly unlikely Hammond will make any changes in the short term, but he may well launch a review into the matter.

There is also speculation that he could make further reductions to the lifetime allowance or the amount people can pay into pensions each year.

Take a look at: Opinion: pensioners will be the next target for austerity.

Giveaways

It’s unlikely the Autumn Statement will contain any major giveaways, as the economy is facing a ‘sharp challenge’ following the UK's Brexit vote.

Speaking on the BBC One Andrew Marr Show the Chancellor said he recognised that ‘just about managing’ or so called 'JAM' families needed help but stressed he needed room in the public finances to deal with the impact of Brexit with forecasts predicting an economic slowdown and an ‘eye-wateringly large debt.’

However, planned promises set out by former Chancellor George Osborne like a raise in the Income Tax threshold for higher rate tax payers is likely to be announced as well as a freeze on fuel duty.

Philip Hammond will deliver his first Autumn Statement (Image: Shutterstock)

Faster broadband

Thousands of households being driven mad by slow broadband speeds could soon receive a much-needed boost in the form of a £400 million Digital Infrastructure Investment Fund.

The fund will be aimed at providers of fibre broadband, which offers far higher speeds, looking to expand their coverage.

In order to qualify for the funding they will have to match the amount they receive from the Government.

Tax-free employment perks

The Sunday Telegraph suggests there could be a raid on salary sacrifice schemes with the tax-free benefits on cars, health checks, gym memberships and mobile phone contracts targeted.

Tax experts reckon the perks are costing too much in lost Income Tax and National Insurance contributions.

Employers can benefit from salary sacrifice schemes as it lowers the amount they have to pay in National Insurance contributions meanwhile employees reduce their Income Tax bill.

However, pension contributions, childcare and cycle-to-work schemes are unlikely to be impacted by any of the changes.

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Infrastructure projects

The Treasury has said that Hammond will pledge £1.3 billion to improve UK’s road network.

The investment will include £1.1 billion for reducing congestion and upgrading local roads and a further £220 million for tackling traffic hotspots on England’s motorways and A-roads.

The Treasury claims road congestion costs the UK £13 billion every year and 100 million working days could be lost by 2040 if nothing is done about it.

Projects thought to already have been given the go ahead include a £27 million expressway connecting Oxford, Milton Keynes and Cambridge.

The pledge is part of a wider package of infrastructure investment worth around £5 billion to help shore up the UK’s economy in the wake of Brexit.

Hammond has said he believes productivity improvements like rail and road repairs had the best returns because they could be started quickly and have long-term benefits.

In a speech at the Conservative conference in Birmingham in October Hammond hinted that investment would be a major cornerstone of his strategy: “Our stock of public infrastructure – like our roads, railways and flood defences – languishes near the bottom of the developed-countries’ league table after decades of under-investment.

"And our businesses, too, are not investing enough. All of this must change to build an economy that works for everyone. We need to close that gap with careful, targeted public investment in high value infrastructure… and encouragement of more private investment in British businesses.”

Corporation and landlord taxes

Hammond has already indicated that he won't cut Corporation Tax to 15% to boost the economy following Brexit – as previous Chancellor, George Osborne had pledged.

Hammond has reportedly told European finance ministers that he is sticking to a previous plan to cut the rate to 17% by 2020.

It's also likely that he may reconsider the upcoming changes to landlord tax.

From April 2017 landlord tax relief for mortgage costs will be phased out. However, a similar tax policy has just been scrapped in Ireland, which could give the Chancellor room to reverse the restrictions before they come into force in Britain.

Housing

Hammond also admitted the housing shortage would be a challenge he will need to tackle.

He said that the Government would address this problem “using all the tools” at its disposal “because making housing more affordable will be a vital part of building a country that works for everyone.”

Hammond, along with Communities Secretary Sajid Javid, have already announced a £3 billion Home Building Fund to help smaller firms build 25,000 new homes by 2020 and up to 225,000 in the longer term.

A separate £2 billion loan will pay for 15,000 new homes by 2020 on surplus public sector land.

However, loveMONEY contributor Felicity Hannah isn’t convinced this will be enough, as she wrote about here: Why the Government’s new housebuilding plan still falls short.

We’ll update this piece with more rumours and predictions as they become available.

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