By Michael Aitken
On Wednesday, Chancellor Philip Hammond took to the dispatch box to deliver the 2017 Autumn Statement.
I did think about walking you through the highlights in this article, analysing the party-politics at play throughout the speech, questioning why the Chancellor pledged more to Brexit (£3 billion) than he did to the NHS (£2.8 billion). But there’ll be more than enough column inches covering that.
We’ll get to the impacts on you – which I believe are relatively insignificant, in due course.
First, I wanted to look at the style and tone of Mr Hammond’s speech. With the aforementioned Brexit discussions on-going, not to mention rumoured in-fighting within the Conservative party, this Autumn Statement was always going to be a delicate one to pitch, both to the Houses of Parliament, and to the rest of us.
Evidently Mr Hammond and his speech-writers decided humour was the best way forward in this regard. He cracked a series of one-liners that, for a minute at least, made me wonder whether I should try and secure his services for the Magus Christmas Party!
First up was a gag aimed at Jeremy Clarkson. Reminding MP’s of the former Top Gear presenter’s dislike of driverless cars, the Chancellor revealed new funding to develop more environmentally friendly vehicles. “Sorry Jeremy, but that’s definitely not the first time you’ve been snubbed by Hammond and May!”
The next joke was at the Prime Minister’s expense, as Hammond reprised Theresa May’s infamous coughing fit at Tory Party Conference. “I did take the precaution of asking my Right Honourable Friend to bring a packet of cough sweets!” Mr Hammond scoffed. Theresa was in on it, handing Philip a packet of lozenges…
Then, introducing the latest economic forecasts by the Office for Budget Responsibility ('OBR'), which by the way saw economic and productivity growth forecasts significantly downgraded for the next five years, Hammond jested “This is the bit with the “long, economicky words,” a nod to a recent press story about Michael Gove.
There was also a reference to I’m a Celebrity (get me out of here), but you get the point by now. This was a hugely sensitive speech to deliver, time will tell whether Mr Hammond pitched it right.
The devil is in the detail
As you’d imagine from the hour-long, 8,000-word speech, there were plenty of pledges and promises to sift through.
The headline-grabber was undoubtedly the scrapping of stamp duty for first time buyers. With immediate effect, first-time buyers will no longer pay stamp duty on houses worth up to £300,000, or the first £300,000 of a property worth up to £500,000 – a saving of up to £5,000. Alongside this was the Government’s pledge to build 300,000 more houses a year by the mid-2020’s, putting property development – and the property market – at the heart of Britain’s future.
If you’re looking to sell a property, this should be good news as it should stimulate the market somewhat. While those of you with children looking to get on the property ladder will hopefully feel the benefit of this too.
In terms of pledges that may affect your long-term financial planning, there were no significant changes announced by the Chancellor. We've summarised what has changed – most of which will rise in line with inflation, below.
From April 2018:
- Income tax personal allowance up to £11,850
- Higher rate income tax threshold up to £46,350
- Capital gains tax yearly allowance up to £11,700
- State pension payments up by 3%
- The pension lifetime allowance up to £1,030,000
- ISA allowance remains at £20,000
- Junior ISA allowance up to £4,260
Clearly there were a raft of pledges mentioned in the Autumn Statement. The team here at Magus Private Wealth will be poring over the detail in the coming days, ensuring we’re across anything further that may affect us as a business, or any of our clients.
If you have any questions from anything you’ve heard or read in the news following the Budget though, please do not hesitate to get in touch with your Magus Financial Planner directly, or the Client Support Team.