Hammond gives vital clues on Autumn Statement 2016
Philip Hammond said he would use his statement on November 23rd to deliver “long-term fiscal sustainability, while responding to the consequences of short-term uncertainty.”
That means “recognising the need for investment” so Britain can have “an economy that works for everyone” -- a goal Mr Hammond stated or referred to half a dozen times.
Speaking to the Tory party conference, he also revealed his desire to back “new, disruptive technologies,” such as the IoT and AI, to boost UK productivity -- a second aim he committed himself to.
Another measure to help productivity but also to “cement” Britain’s “role as a leader in tech innovation,” which seems to be the chancellor’s third big priority, is for visas to continue being IT sector-friendly.
In fact, Mr Hammond said he wanted to “maintain” Britain’s “ability to attract the brightest and best to work here in our high-tech industries” -- a pledge that staffing body REC has been lobbying for.
How the chancellor will achieve this did not get spelt out in his conference speech yesterday, which also neglected to feature tax, except for a mention of corporation tax heading for 17%.
“The biggest area missing from this speech was tax,” says James Sproule, chief economist at the Institute of Directors (IoD).
“At the Autumn Statement we hope the chancellor will take bold steps to simplify the tax system for small and medium-sized companies, and give all business some clear guidance on what is, and what is not, tax avoidance.”
Despite the omission, tax (or tax reliefs) would likely play a part in achieving another of Mr Hammond’s objectives; seeing “what is invented here, developed here” and “what is developed here, produced here.”
Tax was taken up later in the conference day by David Gauke, chief secretary to the Treasury, whose survival in the recent reshuffle is regarded by an umbrella company boss as ominous for the payroll sector.
Previewing new economic performance data, Mr Gauke said it was likely to show lower tax receipts but rather than “chasing after that loss,” such as with tax rises, he said the government’s response would be “pragmatic”.
Pragmatism featured in Mr Hammond’s speech too, with the first of the two mentions being the most notable, because the chancellor used it to partition himself off from his predecessor.
“We will do it [restore fiscal discipline] in a pragmatic way that reflects the new circumstances we face. The fiscal policies that George Osborne set out were the right ones for that time. But when times change, we must change with them,” he said.
Underlining this desire to break from the past, and hinting about what Autumn Statement might contain, Mr Hammond said he had “a new plan for the new circumstances Britain faces.”
Moving to reassure them, he promised “the best possible access to European markets” for the suppliers of services, and “the best possible freedoms for our entrepreneurs”.
“We are ready to provide support to British businesses as they adjust to life outside the EU,” Mr Hammond added. “We’ve already guaranteed the funding for projects signed prior to this year’s Autumn Statement.
“Today, I can go further. The Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria that if they secure multi-year EU funding before we exit, we will guarantee those payments after Britain has left the EU.”
The former company director also announced a £220million package of support to tech innovation; £100m to extend the biomedical catalyst fund and £120m to nurture the tech transfer offices that put universities and entrepreneurs together.
“The chancellor hit the right notes today, talking of…investing in technology and innovation,” said the IoD, speaking after Mr Hammond’s speech. “But soon, businesses will need to see this positive mood music turn into something more concrete.
"[He] has between now and the Autumn Statement in November to develop an economic plan that boosts confidence and sees business through the uncertainty of the Brexit negotiations."