Basically, the Spring Budget has been replaced with a Spring Statement, and the official budget has been moved to autumn – which has cleverly been named the Autumn Budget. Pretty simple!
Unlike the Autumn Budget, no major announcements or changes are made in the Spring Statement – instead it’s there to respond to financial forecasts made by the Office for Budget Responsibility on things like economic growth and borrowing and provide some updates on how the funding from the Autumn Budget is being allocated.
As Chancellor Philip Hammond summed up: (opens in a new window) “No other major economy makes hundreds of tax changes twice a year, and neither should we”.
What did the Spring Statement cover this year?
As expected, the statement covered major economic forecasts such as GDP (Gross Domestic Product) and government borrowing. Economic growth is improving at 1.5% (0.1% higher than forecast), UK productivity is better and we're actually borrowing less than expected.
In the statement, Mr Hammond revealed he is at his “most positively Tigger-like” (we assume he means Pooh Bear’s friend) and that there is “light at the end of the tunnel” for the British economy. He has a predicted current surplus for 2018-19, which contradicts the Office for Budget Responsibility’s forecast at the end of 2017 (opens in a new window), which found that economy growth had slowed and that GDP growth was weaker than expected. The OBR stands by its predictions for sluggish growth, however.
Small to medium enterprise
There may be challenges for business (particularly SMEs), with an initiative planned for the most productive businesses to knowledge-share with the least productive. Although a consultation on how to end late payments for firms – and develop digital payments - could help with that.
The OBR also reduced their borrowing forecast at the end of 2017 by £4.7 billion, and in the Spring statement, Mr Hammond revealed that borrowing was nearly 1% lower than predicted in November. This is expected to keep falling year on year.
A main topic that was discussed was the environment – from wanting to help van drivers become greener by reducing taxes for vans with lower pollution levels to a possible tax on single-use plastic (a “litter levy” similar to the carrier bag charge).
As this is just a statement, there will be no major changes as yet, but it could spell good news for our oceans and green spaces.
So what does this all mean for you?
Unlike the Autumn Budget, no major tax changes were put into place so the statement itself won’t directly affect how much tax you’re paying or how much funding the services you use are getting. If you’re someone who’s not yet being paid the living wage, your pay should increase from 1st April to £7.83 an hour (as was promised during the Autumn 2017 budget).
Otherwise, certain initiatives that were set out in the Autumn budget are also starting to filter through, such as various government training schemes and research grants.
This blog is a bit of fun and not intended to influence your decisions in any way. The content of the blog is reliable at the time of publishing, but we can’t guarantee that it is neither error nor omission free, beyond our knowledge. The links are there for you to explore if you wish, but we don’t have any connection with the third party sites, nor responsibility for them or their content.