Autumn Statement: Improved productivity at heart of Hammond's economic policy
Philip Hammond's first - and last - Autumn Statement announced a raft of spending giveaways worth £36bn over the forecast period, and modest tax increases. The spending measures will largely be funded through new borrowing.
This statement makes clear that the big theme of economic policy under Mr Hammond will be improving productivity. He wants to send a powerful signal that the UK is open for business and that the Government has a plan to grow the economy through this Parliament.
Mr Hammond wants to strengthen productivity through targeted investment, not with big increases in Government spending.
Entrepreneurs in the Northern Ireland technology sector will be looking to see how they can benefit from the National Productivity Investment Fund's extra £4.7bn of R&D funding by 2020-21. There will likely also be further benefits from the decision to review the already competitive R&D tax credit regime, an extension of which would be welcomed by all businesses that qualify for this relief.
Northern Ireland will directly benefit from an additional £250m infrastructure capital funding over the period to 20/21 which could help with major developments including potentially the York Street Interchange, A5 and Belfast Transport Hub.
The Chancellor has confirmed that the Government will continue to follow the business tax road map, including the reduction in the corporate tax rate from 20% to 17% by 2020.
The Autumn Statement documents also confirm that the Government will continue to work with the Executive towards the introduction of a new rate of corporation tax in Northern Ireland, subject to the Executive demonstrating it has placed its finances on a sustainable footing.
There were very few new tax measures announced, although it seems that almost all previously announced changes have been confirmed. One that is new and welcome is a commitment to amend the Northern Ireland corporation tax regime to give all SMEs trading in Northern Ireland the potential to benefit.
Glenn Roberts is tax partner at Deloitte