Spring Statement 2019 – what you need to know
Chancellor Philip Hammond’s Spring Statement
Coming on a day when parliament was set to vote on whether to rule out a ‘no deal’ Brexit, it comes as little surprise that Chancellor Philip Hammond’s Spring Statement received little fanfare. After all, he did promise a fiscal ‘non-event’.
People who were paying attention wondered how far his announcements would be shaped by Brexit. The more cynical among them reckoned he would take the opportunity to slip through some unpalatable announcements while the media’s main focus was elsewhere.
In the event, the Chancellor didn’t take the chance to slip through bad news. However, he was insistent that the continuing uncertainty over Brexit was casting a shadow over the economy – with a no-deal Brexit certain to make the economy smaller.
Whether the Brexit situation meant that the Chancellor held back any announcements, we don’t know – but there was little that will have an immediate impact on your personal or business finances.
Late payments and apprentices
Of most interest to small and medium sized businesses was an announcement regarding late payments. Upcoming rules will require audit committees to report on a company’s payment practices and report on them.
Additionally, the Chancellor’s reforms to help small business take on more apprentices – already announced in the autumn budget – will be brought forward to April this year.
Most of the announcements regarding the technology sector were either very general or highly specific. The Competition and Markets Authority will begin a study of the digital advertising market, while £79 million will be invested in the ARCHER2 supercomputer at Edinburgh University, £45 million will be ploughed into genomics research at the European Bioinformatics Institute and £81 million will go on an Extreme Photonics Centre.
The bigger picture
For the rest, much of the Spring Statement focused on the bigger picture. The chancellor pointed to GDP growth forecasts of 1.2% this year, rising to 1.6% for 2021 to 2023. The Office for Budget Responsibility expects 600,000 new jobs to be created by 2023 with wages growing at 3% or higher during the period. Borrowing is also expected to fall from £29.3 billion in the coming financial year to £13.5bn in 2024/4. But for all this, Mr Hammond warned that economic progress will be at risk if there is a no-deal Brexit.
Again, the news regarding housing was at a structural level. A £3 billion Affordable Homes Guarantee will help support 30,000 affordable homes while £717 million from the Housing Infrastructure Fund will be targeted at specific areas, including West London, Cheshire and Cambridge.
A number of the chancellor’s remaining announcements concerned the environment, with measures to achieve a carbon neutral economy – including help for small businesses to cut emissions and to end the heating of homes with fossil fuels by 2025. With regard to crime, £100 million will go to police forces to help combat knife crime a fund new Violent Crime Reduction Units. Pupils at secondary schools will benefit from free sanitary products.
All in all, the Chancellor’s prediction that the Spring Statement would be a ‘non-event’ was largely borne out. But with the Office for Budget Responsibility confirming that he has over £26 billion of extra spending power he could deploy if a no-deal Brexit comes off the table, it seems we’ll have to wait for more substantial announcements that could benefit our personal or business finances.
If you’re feeling troubled by any of the Spring Statement 2019 announcements or are looking for help with your accounts give your local THP branch a call to see how we can help, with offices in Chelmsford, Cheam, Saffron Walden, Wanstead and London City.