The Chancellor’s narrative focused on providing a strong and stable platform for the UK as it begins negotiations for leaving the EU. His focus on ensuring strong public finances and investing in skills and innovation to tackle the UK’s productivity challenges underlines this point.
Hammond was keen to reiterate this is a government delivering for ‘ordinary working families’ and committed to fairness. The Chancellor targeted his tax rises on areas he believes benefit the better off, by removing anomalies in NICs for the self-employed and reducing the tax free dividend allowance.
These measures allow for increased funding for the NHS and social care, and additional measures to mitigate the impact of business rates revaluation on small businesses. Introducing ‘returnships’ to support people back into employment after career breaks is also symbolic of the Prime Minister’s pledge to help ordinary working families.
The Chancellor had already made clear that a recent uptick in tax revenues, lower than expected public borrowing this year and higher economic growth figures would not lead to a giveaway in the Budget. With constraints over where cuts could be made, tax rises were inevitable. The prospect of rising inflation and increasing debt repayments also presented a challenge.
Little from this final Spring Budget statement looks set to stand out as truly game changing – in many ways this was more tinkering rather than wholesale change. A new Autumn Budget later this year of course offers him a second chance.