On Wednesday 13th March, Chancellor Philip Hammond introduced the first Spring Statement in Britain, in which he unveiled upgraded projections from growth while predicting falling inflation, debt and borrowing.
The Spring Statement, introduced by the Chancellor in 2016, gives an update on the overall shape of the British economy and the OBR forecasts, gives an update on progress since the Autumn Budget, while it also invites businesses and people to give their opinion on changes the government is considering.
Major tax or spending changes are now made once a year in the Autumn Budget, and this has not gone down well with certain figures from politics. John McDonnell, Labour's shadow secretary said, “Does the Chancellor really believe the NHS can wait another eight months for the lifesaving funds it needs? How many people have to die waiting in an ambulance before he acts?”
McDonnell also raised concerns regarding funding for the emergency services, local councils, as well as schools. He said “austerity was a political choice and not an economic necessity”, and “we were never all in this together as they claimed”.
In his 26-minute long speech at the House of Commons, the chancellor said that the growth in 2018 was forecast from 1.4% to 1.5% by the Office for Budget Responsibility (OBR). The forecast for 2019 and 2020 remains unchanged at 1.3%.
The Chancellor spoke on public spending, the housing market, Brexit and many more issues. In terms of business, he announced that the Government would bring forward the evaluation of business rates and will “champion those who create jobs and wealth, not demonise them”.
Hammond also stated that £80 million of funding will be released to support small businesses and enterprises to engage with apprentices, as well as £50 million extra support for the introduction of new technical qualifications called T-levels.
According to the OBR, Britain's annual payment, although “small” to the EU, as per the divorce bill, it will continue until 2064. The Chancellor also said that the Brexit financial settlement is expected to be £37.1 billion.
Seema Malhotra MP for Feltham and Heston has been critical of the Spring Statement. She said, “The OBR stated that they 'still have no meaningful basis for predicting a precise outcome'. We are on the verge of the biggest change to our economic and social fabric in 70 years and the Government have yet to inform the Parliament or the public on how they will pay for it – but we do know that we will be paying the ‘divorce bill’ until 2064. Households are now over £600 worse off since the referendum, according to a study by The National Institute of Economic and Social Research, and we are yet to leave the EU. ONS figures have shown that real wages are lower now than in 2010 and have fallen for the last 9 months, productivity is at the worst level the Napoleonic era, we have an epidemic crisis in social care and more than 400,000 more children live in poverty than 5 years ago across the UK according to the Joseph Rowntree Foundation, with wards in my constituency having up to 40% child poverty. Local Councils are at breaking point due to the Tories cuts, the Local Government Association warned that local government will face a £5.8bn funding gap even after seven years of austerity.”
According to the Leader of the Liberal Democrats, Vince Cable believes, “The Spring Statement was a non-event. The OECD gave us the clearer picture – that the economy is bumping along the bottom of the G20, well behind the likes of Australia, Canada and the Euro area. The OBR's fresh forecasts are still a long way behind the figures estimated in March 2016 before the EU referendum. It is time the government was honest with the public: there will need to be tax increases to pay for the NHS and social care, police and schools.”