Of interest to all members
Summary of key points
Overshadowed somewhat by the previous night’s defeated Meaningful Vote 2 and the no-deal Brexit vote that was due to take place some few hours later, Chancellor Phillip Hammond opened the Spring Statement with “a cloud of uncertainty hangs over the economy and lifting that cloud is our main priority”. Warning that ‘No deal’ Brexit would significantly disrupt the economy in the short and medium term, and will result in a smaller economy in the long term, it was not all gloom and doom. He pointed out that, for the time being at least, “… the economy remains fundamentally robust.” Here’s what else he had to say:
- There have been nine consecutive years of growth, and the OBR has forecast further growth every year for the next five years
- The OBR revised its wage growth up to at least 3% each year and forecasts 600,000 new jobs by 2023
- Borrowing will be 1.1% of GDP in 2019, £3 billion lower than predicted in the Autumn Budget
- £37 billion announced for the National Productivity Investment Fund, which would be spent on infrastructure, skills, technology and housing
- £700 million in funding to be brought forward to help SMEs take on apprentices
- the National Minimum Wage (NMW) has increased by £2750 since 2010, and will be on track to equal 60% of the median wage by 2020, the aim being to end low pay in the UK
- £79 million announced for ARCHER2, a new supercomputer to be hosted at Edinburgh University
- A further £260 million announced for the Borderland Growth Deal. This is on top of the £102 million announced for the Carlisle Southern Link Road and means up to £362 million of UK Government investment into the Borderlands area
- A new £3 billion Affordable Homes Guarantee scheme, to support the delivery of around 30,000 affordable homes, with new houses built to have low-carbon heating and greater fuel efficiency
- An additional £100 million for the police forces in England Wales over the course of the next year, ring-fenced to tackle knife crime
- A future home standard will mandate the end of fossil fuel heating from 2025
- Further attention will be paid to the scourge of late payments on small businesses – companies’ audit committees will be required to review and report on payment practices in their report & accounts (further details to be announced by the business secretary).
If a Brexit deal is agreed within the next few weeks, the Chancellor committed to:
- A 3-year spending review, to be completed before Summer Recess, and
- A resetting of departmental budgets as a result of this spending review.
Commenting in a press statement yesterday on the new requirement for companies to report on payment practices, ICSA Policy and Research Director Peter Swabey said: “We will be interested to see the full details of this measure when announced by the business secretary as this is an important extension to the existing reporting obligation. It will increase the focus on payment practices and, particularly, performance at board level.”
