Autumn Statement 2016: LIVE

Autumn Statement 2016: LIVE

16.29

Andrew Jackson, Chairman of the UK200Group’s Tax Panel and Head of Tax at UK200Group member Fiander Tovell, says the changes to employee expenses and benefits leave employers open to increased scrutiny: "This may mean more detailed rules that employers have to be aware of, and may mean that people getting the same reward package get taxed differently, which seems unfair.  The problem is that tax and National Insurance aren’t aligned: if the Chancellor would do that – as suggested by the Office of Tax Simplification – then these problems would go away and employers and employees could just get on with things without having to look over their shoulders all the time.”


16.10

Jeanette Makings, Head of Financial Education at Close Brothers Asset Management, says the changes to workplace benefits pose a three-fold problem; implementing the changes, effectively communicating the changes to their workforces, and helping them to effectively replace this benefit to just stand still in terms of their finances.

She continues: "Without the right level of education and communication, the impact of an unexpectedly lower pay packet will impact on staff members’ finances and their financial wellbeing. Equally, it is vital that businesses are able to effectively convey notable exclusions, such as pensions, from the new regime, lest long-term savings suffer.”  


16.03

All the key take homes for HR can be found here


15.25

Chris Jones, Chief Executive of the City & Guilds Group, hopes that the new raft of policies around education and training, brings stability to the skills sector: "The Government’s £23bn commitment to boosting productivity, and therefore to long-term investment in skills, is encouraging. There has been extensive change to skills policy over the past few years, and if we want the planned skills reforms to be successful, consistency is key. 

"Furthermore, the £13million fund to support firms’ plans to improve management skills will help to bridge the productivity gap."


15.12

To read more on how HR and businesses have reacted to the Autumn Statement, click here


14.28

Crowley Woodford, Partner at law firm Ashurst, says the changes to benefits packages are bad news for workers: "Salary sacrifice arrangements have become a hugely popular and important feature of an employee's overall benefit package applying to such diverse items as gym membership and restaurant discounts. ‎The announced changes will be bad news for employees as it will inevitably mark the beginning of the end for many salary sacrifice arrangements.‎ ‎This will up the ante for employers in the recruitment and retention of key talent."


14.24

Mark Groom, Tax Partner at Deloitte, explains the new proposals for the taxation of benefits in kind and salary sacrifice schemes, which is likely to impact on millions of employees and impact the day to day running of HR: “The new rules will apply whenever a benefit is provided in conjunction with salary sacrifice. It will come as a surprise to many that the new rules will also apply in cases where an employer offers employees a choice between a benefit and a cash alternative, if the benefit is not wanted. 

“One of the reasons for the change was the perceived tax cost of salary sacrifice schemes; however, the measures are only anticipated to raise £85million in 2017-18 and £235million per annum thereafter."


14.18

Ian Brinkley, Acting Chief Economist at the CIPD, welcomes the decision to invest £13million an initiative led by by Sir Charlie Mayfield to help improve the quality of management in the UK: "This is a crucial step forward in cracking the UK’s productivity puzzle which the Chancellor highlighted as a key area of focus and investment for the Government. However, attempts to improve workplace productivity will continue to be undermined without fundamental changes to skills policy, particularly in relation to apprenticeships, lifelong learning and adult skills provision.

“The decision to invest £1.8bn in Local Enterprise Partnerships is also welcome, given the need to provide more support for SMEs at a local level to help and encourage them to invest more in the skills of their workforce and enhance their management capability to boost employee engagement and productivity.”


13.51

The UK's low producutivity in comparison to competitors was also touched upon by Hammond.

Ann Francke, CEO of the Chartered Management Institute, has this to say on the issue: “Productivity is key to the UK’s success, and it’s clear the Chancellor recognises that with the commitment to a National Productivity Investment Fund. But innovation and infrastructure are not the only issues to consider. Poor management costs our economy £84billion each year according to recent research from Investors in People, and the OECD claims it’s the key cause of the UK’s 21% productivity gap with G7 competitors. 

“Our businesses are operating in a period of great uncertainty. This makes it difficult to plan ahead and affects how we resource and develop our employees. It’s tough to attract and retain skilled managers, and we need two million more by 2024. So we know that building management capability is critical for growth in the UK and we hope that the welcome focus on productivity will include the need to improve our management structures.”


13.45

Guy Stallard, Director at KPMG UK, comments on the increase in the National Living Wage: “As an employer that has been paying the voluntary Living Wage for ten years, our experience is that it delivers real and tangible business benefits like improved staff morale, rise in service standards, improvement in the retention of staff and increase in productivity. 

“It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course, change cannot happen instantly, but making an initial assessment is an important first step.”


13.30

And that's it! HR Grapevine's first, and last, live blog of the Autumn Statement. Reaction to follow...


13.29

This Autumn Statement has, Hammond concludes, responded to the challenges the country faces, and the challenges of a nation living beyond it's means. 


13.28

Hammond plays musical chairs with Government fiscal announcements.

He says this will be his first and last Autumn Statement: he is abolishing it. 

