George Osborne is delivering his Autumn Statement on Wednesday, 3rd December. In advance, we thought we’d highlight a few things that our readers may want to look out for. LeasePlan UK’s Managing Director, Matt Dyer, offers his own thoughts at the bottom of this post.
Extra spending on roads.
This is the big one. Osborne has already announced that this Autumn Statement will contain a ‘five year road plan’, and he’s been travelling around the country to determine which areas need it most. The figure that’s been put forward – £15 billion, will be spent in the next Parliament and Osborne has said that funding will come from cuts elsewhere. But this still needs confirming, just at it needs confirming that this is actually new spending. There’s also the question of where and how this money should be spent. Will central government expend it on the strategic roads network, or will it go towards local authorities for the smaller but more numerous routes that they maintain?
More money specifically for potholes.
This could just be wrapped up in the extra spending on road renovation, but Osborne could separate it out so that it gets more attention. That would certainly fit in with this year’s Budget, delivered in March, where the Chancellor announced extra funds for councils to deal with potholes. His advisers now see this as a particularly popular way of spending money. There’s an argument – previously spelt out by us – that cutting or freezing fuel duty was expensive to the Exchequer, but didn’t have a great political return. Efforts to tackle potholes are more likely to be noticed by motorists.
HS3.
The interim report on a new high-speed rail line, connecting various cities in the North, is set to be published next March. It’s unlikely that Osborne will fill in any of the fiscal details until then, but not totally impossible. He sees this as a great way of appealing to Northern voters, so it could come up in his speech. Or will he just, for now, concentrate his ‘road plan’ on the North?
HS2.
As the transport speeches during conference season showed, HS2 still dominates the transport debate. All of the main parties are behind it, but it will be worth seeing whether any of them use this Autumn Statement to row back slightly, or whether there are any new spending forecasts that redouble the original commitment.
Business taxation.
More generally, there are signs that any business tax cuts will be focussed on smaller businesses – particularly on business rates.
Company car tax.
One of the motifs of this Autumn Statement will be the slow pace of deficit reduction. On the one hand, the Chancellor hasn’t got as far as he once expected. On the other, with an election approaching, he’s preparing various spending commitments and tax cuts. This means he needs money badly. Most of this will come from welfare cuts after the next election. But will he also go against what he’s previously indicated, and raise some taxes too? If so, it’s worth noting that he’s often seen company car drivers as an easy source of revenue: the last Budget went ahead with a 2 per cent increase in BIK tax for 2017-18 and 2018-19, although it did also improve discounts for low emission cars. Or will he relent and postpone these increases?
Matthew Dyer, Managing Director LeasePlan UK comments:
“George Osborne should steer clear of company cars. He’s already hit them again and again, with BIK rates set to increase by two per cent in each of the next four years. That’s a harsh way to treat some of the businessmen and women who are helping the economy to recover. In fact, now that growth has returned, it might be time to pay them back.”
Please return to this site on 3rd December, for coverage of what Osborne actually revealed in his statement.
