Chancellor hands out sweeteners to families ‘Just About Managing’ in Autumn Statement dominated by a bleak post-Brexit economic outlook

Chancellor pledges to build thousands of affordable homes, scrap rip-off rental fees and hike the National Living Wage

Three million families boosted by changing how Universal Credit works, fuel duty frozen and £5bn pledged for infrastructure

But announcement dominated by difficulties facing the economy with slower growth predicted and budget surplus in 2019/20 no longer a target

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By ALAIN TOLHURST

23rd November 2016, 1:00 pm

Updated: 23rd November 2016, 5:37 pm

THE CHANCELLOR handed out a host of sweeteners to the country's JAMs as he delivered an Autumn Statement to get post-Brexit Britain "match-fit".

Philip Hammond's first mini-Budget as Chancellor saw him unveil a host of projects aimed at helping families who are 'Just About Managing', as he pledged to abandon his predecessor George Osborne's fiscal plans following a bleak economic forecast.

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Philip Hammond began his Autumn Statement with praise for his predecessor George Osborne

Philip Hammond addressed the House on the issues facing the UK economy

He also unveiled a freeze on fuel duty by scrapping a planned 2p-a-litre rise, along with ending letting agents' rip-off rental fees and a hike in the minimum wage for over-25s by 4%.

But the announcements formed part of a statement dominated by the difficulties facing the UK economy in the next few years as we leave the EU.

After revealing the Office for Budget Responsibility was predicting slower growth as the Brexit process unfolds, Mr Hammond said he was no longer targeting a budget surplus in the year 2019/20.

Instead he focussed on unveiling a series of announcements to try and create in his words "an economy that works for everyone", with a plan aimed at boosting productivity and helping low-income workers.

£1.1bn to reduce congestion and upgrade local roads and public transport, £1bn to invest in full-fibre broadband and trialling 5G networks, and £2bn more per year in research and development funding by 2020-21

Mr Hammond said there was no new date for the deficit to be eradicated, adding: "But the Prime Minister and I remain firmly committed to seeing the public finances return to balance as soon as practicable, while leaving enough flexibility to support the economy in the near term."

He said: "While the OBR is clear that it cannot predict the deal the UK will strike with the EU, its current view is that the referendum decision means that potential growth over the forecast period is 2.4 percentage points lower than would otherwise have been the case."

The Chancellor vowed to 'write a new chapter in our country’s history'

And the Chancellor also revealed debt will soar to an eye-watering 90.2% of GDP in 2017/18.

Borrowing is set to be £68.2billion this year and £59billion next year, compared with previous estimates of £55.5billion and £38.8billion.

And in 2018/19 the Government is set to borrow £46.5billion, rather than the £21.4billion forecast.

But he said employment will continue to rise in each of the next 5 years, predicting half a million more people forecast to be in work by 2021.

The pound also spiked during Mr Hammond’s speech, before falling back again as he finished up his statement to MPs.

The UK's GDP growth forecast based on today's figures

Mr Hammond's predecessor George Osborne watched on

Mr Hammond began his statement with praise for his predecessor, paying tribute to Mr Osborne before adding that his "style will of course be different".

In his March Budget, the former Chancellor told MPs he was forecast to deliver a £10.4 billion surplus in 2019/20 - but Mr Hammond said there was now expected to be £21.9 billion of borrowing.

He stressed the OBR report confirmed the "underlying strength and resilience" of the British economy, but acknowledged there was an "urgent need" to address long-term weaknesses.

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Philip Hammond freezes fuel duty for another two years in Autumn Statement

The 60-year-old said: "This Autumn Statement responds to the challenge of building on that strength, while also heeding the warnings in the OBR's figures, as we begin writing this new chapter in our country's history.

"It restates our commitment to living within our means and it sets out our choice to invest in our future.

"It sends a clear message to the world that Britain is open for business and it provides help to those who need it now."

He had told Cabinet this morning his Autumn Statement “is focused on preparing and supporting the economy as we begin writing a new chapter in our country’s history”.

