All eyes were on Chancellor Hammond at the end of November as he delivered his first major speech to the House and the first financial statement post Brexit. There was an air of expectation as we waited to see if he would fulfil the pledges made by his predecessor and even deliver some bold measures that would help boost our economy.
In fact, what we received was a rather cautious statement that more tinkered around the edges of change rather than packing any punch.
The biggest announcement was the plan to scrap the Autumn Statement and replace it with a Spring Statement; a move which brought some amusement to the House. Actually the shift, which means the annual budget will take place in the Autumn instead of March, does make good sense. The traditional March budget comes very close to the start of the financial year in April meaning companies and individuals can be hit by almost instant changes. On top of which, it doesn't allow much time for financial advisers and planners, or indeed MPs, to digest and understand the implications of changes much before they are implemented. This change will bring some welcome breathing space.
The Chancellor suggested the change also means the Spring Statement will be simply that - a statement of the financial position. Of course it remains to be seen if this really is the case or if the Government of the day is unable to resist the opportunity to spring some last minute measures upon us.
On the personal finance front, the key measure affected salary sacrifice. This has been widely regarded as a 'perk' which allows individuals to trade their salary for non-cash benefits in kind (e.g. an extra week's holiday), saving both the employer and employee national insurance contributions. The Chancellor has said that existing arrangements will remain in place until 2018. At the time of going to press, not enough information or detail has been provided on this important measure which may affect many of our clients. We will be keeping a close eye as more information is available.
For business, the news was the reduction in the Corporation Tax rate to 17% by 2020. However this was already pledged by the Chancellor's predecessor. While welcome, a drop of the rate to 15% would have been a more effective boost for business.
Chancellor Hammond has always had a reputation for being steady and assured. It remains to be seen whether his cautious strategy will provide the improvement in the productivity levels that he stressed this country needs.
For more analysis download the Autumn Statement summary.