Hammond has said that the UK must “seize the opportunities” from Brexit while tackling deep-seated economic challenges “head on”.
The chancellor has also promised to invest to make Britain “fit for the future” as an “outward looking, free-trading nation” once it leaves the EU in 2019.
Hammond says the economy “continues to grow, continues to create more jobs than ever before and continues to confound those who talk it down”, claiming “the future will be full of opportunities”.
Productivity and wage growth
The Office for Budget Responsibility (OBR) forecasts another 600,000 people in work by 2020, but statistics show that productivity has still not improved. For the last 15 budget events, the OBR has forecast productivity growth at two per cent.
Therefore growth estimates have been revised down, with new figures predicting a 1.5 per cent growth for 2017, rising to a 1.6 per cent growth by 2022.
Hammond also promised a rise of 4.4 per cent in the National Living Wage to £7.83 per hour from April 2018.
Rhian Radia, partner and head of employment at London law firm Hodge Jones & Allen:
“Raising the living wage was always going to be a relatively painless way for the Government to claim that it is delivering on its pledge to protect the most vulnerable in society. Business often complains about such increases, but the reality is that these are absorbed with minimal fuss. They also tend to hit industries that are least reliant on inward investment, so such a move can be made without discouraging companies from investing in R&D or new plants in the UK, which is a key plank of the Government’s post-Brexit strategy.”
Public sector debt still remains a huge issue in the UK, with government costs outweighing more than has been raised in tax. In 2016-2016, the rate of public sector debt was £1.7 trillion, the equivalent to £65,000 per household in the UK.
The Government has extended the off-payroll IR35 rules ito level the field between the public and private sector workers, which will inevitably lead to a significant increase in labour costs.
£75 million will go into bringing the UK up to speed with AI as the government hopes to support start-ups and increase the number of PhD students to 200 each year.
£36 million will go into digital skills courses that include the use of AI in an effort to retrain workers as traditional jobs become automated.
Further tech job investments
In the opening of his speech, Hammond claimed that ‘the world is on a brink of a technological revolution’, but that ‘we choose to run towards change, not to run from it.’
He went on to announce a £100 million for an additional 8,000 qualified computer science teacher jobs with a dedicated National Centre for Computing being set up, as well as £76 million to boost digital and construction jobs and skills.
While Brexit has already inflated tech prices and seen a 50 per cent decrease in foreign applicants taking up UK-based tech jobs, Hammond is sending a clear message to Silicon Valley as he is to make sizeable investments in the tech sector.
Self-driving car industry boom
Hammond has announced some post-Brexit regulatory reforms that will change how the autonomous vehicle industry works in the UK, seeing self-driving cars on our roads in as little as three years and with a long-term aim to be on Britain’s roads by 2021.
These reforms mean that the government has forecasted that the industry will create 27,000 jobs and be worth £28 billion to the British economy by 2035.