Philip Hammond has delivered his first budget as Chancellor of the Exchequer, though it may be his last, as he plans to shake up the current budget announcement system.

Delivering the Autumn Statement on Wednesday, Hammond said June’s Brexit vote will “Change the course of Britain’s history,” and accelerate the need to “ tackle our economy’s long-term weaknesses.”

He revealed that the government’s Office for Budgetary Responsibility has downgraded growth forecasts for the next year, and expects inflation to rise. Expert commentators have said the fallout from Brexit, trade gap and weakness of sterling will lead to increases in food prices in the UK in the coming months.

The chancellor also revealed that the government has abandoned plans to aim for a budget surplus (keeping spending lower than the income from taxes) by 2019.

Of the few announcements in the budget that will interest farmers, one is another freeze in fuel duty; this tax has been held down for seven consecutive years now.

There will be a 30p increase in the National Living Wage (the minimum wage for workers aged over 25, not to be confused with the independently estimated Living Wage), bringing the lowest wages up to £7.50 an hour from April next year.

The National Minimum Wage will also increase:

• for 21 to 24 year olds – from £6.95 per hour to £7.05
• for 18 to 20 year olds – from £5.55 per hour to £5.60
• for 16 to 17 year olds – from £4.00 per hour to £4.05
• for apprentices – from £3.40 per hour to £3.50

The threshold for income tax payments will be raised from its current rate of £11,000, meaning people earning under £11,500 a year will not have to pay income tax from 2017, and the bracket for higher tax rate will be increased from £43,000 to £45,000.

The government has promised to develop a National Productivity Investment Fund to provide £23 billion of additional spending for transport, digital communications and research, and plans an additional £1bn investment in full-fibre broadband and 5G mobile communications networks. Hammond said this will go towards ensuring the UK economy is “fit for the future,” but the broadband improvements could see the digital divide between urban and hard to reach rural areas widening, without intervention to stop this.

On Wednesday, landowner’s association the CLA criticised the Chancellor’s address for its focus on urban areas. President Ross Murray said, “It is hard to see from this Statement how rural business fits in to the Chancellors’ vision for Britain’s economic future. The investments announced today are overwhelmingly targeted at improving facilities within, and connections between, our cities. We understand why this is important but it must not be done at the expense of opportunities to support the rural economy.”

Murray criticised the communications technology announcements in particular, saying these are “Overly focused on giving city based homes and businesses access to… hyperfast broadband,” and complaining, “There is little comfort in this for rural people still struggling to get minimum connection speeds. Connecting the ‘final 5%’ of rural communities and businesses must remain the priority until the job is done.”

Reacting to the announcement, NFU policy director Andrew Clark said there is little in the budget that will benefit farm businesses, which he said is “disappointing”, though he acknowledged that “There are some positives measures.”
 
Clark said, “The Chancellor’s planned reduction to the rate of Corporation Tax, while providing benefits to the supply chain, does little to help the majority of farm businesses that are unincorporated. Farm businesses need to be able to retain and invest profits in infrastructure and equipment to improve their productivity and the tax system needs to recognise and support this, as it does other parts of the economy.”
 
Commenting on the new Investment Fund, he said, “Although the Chancellor has announced a new National Productivity Investment Fund that will add £23 billion in higher value investment over the next five years, including a £2 billion investment in research and development, it is not clear where this will be spent. The Government must continue its support of the Agri-Tech Strategy and this new investment simply must include the agri-food sector.
 
“British farming will need a strong and functioning research and development pipeline to deliver solutions to both increase productivity and deliver environmental goods. To achieve this ambition to be at the cutting edge of science and technology, the whole country must be digitally connected and be able to utilise technology.”
 
He continued, “We note the announcement of £700 million into full-fibre connections and 5G. We are eager to see what this will deliver for the remaining 5% unable to access adequate digital infrastructure at the moment – many of whom are in rural areas.”

In his speech, Philip Hammond also said the government would stop letting agents charging fees to renters, crack down on pension scams, and put £2.3 billion into a new fund for housing.