Today, our panellists give their thoughts on what ought to be in the Chancellor’s first Autumn Statement. On Wednesday afternoon, we will publish their instant responses to Hammond’s speech.
Suella Fernandes, MP for Fareham
Maintaining long term growth depends on productivity. However, the UK has not seen a recovery in productivity since it slumped over a decade ago. Compared to the USA, Germany and France, we still have a long way to catch up in terms of output per hour. I would therefore like to see investment in R&D capacity of our economy, investment in our network infrastructure- two key elements that will improve the productivity of the UK economy.
This could be done by continuing to support investment in skills, apprenticeships, science and technology training in the UK. Tax breaks for scientists, innovators, and technology investors would go far in attracting the right talent to the UK. Emerging sectors that could benefit from such support include robotics, artificial intelligence, biotechnology and medical technology. In addition, infrastructure improvements in road, rail and broadband would significantly enable our entrepreneurs and industrialists to increase their productivity. Such support would provide a much-needed boost to job creation and growth.
James Frayne, ConservativeHome columnist
Since May took office, she’s talked about the importance of those just about managing. Ed Miliband talked about the squeezed middle; Nick Clegg about “alarm clock Britain”. Despite the talk, no politician since Blair has focused hard on these lower middle class, provincial English families.
Hammond’s statement is a test of how serious May’s Government is about shifting focus to the lower middle class – people who aren’t poor but are struggling to secure or maintain middle class status. What do these voters want? Three things: policies that make their everyday lives easier; increase their disposable income; and instil fairness.
With these in mind, we should see things like: cuts in fuel duty and Vehicle Excise Duty to reduce the costs of driving; road building to make commuting easier; targeted VAT cuts on consumer goods (particularly for home improvements); help with childcare costs; and house building. But the Government should also look at clamping down on aggressive tax avoidance by big companies – in the name of fairness.
We need to see that the just about managing focus is more than a communications exercise.
David Skelton, founder of Renewal
The referendum result made clear the stark divide facing the country. This Autumn Statement must take strides towards healing those divides. As the Prime Minister made clear in her conference speech, the government priority should be to heal social divides and to create an economy that genuinely does work for everybody. Angry voters have made clear in the referendum that they’re sick, in the words of the jargon, of ‘just about managing’ to keep their heads above water while they perceive that the architects of the banking crash haven’t been the victims of the crash and its aftermath.
The economic and social scars left by deindustrialisation and a failure to replace old industries with new ones mark some of the fault lines of the national divide. Research by the Coalfields Regeneration Trust showed that of the 42 local authorities that once had a coalfield some 41 of them voted for Brexit. Government should invest in skills and infrastructure in these long neglected communities, enabling them to revive and take advantage of the emerging economy.
Housing remains a stark illustration of a divided Britain, with the “have-nots” further away from the housing ladder than at any time for decades and often spending a great bulk of their income on poor quality private-rented accommodation. This Autumn Statement should include commitments to a government backed housebuilding programme of low-rent, high quality housing with a fast track to rent to buy. And affordable housing should be genuinely affordable.
Some on these pages and elsewhere have argued for more pure economic liberalism, with a dollop more of Gladstonian austerity thrown in. In doing so, they are misunderstanding the country and its issues as badly as the Remain campaign did during the referendum campaign. Government has a role to play in investment, infrastructure, community regeneration and making Britain a leader of the new industrial revolution through a comprehensive industrial strategy. This ambitious goal of economic restructuring and social renewal should be the goal of this Autumn Statement.
Alan Mak, MP for Havant
Boosting Britain’s productivity and future-proofing our economy ahead of Brexit are key priorities. Continued investment in science, technology and innovation is the best way to achieve both goals as Britain enters the Fourth Industrial Revolution (4IR). Last week, I launched a report with 20 policy ideas about how Britain can lead the world in the 4IR by putting it at the heart of our new Industrial Strategy. On Wednesday, further investment from the Chancellor can help Britain stay ahead of our competitors.
New technologies and products like advanced manufacturing, robotics, artificial intelligence, driverless cars, biotech, life sciences, and 3D printing are key to Britain’s economic growth in the years ahead. They’ll launch new businesses, create millions of new jobs, help upskill our workforce, and generate substantial wealth for the nation. More support for the 4IR in the Autumn Statement will build on British success stories like London-based start-up Deepmind Technologies (now world-leaders in artificial intelligence) and Graphene, the ultra-strong material developed in Manchester.
With finances tight, we must carefully target investment to deliver the maximum benefit for our economy. Backing the 4IR does just that: it generates disproportionately large economic returns, helping the Treasury get more bang for its buck.
Laetitia Glossop, former PPC
The UK’s vote to leave the EU in June gave us a change, not only of Chancellor, but also the economic parameters wherein he operates. In Wednesday’s Autumn Statement, Philip Hammond will need to announce policies mitigating the prevailing climate of uncertainty, and supporting the positive trajectory of the UK economy.
Measures to boost UK infrastructure projects would have significant impact; the National Infrastructure Development Plan details numerous “shovel ready” projects in the U.K. – the challenge is funding their delivery. It would be good to see the Chancellor introduce legislation to facilitate and encourage private-sector financing of these projects.
Other desirable lines include initiatives on housing addressing the decline in social housing being built, availability of housing nationally and challenges facing Generation Rent. Greater disclosure and scrutiny of overseas investors would be positive. Planning laws, both regarding approvals and time taken by developers to act on approvals, also seem plausible areas of change.
Following much change to pensions in recent years, 2016 may see lifetime allowances stabilise.
In an Autumn Statement widely touted to be for the JAMS, expect also to hear measures supporting sustainable job creation and, per the Conservative manifesto, acceleration of increased income tax thresholds.
