Spring Statement AT A GLANCE: The message, the rabbits, the economy
3 min read
Everything you need to know about the latest big fiscal announcement by Chancellor Philip Hammond.
The message
The message from Philip Hammond today was simple: Back a Brexit deal and spending on public services will increase.
The Chancellor said preventing a no-deal Brexit would trigger a “deal dividend” that would see an influx of investment and unlock cash reserves held back to cope with a bumpy EU departure. He said such a dividend would offer the country “real choices” in the upcoming spending review, which the Chancellor said would stretch over three years.
He warned MPs: “The progress we have made will be at risk if we cannot secure a smooth and orderly exit from the EU and a transition to a new partnership that protects the complex trading relationships businesses have built up over 45 years and on which so many British jobs depend.
“I hoped we would do that last night, but I am confident that we, as a House, will do it over the coming weeks. Leaving with no deal would mean significant disruption in the short- and medium-term and a smaller, less prosperous economy in the long-term, than if we leave with a deal.
“Higher unemployment; lower wages; higher prices in the shops. That is not what the British people voted for in June 2016.”
Rabbits out of hats
Reports in recent weeks that Hammond would not be pulling any rabbits out of any hats were not far off the mark. The Chancellor had little to say beyond a list of research proposals and consultations, or small-scale individual projects. But there were a couple of things that piqued interest.
- £100m funding package for police to tackle knife crime. Hammond said the emergency cash would be made available immediately and ringfenced to pay for additional overtime to tackle knife crime and new violent crime reduction units. He said: “We must and we will stamp this menace out.”
- Funding for free sanitary products in secondary schools and colleges. This measure is a major win for campaigners who says some girls are missing school because they cannot afford sanitary products.
- A crackdown on late payments to small businesses. Hammond said firms will have to declare their payment practices in their annual accounts, with more action to follow
Other measures
There were a number of other small measures announced. Here is a smattering…
- A £3bn affordable homes guarantee scheme to support delivery of 30,000 affordable homes
- From June 2019 citizens of United States, Australia, New Zealand, Canada, Japan, Singapore and South Korea will be able to use e-gates at UK airports and UK ports of entry.
- Following consultation, the Government will launch a comprehensive global review of the link between biodiversity and economic growth.
- Introduced a 'Future Homes Standard' mandating the end of fossil fuel heating systems in all new houses from 2025.
Economic picture
The state of the economy laid out by the Chancellor was patchy - with apparent sunlight coming in the near future. Growth for this year was downgraded compared with the figure announced at the October budget by 0.4 percentage points, but will stay broadly the same as the previous forecast in the coming years. Meanwhile, figures for borrowing were improved compared to the previous forecast.
GROWTH FIGURES
2019: 1.2%
2020: 1.4%
2021: 1.6%
2022: 1.6%
2023: 1.6%
Here were the figures in October
2019: 1.6%
2020: 1.4%
2021: 1.4%
2022: 1.5%
2023: 1.6%
BORROWING FIGURES
2019/20: £29.3bn
2020/21: £21.2bn
2021/22: £17.6bn
2022/23: £14.4bn
2023/24: £13.5bn
Here were the figures in October
2019/20: £31.8bn
2020/21: £26.7bn
2021/22: £23.8bn
2022/23: £20.8bn
2023/24: £19.8bn
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