Welcome to the 2018 Spring Statement Newsletter from Beatons Group
Chancellor heralds the ‘light at the end of the tunnel’
Chancellor Philip Hammond has presented his first Spring Statement, with something of a spring in his step.
Responding to the latest economic forecasts from the Office for Budget Responsibility, Mr Hammond revealed that the economy is expected to grow at the slightly faster rate of 1.5% in 2018.
Debt and borrowing have been revised downwards, and inflation is also predicted to fall back down to the Bank of England’s 2% target over the coming 12 months. The Chancellor suggested that the UK’s public finances have reached a ‘turning point’.
While openly challenging his own reputation as a pessimist, the Chancellor rejected calls to ease the squeeze on spending, asserting that UK debt remains ‘too high’ and heralding the government’s ‘balanced approach’. However, he did pave the way for potential increases in public spending from 2020 onwards, revealing plans for a detailed Spending Review in 2019.
Mr Hammond also used the Spring Statement to report on the progress made on a number of the measures announced at the Autumn Budget.
Having previously announced that business rates revaluations will take place more frequently, the Chancellor has now brought forward the next revaluation by a year, to 2021. He also revealed that an estimated 60,000 people have so far benefitted from the stamp duty land tax exemption introduced for first-time buyers in the Autumn Budget.
With Brexit negotiations ongoing, the Chancellor confirmed that over £1.5bn has been allocated to departments and devolved administrations in preparation for the UK’s exit from the EU. He also announced the first allocation of funding from the Challenge Fund, which will provide money to support the roll out of full-fibre broadband to 13 areas of the UK.
The Chancellor also committed more than £500m a year to support the new post-16 T-Levels, with £50m a month being made available to help employers prepare for T-Level work placements.
Turning to future changes to the tax system, the Chancellor launched consultations on a number of key areas, including the impact of the VAT registration threshold on small businesses, tackling single-use plastic waste, and new incentives to encourage the ‘great British white van driver’ to go green.
For a detailed overview of the 2018 Spring Statement and what the measures mean for you and your business, visit our Spring Statement summary
WHAT THEY SAID
‘I am pleased to report to the House on a UK economy that has grown in every year since 2010.’
Chancellor Philip Hammond
‘Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while refusing to lift a finger as councils go bust and the NHS and social care are in crisis.’
John McDonnell, Shadow Chancellor
‘Businesses will be encouraged by the Chancellor’s report on the UK’s fiscal health . . . yet as deficit and debt levels improve, the Chancellor must resist calls to pour money into politically-attractive, short-term spending priorities.'
Dr Adam Marshall, Director General of the British Chambers of Commerce
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