On March 13th, Chancellor Philip Hammond gave his Spring Statement, which contained a few early indications of what we might expect come budget time later this year.
If you missed it, here’s our summary of the stuff you need to know and what it probably means for you.
1.Austerity is easing off, but we’re not out of the woods yet
In an interesting comparison, Hammond called himself “positively Tigger-like” and declared that the UK economy had reached a turning point, with growth forecast at 1.5% this year. This suggests– hopefully – an end to austerity in the not too distant future. In fact, Hammond hinted that an increase in public spending may be included in his Autumn Budget, which will “set an overall path for public spending for 2020 and beyond”.
However, the chancellor is still committed to “lower taxes”, whilst reducing the country’s debt. Of course, none of us are eager to have a tax hike, but if the UK isn’t increasing taxes but still continuing along the same road of debt reduction, it does suggest that a big influx in public spending and, indeed, an end to austerity, isn’t around the corner any time soon.
2.Work is underway to help tackle the housing shortage
The 2017 Autumn Budget committed £44 billion of investment over the next 5 years to deal with the housing shortage and Hammond used his Spring Statement this year to let us know that work has already started in this area. This includes releasing funds for initiatives like the Housing Growth Partnership, which provides financial backing for small homebuilders, and the building of 27,000 affordable homes in London (set to be completed by the end of 2021-22).
Hopefully, continued investment in housing will mean homeownership becomes a reality for more people in the UK, especially millennials who are often known as ‘generation rent’ because of their inability to get onto the property ladder.
3.Future improvements for local transport
The chancellor has invited cities across England to bid for money to help them deliver on “local transport priorities”. A pot of £840 million is available and cities that successfully secure some of the cash will be able to invest in improvements for their transport networks.
What does this mean for you? Well, hopefully at the very least, it may mean a smoother commute! From improved roads to better public transport, investment in the UK’s transport infrastructure can make a difference to many of us on a daily basis.
4.Plastic may be taxed
There is going to be a consultation on whether or not there should be a ‘plastic tax’ to reduce the amount of it in use. Plastic has a negative impact on the environment and Prime Minister Teresa May has previously pledged to reduce plastic waste by 2042.
In the short-term, this is likely to have a bigger impact on businesses, who will have to meet the challenge of finding ways to use more sustainable materials for their products.
5.“There’s still much to do”
Overall, the Spring Statement took on a more positive tone than usual but Hammond admitted that “there is still much to do”. Lots of this remaining work centres around supporting businesses to deliver economic growth, dealing with debt, and, of course, Brexit.