This year’s Spring Statement has been released amid tension and uncertainty as Brexit negotiations reach their conclusion.
Chancellor Philip Hammond was able to offer a little insight into how the UK plans to spend and make cuts post Brexit.
However the majority of his talk was marred by the looming cloud that is the Brexit outcome and left him unable to comment on much.
The Future Of The UK’s Spending Dependent On Brexit
The Chancellor explained that the future largely hinges on the Brexit result.
Philip Hammond promised that if the UK leaves the EU with a Brexit deal in place, he will produce a 3 year spending plan before the summer recess (Usually in July).
He said that a deal in place would allow Britain to flourish.
However if the UK cannot agree smooth and orderly negotiations from the EU, then the progress that has been made to repair the UK’s economy would be at a ‘real risk’.
The Chancellor explains that there would be ‘no simple solution’ in the event of a no deal Brexit and the decision would undoubtedly impact the UK in the short/medium term.
It would also create a less prosperous economy in the long term. Hammond says that on the ground there would be “higher unemployment, lower wages and higher prices in the shops”.
Chancellor Has More To Spend Post Brexit
Thanks to a decrease in borrowing, Hammond will have £11 billion more to spend post Brexit, putting his figure at £26 billion.
In the event of No Deal this money would be spent on softening the impact.
If there is a good deal in place, this money will be spent on public services or on cutting taxes.
Other Highlights Of Spring Statement
Despite lots of uncertainty, there were some areas that the Chancellor did indicate the Government would make decision on.
Below are some highlights that business owners in particular should be aware of:
The UK’s estimated growth in 2019 has been cut to 1.2%. Previously this figure was expected to be 1.6% however revisions have been made.
Revisions of +0.2% have also been made moving forward for the years 2021 and 2022.
It is also expected that borrowing will go down, wages will go up (to at least 3% a year), and 600,000 new jobs will be created by 2023.
Low Pay Review
One big subject of focus for business owners will be a review into ‘low pay’.
It is expected that the findings in this review will have an impact on the minimum and living wages from August onwards – ultimately affecting what business owners are legally required to pay their staff.
Global Tech Tax
A review will also be issued for global tech giants like Facebook, Google and Amazon. Its findings will discover whether these type of companies are paying their fair share of tax.
The chancellor announced a new £3 billion Affordable Homes Guarantee scheme which would deliver 30,000 affordable homes.
There would also be £717 million from the Housing Infrastructure fund that would unlock 37,000 new homes in West London, Cheshire, Didcot and Cambridge.
£100 million of extra funding has been put towards tackling knife crime.
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