The chancellor’s next Autumn Statement on November 22 will be very much influenced by what’s come before and what’s coming next.
Looking backwards, there’s the spring Budget announcements, plus the extensive set of proposals announced around July’s Mansion House speech.
Ahead, of course, is a looming general election with the spring Budget likely to be the last opportunity for big announcements to wow voters.
Tax, inflation and state pensions
After last year’s "mini"-Budget debacle, there’s a strong need to demonstrably reflect the latest government borrowing and economic outlook figures from the Office for Budget Responsibility. Tax revenues, the cost of government borrowing and progress towards inflation targets will all feature strongly.
The big question is, will there be any movement on taxes?
Income tax rate cuts would be most eye-catching, but unfreezing thresholds could potentially be more beneficial for lower earners.
Other possibilities are reductions in inheritance tax rates or more relief for businesses. But if you were the chancellor, wouldn’t you prefer to keep these up your sleeve for your pre-election spring Budget?
The state of the nation’s finances will also have a bearing on the state pension triple lock decision for next April.
Will the government honour this in full, granting an 8.5 per cent increase, or might they take the risk of alienating state pensioners by massaging this down to say 7.8 per cent, arguing that NHS bonuses distorted this year’s figures?
The Mansion House compact
I fully expect the chancellor to include next steps around encouraging defined contribution pension schemes to invest more in private equity.
Some providers, including Aegon UK, have already signed up to the Mansion House compact, committing to invest 5 per cent of workplace default funds in private equity by 2030, provided that’s in members’ interests.
I expect an update on the proposed value for money framework for DC pensions, which will shift the focus from charges to improving value for members, including through seeking out new investment opportunities such as private equity.
We may also hear more on the extension of collective defined contribution pensions, which are likely to invest with a longer time horizon, again making private asset investments more likely.
The Mansion House pack also included extending pension freedoms to members of trust-based schemes as well as plans to deal with numerous small deferred pension pots.
The Department for Work and Pensions' own assessment shows that some of these initiatives have a much bigger impact on member outcomes than others, with separate reforms to extend auto-enrolment far more beneficial to members.
Similarly, some are more likely than others to encourage private equity investment. I do hope this is reflected in a prioritised approach, with the extension of AE number one, rather than risking a chaotic attempt to implement all at once.
