The Chancellor Philip Hammond has today delivered his Spring Statement 2019 on the state of the UK economy, reporting that the “economy itself is remarkably robust”.
In his short speech to the House of Commons, Hammond outlined the Government’s assessment of the UK economy and budget, responding to the revised forecasts from the Office for Budget Responsibility (OBR), also published today.
Key areas of the Spring Statement 2019
The Chancellor advised that he has cut growth for this year, now expecting 1.2% compared to October’s forecast of 1.6%. Next year’s forecast is unchanged at 1.4%, but then for the final three years he expects 1.6% each year.
Philip Hammond reports good news on borrowing figures, this year it will be 1.1% of GDP, £3bn lower than forecast at the Autumn Budget.
Hammond believes the government remains on track to meet its fiscal target early.
“Looking forward, borrowing will fall from £29.3bn in 2019-20, then £21.2bn, £17.6bn, £14.4bn and finally £13.5bn in 2023-24 – its lowest level in 22 years,” he says.
£3bn pledge towards affordable homes
As part of his Spring Statement, £3bn has been pledged by the Chancellor towards an “Affordable Homes Guarantee scheme”, aimed at supporting the delivery of around 30,000 affordable homes.
£37bn investment in national productivity
Philip Hammond says the government’s £37bn National Productivity Investment Fund will help boost productivity – with the UK’s productivity issue being cited as holding back growth.
Mr Hammond says the fund – previously announced – represents “the largest ever investment in England’s strategic roads; the biggest rail investment programme since Victorian times; and a strategy for delivering a nationwide full fibre network by 2033.”
Secondary schools and colleges to get free sanitary products
Philip Hammond says the government will fund the provision of free sanitary products from the next school year after schools have complained some children are missing school due to a lack of sanitary products. “I have decided to fund the provision of free sanitary products in secondary schools and colleges in England from the next school year.”
Rules for digital firms
A six month review of the tech sector published earlier today concluded tech giants like Facebook and Google should face greater competition.
The review was led by Barack Obama’s former economic advisor, Jason Furman.
“We need to adapt our regulatory environment to ensure competition works for consumers in the digital market place, as it does in the real market place. So I asked Jason Furman, Barack Obama’s former Chief Economist, to review competition in the digital market.
Hammond says as a “first step towards implementing reforms”, he will ask the Competition and Markets Authority to undertake a market study of the digital advertising market as soon as possible.
“The UK will remain a great place to do digital business… …but it will be a place where successful global tech giants pay their fair share… …where competition policy works in consumers’ interests… …and where the public are protected from online harms,” he says.
The chancellor says that assuming a Brexit deal is agreed and uncertainty lifted he will launch a “full three-year spending review” before the summer break. “I intend to launch a full three-year Spending Review before the summer recess, to be concluded alongside an Autumn Budget.”
He says the review will “reflect the public’s priorities between areas like social care, local government, schools, police, defence and the environment.”
The chancellor says he is confident that MPs will eventually agree a Brexit deal. “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,” he says.
Police given £100m immediately to tackle knife crime in the UK
The chancellor says the government will make available immediately to police forces in England an additional £100m over the course of the next year. Philip Hammond describes the recent surge in knife crime as a “personal tragedy for the scores of families of victims”.
“We will make available immediately to police forces in England an additional £100m over the course of the next year, ring-fenced to pay for additional overtime targeted on knife crime.”
The fund will be ring-fenced to pay for additional overtime targeted specifically on knife crime and to fund new Violent Crime Reduction Units to deliver a wider cross-agency response to this epidemic, he says.