Autumn Statement 2016 - Kuits' predictions23 Nov 2016
Executive partner, Robert Levy, shares his thoughts on what he thinks will make up this year’s Autumn Statement.
What does the Chancellor’s start in government tell us about the likely priorities for the Autumn Statement?
The Autumn Statement offers the Government the first opportunity to deliver on Theresa May’s promise to govern for all the people and to stem the tide of the anti-establishment feeling that lay behind the Brexit vote here and the election of Donald Trump in the US. She has less than four years to deliver (assuming no early election) and it starts now. So, expect increased investment in the economy, borrowing to fund infrastructure projects, housing and transportation, and expect moves to stimulate the corporate economy and incentivise corporate investment – but also expect moves to boost income for the lower paid.
How significant a departure is this from the position taken by the Treasury under George Osborne?
The most noticeable difference is likely to be one of tone and pace of change: fewer short-term grand gestures and a more considered medium-term strategy reflecting the style of the May Government. There is a wider political objective to be achieved and, whilst the final destination may be the same as Osborne’s, I expect Phillip Hammond to follow a longer path to get there.
What will UK business/industry/UK financial sector be hoping for in the Autumn Statement?
A continuation of the downward movement of Corporation Tax rates, even if not at Osborne’s pace. I also expect measures to calm corporate nerves post-Brexit and to reassure foreign markets as to the stability of the UK economy, which could prove vital ahead of what is expected to be a year of political uncertainty in continental Europe.
Do you have any further predictions?
I wouldn’t rule out some easing of fuel duty, which is a quick way to put money back into voters’ pockets. I realise I could be wishfully thinking here! Some expenditure on broadband infrastructure would be very welcome and, some would say, is long overdue to keep the UK competitive. A continued emphasis on stamping out tax evasion and a continued commitment to HMRC resourcing is almost certain.
Do you have further predictions and what should lawyers and clients be doing in preparation?
For lawyers engaged in infrastructure and construction, I think that the future could look bright. For commercial, corporate and commercial property lawyers, confidence in the markets post-Brexit would be welcome also.
However, all eyes for the next 2-3 years are likely to be principally on Brexit and the process of negotiation of the UK’s departure from the EU. Whatever the Chancellor does in respect of the UK economy in this month’s Autumn Statement, clients are going to want to understand the risks and opportunities associated with that before they make medium-term strategic decisions.
Originally published as part of an interview with LexisNexis.