The Autumn Statement is Chancellor Philip Hammond’s opportunity to update both MPs and the public on his plans for the next 6 months. It is used as a chance to announce any big spending changes (new taxes, budget cuts, changes to benefits etc.) and is one of two statements that the Chancellor makes to the Commons each year.
The first piece of big news is that this is the last ever Autumn Statement (try to hold back the tears). Hammond announced on Wednesday that he would axe the statement in favour of an Autumn Budget (the second, slightly bigger statement). Until now, the Budget always took place in the spring but now the two are being switched around. In practice, it means little…
Probably the biggest headline was that austerity is on its way out. The strategy involves cutting public spending in order to reduce the deficit and it was a big part of David Cameron and George Osborne’s economic policies. Now, new Prime Minister Theresa May has signalled and end to that, partly due to Brexit, and wishes to invest in new infrastructure in order to reduce the scale of any economic hits that come about due to the UK leaving the EU.
Few taxes will be increased either. In fact, the threshold for some levies such as income tax will be risen. This means that you have to earn more to pay any tax.
The other big stories are transport and prisons. Britain will get £1.3 billion to deal with congestion on the roads over the next parliament, £1.1 billion to support local transport networks and £220 million to ease traffic ‘pinch points’. Meanwhile prisons (a department that has been under fire recently) will get 2,500 new officers.
We’ve become used to Chancellors’ statements being controversial announcements about cutting benefits or spending. I think that this is a much less controversial one, and perhaps a sign that Theresa May genuinely wants to help those who are ‘just coping’. The measure that opposition parties really got annoyed about though was when Hammond announced that the target of a budget surplus (no more debt) by 2020 had been abandoned.
The Conservatives’ wanted to eliminate the deficit by 2015, then 2020, and now ‘as soon practicable’. This has really angered people, especially those who have been campaigning against austerity from the start. It’s understandable that Brexit has muddled everything up a bit, but for some it’s not a good enough excuse.
I said that this statement would be the first impression of what a May government is going to look like. We now have an idea, but Brexit is going to have a huge impact on everything and it could be either a huge success or a total disaster.