Chancellor Philip Hammond presented his second Spring Statement to the House of Commons on 13 March 2019, alongside the publication of the Office for Budget Responsibility’s updated forecasts for growth and borrowing.
Below, are the key points he delivered in his speech. To view the full speech, please click the following link.
The government claim their efforts to build a stronger, fairer economy are paying off and that the economy remains resilient, and is forecast to continue growing:
Ensuring people have the skills that employers need is vital to creating the workforce of the future. The Budget set out steps to equip people with the skills to succeed in the modern economy, and today the Chancellor announced:
Making Tax Digital(MTD) – Mandatory digital record keeping for VAT for businesses over the VAT threshold (with turnover over £85,000) comes into force from 1 April. This is an important first step in this modernisation of the tax system to which the government remains committed. The government can confirm a light touch approach to penalties in the first year of implementation. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued. The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020.Today the government will publish:
Since 2010, the government has: secured and protected over £200 billion of tax that would otherwise have gone unpaid; introduced over 100 measures to reduce avoidance, evasion and other forms of non-compliance; and continued to support taxpayers to get their tax right. Today the government will publish:
The Government's Budget 2018, included significant additional support for cutting-edge science and technologies that they claim will transform the economy, create highly skilled jobs, and boost living standards across the UK. Today the Chancellor:
As the UK leaves the EU, the Government said it is vital that the world knows the UK is open for business and attractive to international visitors. At the Spring Statement is was announced that:
The government said it is determined to fix the broken housing market. They went on to say, building more homes in the right places, is critical to unlocking productivity growth and makes housing more affordable. At Autumn Budget 2017, the government set out a comprehensive package of new policies, to raise housing supply by the end of this Parliament to its highest level since 1970, on track to reach 300,000 a year on average. The Spring Statement set out further steps to deliver this ambition:
The Budget 2018 set out how the government is accelerating the shift to a clean economy, building on the Industrial Strategy, Clean Growth Strategy, and 25 Year Environment Plan. The Spring Statement builds on this commitment:
"We have huge opportunities ahead of us: Our Capital is the world’s financial centre; Our Universities are global powerhouses of discovery and innovation; Our businesses are at the cutting edge of the tech revolution; And we have shown that we are not shy, as a nation, of the tasks that lie ahead: We are addressing the environmental challenges that threaten our planet; We are building the homes that the next generation desperately need.
We are investing in our future, tackling the productivity gap and embracing technological change, rising to its challenges and seizing its opportunities. Our potential is clear, our advantages are manifest. We are the fifth largest economy in the world. A proud, successful, outward-looking nation, with no limit to our ambition and no boundaries to what we can achieve. A brighter future is within our grasp."
"Let me thank the Chancellor for providing me with an early sight of his statement – no matter how heavily redacted. We have just witnessed a display by the Chancellor of this government’s toxic mix of callous, brutal complacency over austerity and its grotesque incompetence over the handling of Brexit.
Whilst teachers are having to pay for the materials their pupils need; working parents are struggling to manage as schools close early and their children are sent home. 5,000 of our fellow citizens will be sleeping in the cold and wet on our streets tonight. Young people being stabbed to death in rising numbers. And, the Chancellor turns up today to threaten us that austerity can only end if we accept a bad Brexit deal. Let’s look at some of the Chancellor’s claims.
The Chancellor has boasted about the OBR forecast of 1.2% growth this year. What he hasn’t mentioned is that the forecast has been downgraded from 1.6% – downgrading forecasts is a pattern under this Chancellor. In November 2016, forecasts for the following year were downgraded from 2.2% to 1.4%. In autumn 2017, forecasts for the following year were downgraded from 1.6% to 1.4%." Read full statement here
"Against this backdrop, the focus of the Spending Review and Autumn budget later this year must be on fixing the fundamentals here at home from productivity and skills, to digital and physical infrastructure, to enable businesses to drive UK economic activity through Brexit and beyond.”
“Against a hugely uncertain political backdrop the Chancellor has made an admirable attempt to set out a long-term vision for the UK economy, yet remains shackled by Brexit. This year’s forecast downgrade brings the danger of no deal to the UK economy sharply into view. It must be avoided. Meanwhile, space must be found for the UK’s domestic agenda. Standing still while the world continues to turn is not an option.
The Chancellor’s rightly identified the need to go further and faster in combating climate change. His ambition for all new homes to be heated sustainably will ensure we make better progress towards a zero-carbon economy. Prompt payment practices are good for businesses throughout the supply chain, so if reporting encourages better behaviour from firms that should be welcomed.
However, going it alone on a digital services tax is high risk, especially at a time when the UK already looks increasingly isolated. The EU has dropped their plans and got behind the OECD’s efforts - the UK should follow suit. The government needs to be doing all it can to encourage investment in the UK and adoption of new technologies, not putting up barriers.”
“In all honesty, today’s Spring Statement will barely register with most business leaders, as Brexit uncertainty continues to cast a shadow over their organisations. Warm words and proposed consultations are not enough for businesses at a time when confidence is rock bottom and investment plans are eroding away, and many will find it difficult to tread water until more decisive action at the Autumn Budget.
While a ‘no deal’ would wreak certain havoc for many firms, we must also avoid being lulled into thinking an exit deal alone is a substitute for providing a real economic impetus that lowers costs, spurs productivity growth, and supports businesses as they adjust to Brexit, whatever its form. Indeed, the fact that the OBR lowered its forecast for GDP growth this year – based on a smooth exit from the EU – highlights just how much the economy is set to fall below its potential, even in a relatively benign scenario.
On the upside public finances are in rude health, but the Chancellor missed a vital opportunity to outline more clearly how this might be used to build a positive long-term economic vision for businesses to get behind. Today has turned out to be even more of a non-event than anticipated, and it is yet further evidence of how the Brexit process is sapping the momentum from our domestic economic policy agenda.”