Next year's Budget will also be the final Spring Budget. From then on there will be an Autumn Budget. 

And then, after that, there will be a Spring Statement - this will respond to the forecasts from the OBR, set up by Osborne at the beginning of the decade. 

Got all that? 


13.26

The fuel duty rise is cancelled for the seventh year in a row. 


13.25

Hammond will, as widely anticipated, ban letting agent fees for tenants. Pension cold-calling will earn the same treatment. 


13.21

...the National Living Wage will, as reported by HR Grapevine earlier today, rise from £7.20 to £7.50 from April 2017. 


13.20

Taxable personal allowance will rise to £11,500 in April 2017. It will rise to £12,500 by the end of this Parliamnet. The 40p threshold will rise to £50,000 over the same period.

Onto Osborne's apeing of Tony Blair, the National Living Wage...


13.19

The UK's tax gap is one of the lowest in the world, Hammond claims. As a result, there will be a new penalty for people who use a tax avoidance scheme HMRC closes down.


13.17

From April 2017, employers and employees who use benefits in kind schemes will pay the same tax as everyone else.

However, there will be exceptions, Hammond teases. For example, child care and cycle to work schemes. 


13.16

Insurance premium tax will rise from ten per cent to 12%.


13.15

Rural rate relief will be increase to 100%.


13.14

Britain wants to remain the premier place for business, so, Hammond explains, the Government will stick to the business tax plans set out earlier this year.


13.13

The next parliament will have to tackle the looming problem of an ageing workforce, Hammond warns. 


13.12

Ministry of Justice will get extra funding for another 2,500 prison officers.


13.11

Spending limits imposed on Government departments will remain in place, and will rise with inflation from 2021-22. 


13.10

Time for benevolence... 

Money from Libor fines will go to service charities, while money from the tampon tax fund will go to women’s charities.


13.08

Lovers of Pride and Prejudice rejoice! Wentworth Woodhouse, near Rotherham, a model house from Jane Austen's aforementioned novel, will get a £7.5million Government grant. 


13.07

Devolution is still on the menu. A new city deal for Stirling, Scotland, is being negotiated.

This means every city in Scotland will be on course to get a similar deal. City regions will also get new borrowing powers. 


13.05

Newsnight's Evan Davis isn't feeling too happy about this: 

£400million will be invested in start-ups to stop larger firms buying them. 


13.02

Currently, the Government's spending 0.8% of GDP on national Infrastructure. As a result, spending on this will between one per cent and 1.2% from 2020. 

This will  will provide the backbone to the Government’s industrial strategy, Hammond says. 


13.00

Hammond says the UK needs world-class digital infrastructure, and needs to be a leader in 5G. As a result, over £1billion will be invested in this. 


12.59

There will be an extra £1.1billion invested in English transport network. This will please Labour leader Jeremy Corbyn, Hammond jokes. 


12.58 

The Government will publish a White Paper on housing and home ownership. Therefore, infrastructure spending will focus where this area can be encouraged. 


12.56

Onto productivity: the USA and Germany are 30 points ahead of us in productivity. This means it takes a German employee four days to make what it takes a UK worker to make in five. The end result? Longer hours and lower pay.  


12.55

High-value investment in infrastructure will be prioritised. Th Government's "hard-won credibility" means his can be funded by extra borrowing. Everything else in this Statement will be funded by taxation and spending cuts. 


12.51

Hammond makes the obligatory joke about Ed Balls, who has swapped Whitehall for Strictly Come Dancing...  


12.50

Government borrowing will be 3.5% this year. By 2021-22 it will fall 0.7%. 


12.46

The Government will aim to get a budget in surplus in the next parliament, while getting borrowing down to two per cent in the current one. 


12.45

The Government will not balance the budget by 2020. 


12.44

Growth is expected to be 2.1% this year, and 1.4% in 2017. In 2018 it will be 1.7%, in 2019 it will be 2.1%, it will hold steady the following year, and rise to 2.1% in 2021. 

Due to brexit, growth will be 2.4% lower. 


12.42

Hammond pays tribute to his predecessor, George Osborne. 


12.41

Hammond says we need an economy that works for everyone; where every part of the country is part of national success. The Government will confront these challenges. 


12.40 

It's about to start...


12.35 

Not related to the Autumn Statement, but Prime Minister (PM) Theresa May has ruled out a second EU referendum. She didn't however, rule out a second referendum on Scottish independence during her current term as PM.


12.25

Kevin Green, the CEO of the Recruitment & Employment Confederation, had this to say earlier about what employers want: "Employers are calling for interventions to drive forward projects such as the Northern Powerhouse and to bolster the economy. Now is the time for a clear message from Government that UK businesses can expect support to ensure they can weather the continued uncertainty of the EU negotiations." 

More on that can be found here


12.20

Sky News' Political Editor has tweeted this: 

 


12.15

Chancellor of the Exchequer and MP for Runnymede and Weybridge, Philip Hammond, is set to present his first Autumn Statement.

So, what should we expect?

As reported earlier, workplace salary sacrifice schemes, the National Living Wage, and Universal Credit are all set to be changed. Find out more here



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