Short and to the point. What else could the Chancellor do with so much political and structural uncertainty surrounding this statement?
He said that the UK economy continues to grow, with wages increasing and unemployment at historic lows, providing a solid foundation on which to build Britain’s economic future.
With borrowing and debt both forecast to be lower in every year than at last year’s Budget, the Chancellor set out further investments in infrastructure, technology, housing, skills, and clean growth, so that the UK can capitalise on the post-EU exit opportunities that lie ahead.
Here are the key points:
- Growth forecast cut for 2019 to 1.2%
- UK will grow 1.4% in 2020, as previously forecast
- Chancellor to chair roundtable on minimum wage on productivity
- Borrowing to be £3bn less than forecast
- £37bn National Productivity Fund
- Landing paper cards to be ended for visitors from some countries
- £3bn for affordable homes
- end of fossil-fuel heating systems in all new houses from 2025
- Free sanitary products in schools in England next year
- Audit committees to review late payments
- Chancellor says no deal Brexit short-term hit to the economy
- UK to cut tariffs in no-deal Brexit
The Chancellor also confirmed that the Government will hold a spending review which will conclude alongside the Budget. We had expected much more on this now, but political uncertainty has dictated otherwise! This will set departmental budgets, including 3-year budgets for resource spending, if an EU exit deal is agreed. Ahead of that the Chancellor announced extra funding to tackle serious violence and knife crime, with £100 million available to police forces in the worst affected areas in England and Wales.
The Spring Statement is an opportunity for the Chancellor to update on the overall health of the economy and the Office for Budget Responsibility’s (OBR) forecasts for the growth and the public finances. He also updates on progress made since Autumn Budget 2018, and launches consultations on possible future changes for the public and business to comment on. The Spring Statement doesn’t include major tax or spending changes – these are made once a year at the Autumn Budget.
Tech and the new economy
Budget 2018 included significant additional support for cutting-edge science and technologies that will transform the economy, create highly-skilled jobs, and boost living standards across the UK. Today the Chancellor:
• welcomed the Furman review, an independent review of competition in the digital economy, which has found that tech giants have become increasingly dominant. The Chancellor announced that the government will respond later in the year to the review’s calls to update competition rules for the digital age – to open the market up and increase choice and innovation for consumers
• has written to the Competition and Markets Authority (CMA) asking them to carry out a market study of the digital advertising market as soon as is possible. This was a recommendation of the Furman Review
• committed to funding the Joint European Torus programme in Oxfordshire as a wholly UK asset in the event the Commission does not renew the contract, giving the world-leading experts working at the facility certainty to continue their ground-breaking fusion energy research
• invested £81 million in Extreme Photonics (state-of-the-art laser technology) at the UK’s cutting-edge facility in Oxfordshire
• boosted the UK’s genomics industry with £45 million for Bioinformatics research in Cambridge
• announced £79 million funding for a new supercomputer in Edinburgh – five times faster than existing capabilities – whose processing power will contribute to discoveries in medicine, climate science and aerospace, and build on previous British breakthroughs including targeted treatments for arthritis and HIV
• research institutes and innovating businesses will benefit from an exemption for PhD-level occupations from the cap on high-skilled visas from this autumn. Overseas research activity will also count as residence in the UK for the purpose of applying for settlement, meaning researchers will no longer be unfairly penalised for time spent overseas conducting vital fieldwork