Everything you need to know about Philip Hammond’s Spring Statement

For someone who likes to play it low-key, Chancellor Philip Hammond couldn’t really have chosen a better day to deliver his Spring Statement. Parliament is engaged in a bitter battle about how to respond to an attempted murder by Moscow – or a rogue Russian organisation – and the White House is in turmoil after the President fired his Foreign Secretary over social media. If Philip Hammond had come to the despatch box nude (perish the thought), his slightly upgraded projections for growth still probably wouldn’t have made the front page.

So, just in case you missed it, here are the key points from today’s Spring Statement:

On the Economy:

The Office for Budget Responsibility has upgraded its forecast for GDP growth this year to 1.5 per cent, having put the forecast at 1.4 per cent in November. The forecasts for GDP growth in 2019 and 2020 have been left unchanged at 1.3 per cent, with 2021 and 2022 edging up to 1.4 per cent and 1.5 per cent respectively. Inflation is expected to fall back to the 2 per cent target in the next 12 months and employment to grow over the next five years.

On public finances:

Borrowing is expected to come in at £45.2 billion this year – £4.7 billion lower than previously forecast. It is expected to fall to £37.1 billion in 2019, falling each year until it hits £21.4 billion in 2022/23.

Debt is forecast to fall as a share of GDP from 2018-19 and the OBR has revised down debt and borrowing in every year. It will peak at 85.6 per cent of GDP in 2017-18, then fall to 85.5 per cent in 2018-19, 85.1 per cent, 82.1 per cent, 78.3 per cent and finally 77.9 per cent in 2022-23.

On business:

There will be a revaluation of business rates in 2021, a year earlier than expected. Subsequent revaluations will take place every three years.

On tax relief:

There will be a consultation on changes to entrepreneurs’ relief to make sure that it doesn’t give entrepreneurs a disincentive to seek external finance.

On Brexit:

The government will allocate £1.5 billion for government departments to prepare for Brexit.

On plastic:

The government will launch a consultation on a tax to cut down on single-use plastic waste. Universities and businesses will be given £20 million from existing budgets to research ways to reduce the impact of plastics on the environment.

On investment:

There will be a consultation on creating a fund structure within the enterprise investment scheme for digital startups.

On productivity:

There will be help provided for the least productive companies to learn from the most productive.

On digital tax:

The government will consider solutions to ensure that digital giants such as Google and Facebook pay their fair share of tax.

Conclusion:

This was a political statement rather than an economic one. The Chancellor has a reputation for being a politician with not much of an ear for politics, and is unpopular among both his Brexiteer colleagues (for obvious reasons), and among many free marketeers who believe that some of his spending decisions verge on Milliband lite.

It was them – and not the country – he was speaking to today when he reiterated his Budget promise of putting aside 1.5 billion for Brexit, and them he was speaking to when he repeatedly mentioned the benefits of fiscal conservatism. He attacked Labour’s big spending policies as a ‘train wreck’, and even sounded somewhat more passionate than usual about the market economy.

Overall, his tone was positive and “practically tiggerish” – an attempt to dispel his reputation for being “an Eeyore” – and he delivered okay if not great news on growth forecasts with the sort of smug flourish we haven’t seen since the Osborne days.

Policy wise, big announcements were thin on the ground, but that was to be expected as the Chancellor explained in the autumn that all announcements will now be made in the budget.

As a last hurrah to spring statements, the 26 minute speech wasn’t much to write home about, but thanks to some good news from the OBR, Hammond managed to hold his own. And he flattened his Labour opposite number John McDonnell, when the shadow chancellor spoke of “Tory bully boys.” McDonnell has still not apologised to Esther McVey, Work and Pensions Secretary, for repeating remarks suggesting she should be “lynched,” Hammond pointed out, making McDonnell squirm.