“There is a light at the end of the tunnel”, the main message from today’s Spring Statement.
Chancellor of the Exchequer, Philip Hammond, presented the Government’s Spring Statement on 13 March 2018.
He has promised that the Government will champion those who create jobs and wealth, not “demonise them”.
What is the spring statement?
- Philip Hammond provides an update on the overall health of the UK economy.
- The Spring Statement includes forecasts from the Office for Budget Responsibility (OBR).
- Informs the UK public on any progress that has been made since the Autumn Budget 2017.
- The Spring Statement encourages the public and businesses to give their views on changes that are being made by the UK Government.
What’s changed since Autumn Budget 2017?
Hammond says “substantial progress” has been made in the Brexit talks.
Philip Hammond announced that over £1.5 billion has been allocated to departments and devolved administrations in preparation for Brexit.
This spend is part of the £3 billion figure which was announced at the Autumn Budget 2017, which will be spent over two years.
Economy and fiscal forecasts
The Chancellor of the Exchequer was glad to announce that the economy continues to grow. The economy has been growing for five consecutive years, and exceeded expectations last year.
The OBR has also increased their forecast for growth this year.
Business
Moving forward, the Government say that they will “go on supporting British businesses”.
This year’s Spring Statement gives businesses a sense of stability that will help them to plan. Philip Hammond said that the Conservative Government is “the champion of entrepreneurs” and that he places to reduce business rates by “over £10 billion”.
Next business rates valuation will be brought forward to 2021, it was due in 2022. Many businesses will benefit from the change to three-year revaluations earlier, with the first taking place in 2024.
Education
After announcing that this market economy embraces talent and opportunity, Philip Hammond stated that the “Education secretary will release up to £80m for small firms to take on apprentices”. In total, he promised that £2.2 billion more will be spent on education and skills.
He believes that this investment will take public services and infrastructure “to its highest sustained level in 40 years”.
Construction
In April 2018, the £29 million construction skills fund will open for bids. This project will pay for a maximum of 20 construction skills villages around the country.
Housing
During the Spring Statement Philip Hammond revealed more about his plan to tackle the UK’s housing challenge.
It was announced during the Autumn Budget 2017 that the Government are backing an investment programme. £44 billion will be spent over the next five years.
The Chancellor of the Exchequer said that we are on track to raise the supply of homes to 300,000 a year on average by the mid-2020s.
Other key housing announcements include:
- The Government are working with 44 areas on their bids into the £4.1 billion Housing Infrastructure Fund.
- The Housing Growth Partnership, the organisation that provides financial support for small housebuilders, will be doubled to £220 million
- London will receive £1.67 billion, this will help the city to build 27,000 affordable homes by the end of 2021-22.
Technology
During the Spring Statement 2018, Philip Hammond made the first allocations of the £190 million local full fibre challenge fund which was first announced during the Autumn Budget 2018.
He confirmed that £25 million would fund the first 5G testbeds.
What’s Next?
Today the Chancellor revealed that the Autumn Budget 2018 will set an overall path for public spending for 2020 and beyond. There will also be a detailed Spending Review to take place in 2019.
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