Four things you must know about Spring Statement

Four things you must know about Spring Statement

Chancellor Philip Hammond used his second Spring Statement to insist the economy is sound and can improve – so long as there is a Brexit deal.

He kicked off his Spring Statement more than 15 minutes later than he promised with claims the UK economy continues to grow, wages are increasing and unemployment is at historic lows.

The man referred to as Spreadsheet Phil claimed these factors provided a solid foundation on which to build Britain’s economic future after it exits the European Union.

He forecast borrowing and debt would be less in every year moving forward than at last year’s Budget and set out further investments in infrastructure, technology, housing, skills, and clean growth.

Here are the four key things you need to know about what was announced in today's Spring Statement:

1) Further growth

The Office for Budget Responsibility (OBR) forecast further growth every year for the next five years. Wages were forecast to continue growing faster than inflation.

2) Future workforce

Mr Hammond updated apprenticeship reforms announced at the Budget.

From April 1 employers will see the co-investment rate they pay cut by a half from 10 per cent to 5 per cent, at the same time as levy-paying employers are able to share more levy funds across their supply chains, with the maximum amount rising from 10 per cent to 25 per cent.

But Andy Timpson, partner at Blick Rothenberg, said this only addressed one part of the issue with apprenticeships.

He said: "A relaxation in the criteria, particularly the 20 per cent off-site learning, would be more attractive and will enable the benefits of the apprenticeship levy regime to be realised."

The government also appointed Professor Arindajit Dube to undertake a review of the latest international evidence on minimum wages, to inform future National Living Wage policy after 2020.

3) Housing

The government committed to using £717m from the £5.5bn Housing Infrastructure Fund to unlock up to 37,000 homes at sites including Old Oak Common in London, the Oxford-Cambridge Arc, and Cheshire.

Through the Affordable Homes Guarantee Scheme, the government announced it will guarantee up to £3bn of borrowing by housing associations in England to support delivery of around 30,000 affordable homes.

Iain McKenzie, chief executive of The Guild of Property Professionals, said ultimately though the Spring Statement didn’t deliver much for the property market, which was expected given the lack of stability in the political arena and the no-deal Commons vote later today (March 13). 

He said: "What is needed are measures to improve consumer confidence as the fundamental issue that is holding the housing market back is Brexit and poor sentiment as a result, particularly evident in London and the south east."

4) Spending review

The chancellor confirmed that the government will hold a spending review, which will conclude alongside the Budget.

This will set departmental budgets, including three-year budgets for resource spending on things such as social care, but again with the caveat "if an EU exit deal is agreed."