Chancellor Philip Hammond has delivered his 2019 Spring Statement to the House of Commons. A supporting Written Ministerial Statement (WMS) provides more detail on some of the announcements in the Spring Statement, and sets out details of other forthcoming government policies.
Mr Hammond opened his Statement by acknowledging that the most urgent task at present is to ‘lift the uncertainty’, but he also added a positive note, stating that the ‘economy itself is remarkably robust’.
The Chancellor indicated that if the UK does leave the EU with a deal, there will be an economic boost due to a pick-up in business confidence and investment. He said his role will be to decide how much of this ‘Deal Dividend’ the Government can prudently release, and how it would be shared between increased spending on public services, capital investment in Britain’s future prosperity and keeping taxes low, while continuing to keep debt falling.
As expected, the statement focused on the latest forecasts for the economy and the public finances provided by the government’s independent forecaster, the Office for Budget Responsibility (OBR). Growth forecasts have been revised for the current year – the Chancellor now expects growth of 1.2%, compared to the October 2017 forecast of 1.6%. Next year’s forecast remains unchanged at 1.4%, followed with 1.6% in each of the following three years.
The Chancellor reported ‘good news’ on borrowing figures – this year it will be 1.1% of GDP, £3bn lower than forecast at the Autumn 2017 Budget. He also expects that borrowing will fall from £29.3bn in 2019/20, then £21.2bn, £17.6bn, £14.4bn and finally £13.5bn in 2023/24. The expectation is that the Government remains on track to meet its fiscal target early.
Assuming a Brexit deal is agreed, the Chancellor went on to say that he will launch a ‘full three-year spending review’ before the summer break and that this in turn will ‘set departmental budgets beyond the NHS’. He said the review will ‘reflect the public’s priorities between areas like social care, local government, schools, police, defence and the environment’.
As expected, no changes to tax were announced in the Spring Statement speech itself. However, the supporting Spring Statement 2019: Written Ministerial Statement outlines thirteen consultations, draft regulations and call for evidence documents, which are due to be published immediately or over the coming months. These are summarised as follows: