Autumn Statement

Beautiful yellow and red autumn leaves background texture

The UK Chancellor of the Exchequer, Philip Hammond, delivered his first and last Autumn Statement on Wednesday.  He closed his presentation with the announcement that there will now be just one budget per year “in line with best practice” … and as recommended by august multilateral agencies such as the International Monetary Fund.

The content had been extensively hinted at in the preceding couple of days by the Prime Minister herself and by carefully choreographed teasers submitted by Whitehall.  So there was no real surprise that the debt is ‘eyewatering’ to use Mr Hammond’s own term [1] but perhaps a sharp intake of breath when he revealed that it was expected to peak at 90% of GDP next year thanks to the borrowing programme that is required to finance the high value investments he plans in infrastructure and innovation.

£2.3 billion will be channelled to unlocking land for building 100,000 new homes in areas of high demand.  This almost certainly refers to building on the Green Belt, a highly controversial scheme discussed in a previous Rockfire article.   Shale gas extraction was highlighted as a key element of the ‘smarter energy infrastructure’ envisaged over the next 15 years but no mention was made of renewable alternatives whose costs are plummeting.

There were a couple of concessions to the green economy, with £390 million destined to support ultra-low emission vehicles and renewable fuels.  But as Rockfire Founder and CEO, Liam Kavanagh commented:

“It’s good to hear that low-emission vehicles will be receiving £390m and I was also pleased at the support for digital signaling for the rail sector, however, I am a little disappointed that the main beneficiaries of this statement have been fossil fuels and car drivers. Increasing availability of charging for electric cars is all very good but the biggest challenge is making sure the energy used is as green as the cars. These measures are a drop in the ocean compared with what is actually required.”

[1]   Eye-watering debt and Brexit are tying my hands, chancellor warns