Chancellor Philip Hammond had pledged no big fiscal announcements in the run-up to his Spring Statement – and he was true to his word.
He started and finished with words of warning about Brexit, saying the uncertainty was “damaging the economy and reputation” of the UK. He said: “Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal.
“Higher unemployment, lower wages, higher prices in the shops. That is not what the British people voted for in June 2016.”
There was, however, potentially good news for the UK’s small businesses when he announced plans to tackle the scourge of late payments to small businesses. The Chancellor said large companies would be required to carry out an audit to review their payment practices and publish the findings in their annual report.
Hammond was bullish on the prospects for the UK economy, saying the economy remains robust and has “defied expectations”. He said the UK’s economy had been growing for nine years in a row – and it’s expected to keep growing for the next five years.
As expected, the Chancellor said the growth forecast for 2019 has been cut significantly, to just 1.2% from 1.6% in the last Budget. Despite this, Hammond predicted the UK will create another 600,000 new jobs by 2023.
Borrowing this year will be 1.1% of GDP – £3 billion lower than forecast at the Autumn Budget in 2018. This means Hammond’s ‘war chest’ has grown to £26.6bn, up from around £15bn. In light of this, the Chancellor said he will launch a three-year spending review before the summer recess, to be ready for the next Budget.
He also announced an update to the apprenticeship deal. From 1 April, employers will see the co-investment rate they pay cut by half, from 10% to 5%. At the same time as levy-paying employers will be able to share more levy funds across their supply chains, with the maximum amount rising from 10% to 25%.
Other highlights include:
- A review of the work of the Low Pay Commission to be conducted later in the year.
- The Competition and Markets Authority Digital to carry out a study of the UK’s digital advertising market. Hammond also hinted at new powers to protect consumers and signalled the government’s determination to make “global tech giants pay their share” of tax.
- On housing, Hammond announced a £3bn ‘affordable homes guarantee’ scheme.
- Initiatives to help small business cut carbon emissions and reduce energy bills.
- Free sanitary products to be provided in schools and colleges from the next academic year.
- To tackle knife crime, an extra £100m allocated to police forces.
- A global review of links between biodiversity and economic growth.