The Autumn Statement: what we know so far

Sarah Coles
Philip Hammond
Philip Hammond

Philip Hammond is following in the grand tradition of Autumn Statements, and announcing plenty of the content in the days before his big speech. So far we have had news on broadband and a ban on cold calling for pension investments plus hints on tax and spending. So what do we know so far?

See also: Hammond under pressure to help families

See also: Pension scam clampdown

See also: Chancellor warned of austerity danger

Already announced

Ban on pension cold calling
This was revealed at the end of last week. The concern is that pension freedoms have made pensioners even more attractive to scammers, who call offering a review of pension investments, and use the chance to switch pensioners into bogus investments and take their life savings.

The government has argued against a ban in the past - saying it would be difficult to enforce as so many of the scammers are based overseas and would be free to keep calling. However, it has now changed its tune.

The ban will mean that all pensioners know that anyone calling them offering them a pension investment is breaking the law on cold calling, and should be avoided. This in itself provides protection for pensioners, and so Hammond has said he will bring in a ban - announcing details in his Autumn Statement.

We are expecting Hammond to use the opportunity to formally extend the deadline for balancing the books - so he doesn't need to make more enormous cuts in order to hit an arbitrary deadline.

However, we can't assume this means more borrowing and spending. The Institute for Fiscal Studies has already pointed out a huge black hole in government finances because of slower growth and higher inflation - so he'll be keen to keep a lid on spending. This is something Hammond himself has spent the last few days emphasising in the media - describing the need for a 'watertight' economy - so we can expect another tight budget.

Hammond announced a £400 million fund to bring ultra-fast broadband to homes in the UK. At the moment, super fast broadband is delivered to cabinets on British streets, and then from there it is taken to the surrounding houses by copper wire - which slows the whole thing down. Hammond is announcing plans to take the cable all the way to 2 million homes.

On the face of it, this is good news, but as has pointed out, it really depends on which 2 million homes get it. Will it be the millions struggling on super slow speeds at the moment, or will it be the urban areas with an economic incentive and new builds where delivery is easy?

Corporation Tax
Yesterday Theresa May's speech to the Confederation of British Industry gave a strong hint that low corporation tax is a priority for the government - in an effort to keep companies within the UK despite Brexit. She said: "My aim is not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation." Given Donald Trump's promises to cut corporate taxes in the US, we could see taxes fall further if the two get into tax-cut-tit-for-tat.

Research and development
May brought this up yesterday too - as part of her plan to get businesses investing in the UK. She announced there would be a £2 billion investment in R&D by the end of this Parliament, so we can expect Hammond to bring this up in his speech.

Hammond has been keen to point out a need to invest in roads and railways, and to boost growth through more spending on infrastructure projects. So far we have had an announcement that the speech will include £1.1 billion to reduce congestion and upgrade local roads, as well as £220m to tackle 'pinch-points' and a £27 million new express way north of London.

The predictions - not announced but expected in some quarters

Policies for the 'just-about managing'
May has reportedly been keen to maintain more control over announcements than her predecessor, and we know she wants to be seen to take steps to help those on lower incomes who are struggling to make ends meet. We don't, however, know what this will look like - although a freeze in fuel duty, and childcare assistance have been touted as possibilities.

There have been calls to soften cuts to the Universal Credit work allowances, and delay a £30-a-week cut to disability benefits due in April 2017, but so far Hammond hasn't made his views known.

Salary sacrifice
A number of workplace schemes let people give up a chunk of their salary in return for some workplace benefits - which can be offered tax-efficiently (ranging from company mobile phones to health screenings). The taxman has been consulting on this since the summer, so we could see a clampdown on certain types of salary sacrifice (although pension schemes are unlikely to be included in the changes).

Income tax
The timetable for increasing the tax-free personal allowance was set out in the Conservative manifesto, and everything emerging from Westminster would seem to indicate Hammond intends to stick with the promise to increase it to £12,500 and raise the higher rate tax threshold from £43,000 to £50,000. However, he may not refer to the cuts for Britain's highest earners as it's a long way off and may not sit well with a tight budget.

Attacks on rip offs
The government has been keen to position itself as a consumer champion, so could use this as an opportunity to clampdown on energy and phone companies. This may mean a change to information on bills, a move to make switching easier, or even a cap on costs.

There's a chance there will be money set aside for new Grammar Schools - although this is a controversial one, and may come down to whether May's enthusiasm for the project trumps the concerns of her cabinet colleagues.

House building
Given his reported keenness on housebuilding, there may be measures to make building houses easier. and penalties for those who hoard land.

Delay in digital tax rollout
There has been an enormous amount of talk about pushing back the deadline for making tax digital - as the scale of the challenge becomes clear and 2020 starts to look a bit ambitious.

Outside chances

There have been lots of calls to cut VAT from 2% to 17.5%, but the overall consensus is that Hammond will hold off until the Budget in March.

Soften buy-to-let changes
Hammond has the chance to ditch plans to end the tax relief on mortgage costs for people buying to let - which would make an enormous difference to those who have invested in a second property. A similar policy has been dropped in Ireland, so there is a precedent. However, he may not be keen to lose the potential tax revenue.

The 7 day account switching guarantee currently only applies to Current Accounts, and Tom McPhail, head of retirement policy at Hargreaves Lansdown has pointed out that it would be an easy win for the government and a popular move (and cost-free as far as the Treasury is concerned) to extend this guarantee to savings accounts too.

Lifetime ISAs
The experts are divided on whether Hammond will axe the proposed Lifetime ISA. Many would like to see the ISA offerings consolidated, but others point out it would be very difficult to backtrack from something sold as promoting intergenerational fairness.

Tax relief on pensions
A major change has been on the cards for months, but few expect Hammond to do anything before the Budget.