Thursday, November 24, 2016

News: Autumn Statement 2016

By

Rothbiz editor, Tom Austen, looks through the Autumn Statement 2016.

I have to start with Wentworth Woodhouse - whether it was a dig at the "politcal vandalism" of a Labour Government of years gone by or not, the "rabbit out of the hat" and surprise announcement that "the big house" was to receive a Government grant of £7.6m to save its future had me cheering. It's not often a positive Rotherham story gets such national billing.

Back down to Earth and the statement from Philip Hammond, Chancellor of the Exchequer, contained the usual mix of economic statistics, fiscal predictions, missed debt targets, lame jokes and a smattering of new investments.

The Chancellor started by saying UK is the fastest growing major advanced economy in the world this year but that growth forecasts would be impacted by the uncertainty of the UK leaving the EU.

The Office for Budget Responsibility (OBR), which sets out an independent analysis of the economy, expects the economy to grow by 1.4% in 2017, down from the 2.2% it predicted before the referendum, while the forecast for growth in 2018 has been cut to 1.7% from 2.1%.

The focus of the Autumn Statement was set out early - productivity. Hammond called the UK's productivity gap "shocking" and set out that the Government will maintain its commitment to fiscal discipline while recognising the need for investment to drive productivity. If the UK raised its productivity by one percentage point every year, within a decade it would add £240 billion to the size of the economy.

The Government is to target innovation, R&D and infrastructure to close the productivity gap. Branded as the National Productivity Investment Fund, £23 billion will be used to target four areas that are considered critical for improving productivity: housing, transport, digital communications, and research and development (R&D).

Advertisement

Announced before the Autumn Statement, A £2 billion fund to back industrial research and development will include the Industrial Strategy Challenge Fund to support collaborations between business and the UK's science base. A review of current R&D tax incentives is also planned.

Prof Keith Ridgway, CBE, Executive Dean of the University of Sheffield Advanced Manufacturing Research Centre (AMRC) with Boeing, said: "The new Industrial Strategy Challenge Fund will give further impetus to the benefits UK companies can reap from developing and introducing new techniques and technologies.

"We are working across the supply chain and with small, innovative companies in the aerospace, automotive and medical sectors, amongst others and we are seeing the successes they can achieve.

"Industry cannot hold back in challenging times. I know uncertainty discourages investment, but those that don't invest in developing technology and skills are certain to fail."

George Osborne's Northern Powerhouse idea lives on with the Government publishing a new strategy to raise productivity across the North - if not announcing much new money for the regions. A strategy for Northern Powerhouse transport is also on its way.

The chancellor also referenced the already approved £400m Northern Powerhouse Investment Fund which is set to begin support businesses early next year.

Route development work on Northern Powerhouse Rail (HS3) linking the North's cities continues with transport body, Transport for the North to consider the options over the coming months, and announce the next steps in 2017. Sheffield and the city region will be hopeful it is not left off the map.

One local transport project getting the green light is the £75m+ "Sheffield Mass Transit Scheme" that has been successful in bidding for business case development funding within the Local Majors Fund. In addition to renewing the current Supertram system, there is potential for new routes.

Further schemes could also come via the Sheffield City Region local enterprise partnership (LEP) that is set to learn its allocation from the Local Growth Fund soon (it bid for £156m) and, if it becomes a mayoral combined authority as proposed, it will gain powers to borrow for their new functions, which will allow them to invest in economically productive infrastructure.

Across the country, businesses will welcome the fact that Corporation Tax will fall to 17% - the lowest rate of overall corporate tax in the G20. The previously mentioned changes to business rates should also reduce the burden, especially in this area. Rural rate relief is set to double to 100% from next year.

The Chancellor also discussed the tax free personal allowance that will rise to £12,500 and then rise in line with inflation from 2020. In addition, the National Living Wage will rise from £7.20 to £7.50 in April 2017.

Other headline grabbing announcements include the £50m of new capital funding to support the expansion of existing grammar schools in each year from 2017-18, the fact that the forecasts show that Government finances will be £122bn worse off than previously expected by 2020, spending to accelerate new housing supply - some £3.7bn, £1 billion to invest in full-fibre broadband and trialling 5G networks, and the announcement that the Budget and Autumn Statement will swap with the main budget to be announced at this time of year and an update instead given in Spring.

Images: HM Treasury


0 comments:

Sponsored by:
Members:
Supported by:
More news...

  © Blogger template Newspaper III by Ourblogtemplates.com 2008

Back to TOP