But as he left No11 this morning he ducked the usual photocall for the press, and rather than posing with his Autumn Statement document for the cameras got straight into his minsterial car - in keeping with his reputation as "no-frills Phil".

What is 5G? Superfast broadband explained

- The G in 5G stands for "generation". The first generation was created in the 1990s
- It will increase download speeds up to 10GB per second
- Load times will also increase significantly
- Currently network operators are working on different variations of the technology
- It is set to provide up to a million connections per square kilometre
- The Next Generation Mobile Networks Alliance says it will be rolled out by 2020

Mr Hammond ducks the traditional photocall outside No 11 on his way to the Commons

Shadow Chancellor John McDonnell said the statement proved the government's long-term economic plan had failed

But responding, Shadow Chancellor John McDonnell said his first set piece moment had placed on record the "abject failure of the last six years".

He said the Tories had failed on its deficit target, debt target and welfare cap, adding: "The verdict could not be clearer - the so-called long-term economic plan has failed.

"As the Treasury's own leaked paper revealed, the Government knew it had failed before the referendum result was announced.

"We now face Brexit, the greatest economic challenge of a generation, and we face it unprepared and ill-equipped."

An aide carries the Chancellor's ministerial briefcase as they leave No 11 for the House of Commons

The Treasury said Mr Hammond's package today was designed to "improve the living standards of ordinary working class people and their families", in line with the ambitions set out by Mrs May in her keynote speech to the Conservative conference last month.

Key points from the Autumn Statement

Here are the Chancellor's proposed changes:

National Living Wage increase
National Living Wage rises by 30p an hour giving £500 more a year to lowest paid Brits

But critics said the Universal Credit reform failed to compensate for the losses low-paid workers will face from previously-announced cuts.

He is reducing the rate at which benefits are withdrawn from 65% to 63%, meaning that workers will lose 63p, rather than 65p, of their welfare for every pound they earn above their work allowance.

The first annual increase in the National Living Wage brings it closer to the Government's 2020 target of £9 an hour, but leaves it well below the independently-calculated Living Wage of £8.45 across the UK and £9.75 in London.

An additional £4.3 million a year will be committed to enforcing the payment of statutory minimum wage levels.

And the scrapping of rental fees – which Shelter say can cost one in seven tenants an extra £500 - represents a shift from a focus by David Cameron’s Government on helping homeowners to easing the burden on private renters under Mrs May.

Mr Hammond also revealed a consultation will begin before Christmas to look at ways to tackle pensions scams, including banning businesses from cold calling someone about their pension.

And he announced a range of investment to get the economy moving in the right direction, saying: "We have chosen to borrow to kick-start a transformation in infrastructure and innovation investment.

"But we must sustain this effort over the long term if we are to make a lasting difference to the UK's productivity performance."

The details included a new National Productivity Investment Fund of £23billion to be spent on innovation and infrastructure over the next five years, and additional investment in research and development, rising to an extra £2 billion per year by 2020/21.

There is also a £2.3billion Housing Infrastructure Fund aimed at delivering up to 100,000 new homes in high-demand areas, and £1.4billion made available to deliver 40,000 additional affordable homes as well as an additional £1.1billion investment in English local transport and more than £1billion in digital infrastructure.

To help pay for the extra investment Mr Hammond set out a range of tax hikes, including a crackdown on "unfair" salary sacrifice schemes which are used to reduce levies on employee benefits.

From April 2017 he will align the employee and employer National Insurance thresholds at £157 per week, costing firms up to £7.18 a year for each worker.

Mr Hammond finished by explaining this Autumn Statement would be the last

"The Government will take action now to reduce the difference between the treatment of cash earnings and benefits, he said:

"The majority of employees pay tax on a cash salary. But some are able to sacrifice salary and pay much lower tax on benefits in kind.

"This is unfair, and so from April 2017 employers and employees who use these schemes will pay the same taxes as everyone else."