The message from Number 11 is that this is a time to steady the ship and not rock the boat, writes Ally Vivona of PPS Group.
As predicted there were no ‘big name’ spending announcements included in Philip Hammond’s inaugural address as Chancellor of the Exchequer. There was however the surprise ‘rabbit in the hat’ with the news that the Autumn Statement is to be abolished and next year there will be an Autumn Budget followed by a Spring Statement in 2018.
Hammond, known for years as ‘the accountant’, committed to more than £1.3bn spending on improving Britain’s roads and £1bn investment in welfare. Importantly for the North West, he also renewed his commitment to the Northern Powerhouse by awarding £556m to local enterprise partnerships across the North of England as well as a new £23bn national productivity investment fund.
He announced that an extra £1.4bn will be spent on delivering 40,000 affordable homes and a ban on lettings agents fees, which caused estate agents Foxtons’ stock to plummet this morning.
These policies are a firm indication that the government will continue to move away from George Osborne’s austerity measures. Hammond has today made pledges to help ‘JAMS’, or those who are ‘just about managing’, and not the ‘squeezed middle’ that were focused on previously. This was backed up with the announcement that the National Living Wage will rise from £7.20 an hour to £7.50 from April 2017 and that there will be a freeze on fuel duty.
Despite the economic policy change, Osborne rather graciously tweeted his best wishes to Hammond this morning:
Very best wishes to my friend @PHammondMP as he delivers his first Autumn Statement today & helps UK prepare for challenges ahead
— George Osborne (@George_Osborne) November 23, 2016
Today’s statement also firmly addressed the Brexit issue in a bid to silence recent criticism that Number 10 and Number 11 have not outlined a strategy and cost analysis for leaving the European Union. In many ways the best thing the Chancellor could do is provide a budget which says ‘nothing’ in order to calm the business world’s post-Brexit fears.
Amidst the ongoing political drama following Brexit, we expect Hammond to provide the perfect stoic counterpoint.
Ally Vivona is a consultant at PPS Group