Autumn Statement 2016 – Hammond pulls no rabbit out of the hat for Financial Services
As Philip Hammond’s first (and now last) Autumn Statement and the first fiscal event since the EU referendum, the financial services industry has been waiting with baited breath to hear just how the Government may or may not have changed its budgetary ambitions. To be honest, for the financial services industry there were very few unwelcomed surprises…no “rabbit out of the hat” as we have seen in the most recent statements. For many in the sector, clarity, some stability and a *little* certainty (for now…) will be welcomed news.
One of the relevant announcements for the sector coming out of Hammond’s innovation and productivity themes was the £400m for the British Business Bank to invest in fintech firms, and the commission of an annual ‘State of UK FinTech’ report on key metrics for investors. This a sign that the Government is beginning to take alternative finance seriously and meet the need for business growth and the need for investors to invest in a different way.
Across the wider financial services backdrop, we saw disappointment for the insurance industry, with a rise of insurance premium tax from 10% to 12% which will push up the cost of home and car cover. And for once, the pensions industry cheered as it was left largely untouched. Pension cold-callers will be targeted and penalised, whilst there has been a new NSI bond to launch next year which will offer 2.2% gross rate over a three year term. Though, we will have to wait and see if the government meets commitments to protect budgets for the pension "triple lock" until the end of this Parliament.
And a silver lining for the banks, with the Government to continue “considering” bank taxation, taking into account the implications of the UK leaving the EU.
So with a focus on growing innovation in fintech, keeping the banks sweet (for now) and safeguarding (some) personal finances – the financial services industry can breathe a muted sigh of relief and wait to see what lies in store for Hammond’s next fiscal announcement in autumn 2017.
By Vivi McDuell