Autumn Statement: Hammond unveils £2.3bn housing infra fund, moves Budget to autumn

UK Chancellor Philip Hammond said the government would invest heavily in infrastructure and abolished the Autumn Statement as he made his first set piece speech since taking over from George Osborne in the wake of the Brexit vote.

The Office for Budget Responsibility (OBR) said that that growth is expected to be 2.4% lower in 2017 than forecast due to the uncertainty has arisen from Brexit.

The British economy is expected to grow 1.7% in 2018, 2.1% in 2019, 2.1% in 2020 and 2% on 2021.

The infrastructure projects will target housing, transport, digital communications and research and development to spent between 2017-18 and 2021-22.

Hammond pledged the government will spend between 1% and 1.2% of gross domestic product on infrastructure from 2020, up from 0.8% currently spent.

The Chancellor said that £450m is to be spent on trial digital signalling on railways to “achieve a step-change in reliability”, and £390m to “build on our competitive advantage in low emission vehicles and the development of connected autonomous vehicles”.

A £1bn pure fibre and 5G infrastructure fund will be used to invest in rolling out broadband across the country.

To tackle the housing crisis, £1.4bn was allocated for 40,000 new affordable homes in England and a £2.3bn housing infrastructure fund for 100,000 new homes in areas of high demand.

Borrowing a Labour policy, Hammond said he would ban letting agents in England from changing upfront fees to tenants, which will affect about 4.3m households in private rental accommodation.

He said that the government is considering measures to help savers, by proposing a new NS&I savers bond, which will offer a 2.2% interest rate for a three year product.

The National Living Wage will increase modestly to £7.50 from £7.20 an hour from April 2017, but seems unlikely that the government will meet Osborne’s pledge to reach £9 by 2020.

Over 2017, the government will aim to raise £2bn, of which £630m will come from closing the flat rate VAT, the employee shareholder status and the penalty for repeated tax avoidance.

Meanwhile, insurance tax is to rise to 12% from 10%, along with crackdown on whiplash claims, and corporation tax will drop to 17% by 2020.

Hammond also said there would be no more Autumn Statements, ending the policy of announcing tax changes twice a year. Instead, there would now be a Budget in the autumn.

"The move to a single fiscal event will be made after the spring Budget in 2017. There will be a second Budget before the end of 2017 to switch to the new timetable, which will then be followed in future years," the Treasury said.

"The Office for Budget Responsibility is required by law to produce two forecasts a year. One of these will remain at Budget. The other will fall in the spring and the government will respond to it with a spring statement."