Andrew Allison, Head of Campaigns for The Freedom Association
I am hoping that this Autumn Statement will be gimmick free, which, after George Osborne’s reign as Chancellor, will be a blessing. Reading press reports, it looks as if Philip Hammond wants to return the Autumn Statement to what it’s intended for: an annual report on the state of the Government’s finances and the economy. He will then let individual departments make their own announcements. No white rabbits out of the hat for Hammond.
Free markets make people free. They are responsible for lifting people and countries out of poverty, and what we don’t want to hear from the Chancellor on Wednesday is the Government trying to pick winners. Government is always appalling at picking winners, which usually goes hand in hand with taxpayers’ money being thrown down the drain.
We still have a sizeable deficit and Government debt is close to £1.8 trillion. Hammond cannot put his head in the sand and hope this problem will go away. He must give a clear indication of when the Government intends to balance the books – a plan that’s not pie in the sky, but based on sensible spending reductions.
Future generations will inherit the profligacy of previous generations. Any further spending on vanity projects will make this worse.
Ryan Shorthouse, Founder and Director of BrightBlue
Too many of those on modest incomes have struggled financially in this decade thanks to stagnant wages and unnecessarily deep cuts to working-aged benefits. For political and moral reasons, the Chancellor urgently needs to invest in their financial, human and social capital.
First, money. The priority should be softening proposed cuts to Universal Credit above tax cuts and the allocation of universal benefits for higher earners. Instead of raising the Personal Tax Allowance, the threshold for paying employees’ National Insurance should be lifted. A contribution supplement in Universal Credit and Maternity Pay should be introduced to reward those with long work histories. Parents should have the option to take out government-backed, income-contingent loans to help smooth crippling childcare costs.
Second, education. To really help children from less advantaged backgrounds, the money for expanding grammar schools should instead be spent on building a high-quality pre-school system and attracting the best teachers to schools in poorer areas. Especially in a flexible labour market, people need to be able to upskill and reskill throughout their lives. Government should introduce generous lifetime loan accounts to enable anyone over the age of eighteen to afford any type of higher education course, repaying gradually through their monthly salary.
Finally, having strong relationships can help those who are struggling. The Government was right to adopt Bright Blue’s policy last year of allowing grandparents to take any unused Shared Parental Leave. Now, the Transferable Tax Allowance should be augmented so grandparents who leave work to look after grandchildren can transfer their tax allowance to their children who they are helping out.
Hannah David, Director of the Conservative Party Policy Forum and former PPC
One difference between the Autumn Statement and the Budget, is that the Chancellor is allowed to drink alcohol during the latter speech. Should his announcements in this week’s Statement instil confidence, his need for a drink in April could be less urgent.
The supply of housing is of course a hot topic. We have an ongoing problem in how we encourage the release of developable land in the possession of private land owners. One option may be to remove the Capital Gains Tax liability on the sale of sites over a certain size for the next five years. Such an exemption would only be applicable on the sale of the land to residential developers, with planning permission in place, with the additional condition that the development must commence within the five-year period. The incentive for the seller is obvious and the buyer would have a large site, ready to go. With affordable housing requirements in place, both market and affordable housing would be provided and in terms of revenue lost from the tax change, the increased economic activity should generate sufficient taxes to cover the lost Capital Gains Tax revenues.
If the Chancellor announces initiatives like this to stimulate land supply for residential development, maybe I will be the one raising a glass in April.
Raffy Marshall, History student
The weak pound has hacked a sizeable chunk out of the real-terms Defence Budget. The military is dependent on foreign-built equipment priced in dollars and therefore now faces a shortfall of up to £700 million annually. If Chancellor does nothing the resulting procurement disaster will effectively produce another round of defence cuts.
Trump is an enigma but some level of American disengagement from European defence now seems likely. The uncertainty surrounding the President-elect is of itself potentially destabilising and pro-Kremlin rhetoric continues to emanate from Trump Tower. This is not the time to lose more capabilities. At the very least the Chancellor should reassure the military that real-terms defence spending will not fall further. Ideally he would go further and begin re-building the UK’s capacity to conduct a somewhat independent foreign policy.
Defence aside, the Chancellor should be fiscally responsible. Handouts, tax-cuts and infrastructure spending have been vigorously urged on him from all sides. This is gesture politics of the worst kind. Tax cuts or white-elephant projects will delight the government benches but likely leave the economy unmoved. Our comparatively low productivity and uncertain relationship with the EEA can’t be addressed by splurging borrowed money.
Amandeep Singh Bhogal, former PPC
Six years of the Conservatives with our long term economic plan have seen Britain earn a hard-won reputation of fiscal credibility, record employment and robust economic growth. We have already cut income tax for 31 million people. Now let’s cut it completely for earnings up-to £12,500 and increase the top-rate-of-tax threshold – taxpayers know best how to spend and prosperous businesses invest to expand – so cut corporation tax to 15 per cent.
Road congestion costs Britain around £13 billion annually and underperforming railways stifle productivity. High productivity needs productive infrastructure. We have invested £15 billion in Crossrail. We need to replicate that commitment across Britain to supercharge productivity so people and businesses can seize the opportunities.
Britain stands tall as a top destination for Foreign Direct Investment which created 1,600 jobs every week in 2015-16. The world is queuing to invest in Britain and we must focus more of our inward investment into lines of credit and insurance helping our small business exporters break into new markets. A new ‘Britannia Bond’ could help us achieve the 2020 export ambition of £1 trillion.
Corbyn will undoubtedly remain busy making jam in Islington North. We Conservatives must crack-on with the job of delivering a bespoke Brexit building a match-fit Britain which delivers for the J.A.M.