The Chancellor has presented his Spring Statement to Parliament – here’s our summary of what he said.
The UK economy continues to grow, with wages increasing and unemployment at historic lows, providing a solid foundation on which to build Britain’s economic future.
Borrowing and debt are both forecast to be lower in every year than at last year’s Budget.
- Forecast for borrowing to be £3bn lower in 2018-19 than forecast at the autumn budget
- Borrowing forecast to be £29.3bn in 2019-20, then £21.2bn in 2020-21, £17.6bn in 2021-22, £14.4bn in 2022-23 and £13.5bn in 2023-24
Phillip Hammond says this is provided we avoid leaving without a deal and provided Labour does not come to power. The UK has “genuine and sustainable choices about its future”.
- Debt is forecast to be 82.2% of GDP in 2019-20
- Debt as a share of GDP is forecast to fall to 79% in 2020-21, 74.9% in 2021-22, 74% in 2022-23 and finally 73 % in 2023-24
- Forecast of 1.2% growth for 2019.
The Chancellor set out further investments in infrastructure, technology, housing, skills and clean growth, so that the UK can capitalise on the post-EU exit opportunities that lie ahead. More detailed information on all these points can be found in our website summary here.
Tech and the new economy
Phillip Hammond says the government will make technology companies “pay their fair share” and protect consumers from online harm.
“This government will lead the world in delivering a digital economy that works for everyone.”
- He has written to the Competition and Markets Authority (CMA) asking them to carry out a market study of the digital advertising market as soon as is possible.
Open and competitive UK
As the UK leaves the EU, it is vital that the world knows the UK is open for business and attractive to international visitors. Hammond announced that:
- From June the Government will begin to abolish the need for paper landing cards at UK points of entry, including airports and Eurostar terminals, for countries including the US, Australia, Canada, South Korea and Japan
- PhD level roles will be completely exempt from visa caps
To help smaller businesses reduce their energy bills and carbon emissions, the Government is launching a call for evidence on a “Business Energy Efficiency” scheme to explore how it can support investment in energy efficiency measures.
Education and skills
Ensuring people have the skills that employers need is vital to creating the workforce of the future. The Chancellor announced:
- Updates to apprenticeship reforms that mean from April 1st employers will see the co-investment rate they pay cut by a half from 10% to 5%. At the same time levy-paying employers are able to share more levy funds across their supply chains, with the maximum amount rising from 10% to 25%
- The government has appointed Professor Arindajit Dube to undertake a review of the latest international evidence on minimum wages, to inform future National Living Wage policy after 2020
- The Chancellor says he can provide £3bn in funding to help deliver 30,000 affordable homes
- He also says there is £1bn for small and medium-sized builders of homes and £117m from the housing infrastructure fund to unlock up to 37,000 new homes in Cheshire, London, Didcot and Cambridge
The Chancellor also confirmed that the Government will hold a spending review which will conclude alongside the Budget. This will set departmental budgets, including 3 year budgets for resource spending, if an EU exit deal is agreed.
The Chancellor issued a final direct message to parliament that building a stronger country was only possible by avoiding no-deal Brexit. So watch this space! With the uncertainty over Brexit there may well be an Emergency Budget in the weeks to come.
Click here to read our detailed full summary of the Spring Statement 2018
If you would like to discuss any of this further then please get in touch 0116 2423400 or email@example.com