When Theresa May made a speech to business leaders earlier this week the sudden appearance of a pair of moths in the background led some to joke that her Chancellor must have opened his wallet.

During the build up to today’s Autumn Statement Philip Hammond had been careful to play down any expectations of largesse, while media briefings had played up ‘Spreadsheet Phil’s’ reputation for caution. One cabinet colleague, quoted in the Financial Times, said by way of a curtain raiser to today’s event: “it will be deadly dull.” And a Hammond staffer described their boss as “the type of man that wears suits on aeroplanes”.

Despite striking an upbeat tone as he kicked off, pointing to IMF data showing the UK is the world’s fastest growing economy with strong employment, the Chancellor revealed some grim economic forecasts from the independent Office for Budgetary Responsibility. Growth has been downgraded from 2.2% to 1.4% in 2017 and from 2.1% to 1.7% in 2018. Meanwhile borrowing crept up to £68.2 billion. As a result, the goal of running a budget surplus has been abandoned until sometime in the 2020s.

Against this tough economic backdrop, the Chancellor focussed his limited firepower on targeted, modest and relatively quick wins.

On infrastructure, the focus was on potholes and pinch points with £1.1bn for local roads and a new superhighway to link the university towns of Oxford & Cambridge. There was also a £1bn broadband boost and £2bn for research and development to boost science, innovation and technology, as well as the announcement of a Productivity Investment Fund.

There was action to increase housing supply with affordable and rented property being prioritised above home ownership. Among the measures: £2.3bn fund for infrastructure to support the building of 100,000 new homes. Hijacking another populist Labour manifesto commitment, the Chancellor announced a clampdown on fees charged by letting agents and put energy companies on notice.

Had Hammond had his way that probably would have been the lot, but he needed to deliver a few sweeteners to help Theresa May’s so-called JAMs – those people who are “just about managing.”

So there was a rise in the minimum wage, a freeze on fuel duty and confirmation of rises to the personal allowance. Tweaks to how Universal Credit will kick in will help soften the impact of proposed welfare cuts. But the rise in insurance premium tax could be the sting in the tail, increasing prices for consumers and businesses.

All in all, this heavily-trailed autumn statement lacked the razzmatazz or white rabbits of previous events, but it was a sober statement for serious times. And as it turns out it is Philip Hammond’s last one – with the Chancellor turning the fiscal calendar on its head and replacing the Autumn Statement with a Spring Statement with a detailed budget to follow in the autumn. 

Newington’s clients will shortly receive tailored briefings setting out the detail of how the Chancellor’s Autumn Statement could affect their operations.  If you would like to receive a briefing or for more information, please contact [email protected]