Today marks the inaugural Spring Statement, a smaller-scale fiscal event to replace the Spring Budget.
While major tax changes were not expected in the Spring Statement, we have rounded up all the updates from today’s publication that could affect you and your business.
From the latest economy status to updates and consultations that could impact your business in the year ahead, read on for all the key takeaways from the 2018 Spring Statement.
Spring Statement at a glance
Today’s Spring Statement was, as expected, much smaller affair than the previous Autumn Budget. The Chancellor of the Exchequer, Philip Hammond, used today’s announcement to share progress since the Autumn Budget, update on consultations to take place and speak positively on the economic position of the UK. According to Hammond, there is a ‘light at the end of the tunnel’, with austerity measures set to ease in the coming years.
Progress in the economy
Hammond provided an update on the economic state of the UK, announcing that overall, growth is up and the rate of borrowing is down.
The Office for Budget Responsibility (OBR) has revised the GDP forecast for 2018 from 1.4% as announced in the Autumn Budget to 1.5%, while inflation is expected to fall back to its 2% target in the next 12 months. They have also predicted that an employment growth will mean that over 500,000 more people will be in work in 2022.
With regards to the borrowing forecast for 2017-18, the amount now stands at £45bn, which is £4bn less than the forecast in the Autumn.
There is some progress in the housing market too, with the stamp duty changes announced in the Autumn Budget resulting in 60,000 first time buyers benefitting from the cap so far.
The millennial railcards have not been quite so successful, however. So far, only 10,000 trial cards for 26-30 year olds have been released.
Updates for businesses
While there were no tax changes announced in today’s Spring Statement, Hammond did reveal a few measures and updates that will have an impact on businesses.
Firstly, the business rates revaluation has been brought forward from 2022 to 2021, with a full spending review to be held in 2019.
Hammond also announced that up to £80m will be released for small businesses to take on more apprentices in a move to boost employment growth.
The government will also be seeking advice on measures to end late payments and will be looking into the future of cash and digital payments.
For businesses and individuals currently facing poor internet connection, today’s Statement indicated that there will soon be information provided on how some of the £190m promised to improve fibre broadband access in the Autumn Budget will be spent.
Meanwhile, to ‘help the great British van driver go green’, Hammond has announced that there will be a consultation on removing the tax relief on red diesel, and tax cuts for low-emissions vans. The government will also be looking into ways of reducing the use of plastics through a consultation on a plastic waste tax.
With Brexit being an important issue facing many businesses, Hammond has announced that information will be published on how £1.5bn, part of the total £3bn set aside, for Brexit planning will be spent.
The Brexit ‘divorce bill’ is also now estimated to be £37.1bn, which will take the UK until 2064 to pay off.
With many new housing initiatives announced in the Autumn Budget to increase the housing supply, today’s Statement was used as an opportunity to provide an update.
For example, the government are currently working with 44 areas on their bids into the £4.1bn Housing Infrastructure Fund. The Housing Growth Partnership has now doubled to £220m. The government has also announced a £1.67bn fund to start building 26,000 affordable homes, including homes for social rent, by 2022.
Spring Statement 2018 – Final thoughts
Today’s Statement provided Hammond with an opportunity to share progress since the first Autumn Budget in November 2017, with the aim of positioning the UK as a ‘force for good in the world’. In the next Autumn Budget, we will ultimately discover if the government is closer to achieving these aims.