Chancellor Philip Hammond used his first Autumn Statement to make jokes about Ed Balls, praise his predecessor and rewrite the fiscal rulebook.
Despite previewing many of his Autumn Statement announcements this morning, Mr Hammond still had surprises and digs to make during his speech in parliament this lunchtime.
As expected, Mr Hammond confirmed an increase in the national living wage from £7.20 an hour to £7.50, a crackdown on pension cold calling and a ban on letting fees for tenants.
His speech promised more housing, an extension of schemes designed to help first-time buyers, no changes to welfare but stated in light of increased longevity “spending commitments” would have to be reviewed in the future.
Kicking off his first Autumn Statement almost 10 minutes late, Mr Hammond said the Office for Budget Responsibility forecast was for growth to be 2.1 per cent in 2016 and in 2017 the OBR forecasts growth to slow to 1.4 per cent.
While he praised the work of his predecessor George Osborne, who lost his position as chancellor after the UK voted for Brexit and Theresa May replaced David Cameron as prime minister, he changed the former government’s fiscal targets.
In view of uncertainty facing the economy and slower growth forecasts, Mr Hammond said the Conservative government would no longer seek to deliver a surplus in 2019 to 2020.
He also confirmed he would publish a new draft Charter for Budget Responsibility, with three new fiscal rules.
The first rule is borrowing should be less than 2 per cent by the end of this parliament, the second rule is public sector net debt as a share of GDP must be falling by the end of this parliament while the third rule is welfare spending must be within a cap, set by the government and monitored by OBR.
On a positive note, Mr Hammond said the government has no plans for further welfare savings measures in this parliament beyond those already announced.
Former pensions minister Ros Altmann said this meant the triple lock was protected “thank goodness” and no more disability benefit cuts.
However he promised salary sacrifice would be taxed as normal from April 2017, excluding childcare vouchers.
Elsewhere in the Autumn Statement, as well as joking that if Mr Balls’ replacement as shadow chancellor John McDonnell could dance he too could look forward to a second career, Mr Hammond talked about cheaper housing.
The chancellor confirmed funding for 40,000 new affordable homes and announced a large-scale pilot to give the right to buy to housing association tenants.
He said: "We will focus government infrastructure investment to unlock land for housing with a new £2.3bn Housing Infrastructure fund to deliver infrastructure for up to 100,000 new homes in areas of high demand.
"And, to provide affordable housing that supports a wide range of need, we will invest a further £1.4bn to deliver 40,000 additional affordable homes.
“And I will also relax restrictions on government grants to allow providers to deliver a wider range of housing types."
Those hoping financial services fines would be reassigned to reduce regulatory costs had their hopes dashed when Mr Hammond announced a further £102m of Libor bank fines would go to the Armed Forces and Emergency Services charities.
Finishing his speech, he said this would be the last Autumn Statement – next year we have an Autumn Budget to look forward to , but simply a Spring statement responding to the OBR's forecasts with no major fiscal changes.
emma.hughes@ft.com
