A ‘Tiggerish’ Chancellor Philip Hammond delivered a Spring Statement with few surprises on Wednesday.
The good news, he told a packed House of Commons, was that inflation and borrowing are on the way down while economic growth was better than expected and employment figures are on the way up. Economic growth for 2018 will be 1.5%, better than forecast, although it will fall to 1.3% for both 2019 and 2020. Inflation is set to fall to 2% by the end of this year.
Chancellor Hammond confirmed that in 2018-2019, day-to-day spending will be in surplus – debt will peak at 85.6% this year, then falling to 77.9% in 2022-23.
Borrowing as a percentage of GDP is also set to fall – the Office of Budget Responsibility (OBR) has revised its borrowing forecast down from £49.9bn to £45.2bn for 2017/18. He described this as a “turning point in the nation’s recovery” from the financial crisis of 2008.
Other highlights include:
- The National Living Wage to rise to £7.83 from April 1 2018.
- £80 million to be allocated to supporting small businesses wishing to engage an apprentice.
- From next month, £50 million will be released to help develop the ‘T level’ qualification.
- A consultation will be launched over the possible reduction of Vehicle Excise Duty for the ‘greenest’ of vans.
- The government is to examine ways to help small businesses deal with late payments, which the Chancellor described as a ‘scourge’.
- Government to consult on a new VAT collection mechanism for online payments.
- The next business rates valuation will be brought forward to 2021, from 2022.
- Supporting people to get the skills they need, the government is seeking views on extending the current tax relief to support self-employed people and employees when they fund their own training.