As expected, the Chancellor of the Exchequer has stuck to his promise that he would not use his Spring Statement today as a de-facto second Budget. Instead, he used his speech to provide an update on the public finances, a progress report on various commitments and consultations announced at last year’s Budget, and to launch a number of longer term reviews and consultations.
While this approach sacrifices the opportunity to make a significant splash in the media and political narrative, it may be welcome to many businesses looking for more certainty and predictability in tax and spend decisions. It also provides a useful temporary shield for the Chancellor to resist the growing calls for increased spending and investment across a range of areas.
The speech was topped and tailed with optimistic rhetoric about the trajectory of the UK economy but there were no big immediate policy developments. A modest improvement in the public finances was hailed as pointing to ‘light at the end of the tunnel’ but Hammond coupled this with cautious language about the need to protect against future shocks and uncertainties. He implied that, should this positive trend continue, there may be scope for spending and investment increases at the Budget but nothing specific was promised.
However, what did accompany today’s speech was more than a dozen consultations on a wide variety of issues from niche and technical through to broad and forward looking. A number of these consultations signal an interesting direction of travel in several policy areas, or are intended to seek further information ahead of future tax and spend announcements.
A wide-ranging call for evidence on the issue of single use plastics continues the Government’s drive to burnish its environmental credentials The Chancellor emphasised that it would look at the whole supply chain and consider ‘how the tax system can help drive the technological progress and behavioural change’. This scope will have potential implications for a very broad range of businesses and other stakeholders.
Also in the category of wide-ranging is a consultation on cash and digital payments in the new economy. Access to cash has become a hot political topic in recent months but this consultation goes further and invites views on the future of digital payments, the future role of cash, tax evasion and money laundering. As the UK economy becomes increasingly digitised in almost all sectors, this represents a significant sweep of issues that will touch many stakeholders. It is certainly an area to watch as we approach the Budget later this year and beyond.
Elsewhere, there was more detail on how money previously promised at the 2017 Budget was to be allocated (for example for Brexit preparations and broadband roll out), a modest £80m to support SMEs taking on apprentices (though it is not clear whether this is new money or not) and a brief reference to the Industrial Strategy.
Ultimately though, this Spring Statement will not live long in the memory, and that is just as its author appears to have intended.