Hoping to be luckier than the date would suggest; on the 13th of this month, Chancellor Philip Hammond set out new forecasts for economic growth, within the Spring Statement. With Brexit so close on the horizon, for many, the Spring Statement slipped past unnoticed, however, even before the words remain and leave divided the country, the projections have been termed a ‘fiscal non-event’, in comparison to The Annual Budget. This can be a mistake however, with this year being no exception, as budgetary commitments are pushed through and reflections are made on past promises.
This year, the Chancellor focused on three key areas; technology, emergency services funding and the environment, although he did make sure to stress that delays to Brexit were putting any plans in a precarious position.
Taking a sly dig at the opposition, Hammond noted that “despite the constant attempts from the Opposition front bench to talk down the remarkable achievements on jobs…last year 96% of new jobs were full-time.” However, Andy Verity, BBC Economics Correspondent, says this could soon drop and we will have to wait to see “if Brexit uncertainty has hit the job market of not.”
A lot of the focus of the Chancellors speech focused on what he felt were key successes from the previous year, including that borrowing this year is anticipated to be 1.1% of GDP, 3 billion lower than forecast in the Autumn Budget. Hammond also made the bold projection that borrowing will have fallen to £13.5 billion in 2023-2024, however estimates have been wrong in the past, so those holding onto this as solid fact could be disappointed.
A little closer in the future are the announced income tax cuts for more than 30 million people, which will be delivered within 3 weeks’ time. A move which is said to “overwhelmingly benefit richer households”. Within a similar timeframe will come investments into infrastructure, skills, technology and housing, including, from the £37 billion National Productivity Investment Fund; investment in England’s strategic roads, investment in rail and a strategy for delivering a nationwide full fibre network by 2023.
An announcement was also made regarding the Borderlands Growth deal, that a £260 million investment will be given, likely a welcome relief for South Scotland Labour MSP, Colin Smyth, who earlier this year wrote, “The five Borderlands local authorities met the deadline set to them by David Mundell to submit proposals for a Borderlands Growth Deal last year. Despite meeting this deadline, the UK and Scottish Government have not committed a single penny to the Growth Deal.”
£7 billion has been committed to science and innovation, which will go towards projects like ARCHER2, a supercomputer to be hosted at Edinburgh University, the JET nuclear fusion reactor, and the new Extreme Photonics Centre in Oxfordshire. The European Bioinformatics Institute will receive £45 million from the NPIF.
Probably closer to most people’s hearts are concerns about housing and the rise in prices, which the Chancellor addressed briefly, promising a £3 billion Affordable Homes Guarantee scheme, a £1 billion Enable Build SME guarantee fund already announced at Budget, and £717 million from the Housing Infrastructure Fund to unlock up to 37,000 new homes.
Hoping to keep those homes safe, police funding is due to rise by up to £970 million from April, and blowing his own trumpet somewhat, the Chancellor stated that, “the Prime Minister and I have decided, exceptionally, to make available immediately to police forces in England and Wales an additional £100 million”, ear-marked to target knife crime.
Money has also been set aside for the NHS, a big issue for the British public, particularly in this climate. To support the long-term plan for the NHS £34 billion of additional funding will be made available, money the Chancellor says will go towards improving cancer and mental healthcare, transforming GP services and more doctors and nurses.
This Spring Statement has been termed “much easier for Philip Hammond than many expected”, possibly because, under the shroud of Brexit, even The Annual Budget would struggle to get a look in. However, it does hold some power and for some may even be a positive to guide them through the coming months.