The scope for tinkering with financial products and services is plentiful when it comes to the Chancellor's two opportunities to make fiscal policy changes. Whilst traditionally the Autumn Statement (formerly the pre-budget report), was intended to focus more on macro-economic forecasts and departmental spending, the distinction between this and the Budget has become more nuanced. So what could we see on Wednesday, in the first Autumn Statement under Phillip Hammond?
Hammond will abandon former Chancellor George Osborne's pledge to balance the books by the end of this parliament. In essence, this means he can borrow more to mitigate the likely negative impact of Brexit. Whilst the economic impact has been far more muted than expected, volatility will return as the process of exiting the EU carries forward.
The Institute for Fiscal Studies (IFS) has said the UK public finances may well end up with a £25bn black hole by end of this current parliament, given the likelihood of slower growth and higher inflation. By moving away from Osborne's pledge, the Chancellor has thus given the Government headroom to stimulate the economy if needed, though this shouldn't be viewed as a step change away from austerity.
The Squeezed Middle has returned with a re-brand under the May Government; Hammond will focus on the JAMs during his tenure as Chancellor - the Just About Managing. We should view the measures he makes through that lens.
Two core manifesto commitments are likely to progress; we can expect to see an increasing personal tax threshold and continued movements towards a higher rate tax threshold from £43K to £50K.
A package home-building measures, including a £3 billion house building fund, were trialled at the Conservative Party conference earlier this year, which we outlined here. It is expected that Autumn Statement will be the legislative vehicle to push these measures through.
The 3% stamp duty surcharge on second homes, which was only introduced at the start of this financial year, has proved to be ineffective. HM Treasury has received around half as much as they forecast, and it has slowed the housing market notably. Whilst it was predominately intended to target buy-to-let investors, it has had the unintended consequence of catching many others in its net: parents trying to help children get onto the property ladder; holiday home purchasers; those struggling to sell their properties who have opted to let - instead of sell - on an interim basis; and those first time buyers whose partners have an existing property.
This could be an opportunity for the Chancellor to redress this particular issue, show his distinct agenda from the Osborne years, and is one that could conceivably be framed, quite conveniently, through his focus on JAMs.
ISAs seem to be "fair game" of late. One of the most traditionally well-understood products has perhaps become a little confusing for consumers, with some frequent changes over the past few years. We could see the threshold continue to increase - or even removed altogether - in this on-going low interest rate environment.