Unravelling the Autumn Statement
As Chief Operating Officer of the NAPIT group, a national organisation whose members are heavily invested in the UK economy, the recent Autumn Statement unveiled by the chancellor is in no doubt an important issue for us to consider moving forward.
With the Chancellor releasing his Autumn Statement on the 23rd November, a host of new commitments were made which could greatly impact the industries which our members operate in. These commitments cover housing, taxation, infrastructure and the future of low-carbon emission vehicles and this blog will look at the potential impact on each area.
To begin, we welcome the Government’s pledge to fund future house building projects and provide more affordable housing across the country. We had mentioned in a previous blog that the Government could face difficulties in achieving its target of building one million homes by 2020, yet the new proposals appear to provide some detail as to how the target will be reached. It was proposed that £2.3 billion would be spent on a housing infrastructure fund which could provide 100,000 new homes in high demand areas, coupled with a further £1.4 billion to deliver 40,000 affordable homes. We are also optimistic about the future of house building due to the announcement of a National Productivity Investment Fund (NPIF). This fund will include a further £7.2 billion to ‘accelerate’ the housing supply and support the infrastructure necessary for property construction.
It was also confirmed that a white paper is currently being developed by the Department of Communities and Local Government (DCLG) which will focus on the issue of housing in more detail which we await with anticipation.
The focus on infrastructure and construction within the Autumn Statement has given us a source of optimism in the years ahead. A National Infrastructure Commission (NIC) has been proposed which would provide advice on the country’s strategic infrastructure needs and how to address them. Investment in infrastructure will be provided by the NPIF and will see an increase of 60% in annual central Government investment from £14 billion in 2016-17 to £22 billion in 2020-21. This focus on infrastructure is ultimately positive for our members, and will hopefully lay the foundations for an economy which is supported by a strong infrastructural base.
Similarly, we welcome the announced decrease in corporation tax to 17% by 2020, alongside reducing the burden of business rates by £6.7 billion over the next 5 years. This reduction in corporation tax will help our members to invest more into the future success of their businesses, employ and train more staff, and give new businesses a further stimulus to find their feet. Alongside corporation tax, we also welcome the proposal to raise the personal tax allowance from £11,000 to £12,500 by 2020, meaning that thousands of people will be taken out of the income tax threshold. The higher rate threshold is also set to be raised from £43,000 to £50,000 by 2020, which will again result in less people having to pay the current 40% income tax rate and provide more disposable income.
Finally, NAPIT are pleased to hear about the Government’s commitment to invest further in low emission vehicles and charge-points for electric vehicles. According to the Autumn statement, the NPIF will invest £390 million by 2020-21 to support ultra-low emission vehicles and renewable fuels. It was also announced that until March 2019 the Government will offer 100% first-year allowances to companies investing in charge-points for electric vehicles. We hope that these allowances will lead to the development and rollout of more charge-points, since the number of electric cars is rising rapidly year on year.
To conclude, we are optimistic about the future and welcome the Governments proposals to invest in infrastructure, lower taxation and increase their efforts to roll out low-emission vehicles. Critically, the commitments to house building are something which we will keep a close eye on and we hope that the proposals will lead to the construction of many more homes in the years ahead.