K E Y P O I N T S
Philip Hammond has announced the UK economy is growing faster than predicted in November and there was ‘light at the end of the tunnel’.
The chancellor said the economy grew by 1.7% in 2017, compared to the 1.5% forecast at the Budget.
The Office for Budget Responsibility (OBR) has revised up its growth forecast for 2018 from 1.4% to 1.5%.
But Labour’s John McDonnell attacked the ‘complacency’ of the government. ‘We have in every public service, a crisis on as scale we have never seen before,’ he said.
The shadow chancellor said changes to benefits due to come in next month will leave “11 million families worse off” and warned that the “harshest cuts” would fall on disabled people.
Borrowing is now forecast to be £45.2bn this year, £4.7bn lower than forecast in November. And £108bn lower than in 2010.
The Chancellor said he will increase public spending if public finances improve.
He added the government will be able to run a small current surplus in 2018-2019.
The OBR expects inflation to return to its 2% target over the next 12 months.
The forecast predicts 500,000 more people will be in work by 2022.
The government’s national living wage will rise to £7.83 per hour from next month.
Hammond revealed over £1.5bn of Brexit preparation funding for 2018-19 has now been allocated.
The government will bring forward the next business rates revaluation to 2021.
A consultation will be launched on how to tackle the use of single-use plastics.
The statement used to be a mini-Budget, but Hammond decided to downgrade the occasion and not use it to announce tax and spending measures.
S N A P V E R D I C T
FromPaul Waugh, HuffPost Politics Executive Editor
When the voters deprived Theresa May of a majority in last year’s general election, Philip Hammond famously said “I’m not deaf” to public concerns on things like public sector pay and seven years of austerity. Since then, he’s shown a remarkable political tin ear (‘there are no unemployed’ and disabled workers are linked to dire UK productivity).
In today’s stripped down Spring Statement, the Chancellor announced various consultations that seemed designed to say ‘I hear you’. But there’s a big difference between hearing and genuinely listening and there was a lack of commitment on NHS pay, let alone long term health and social care funding. There was a ‘jam tomorrow’ promise of ‘further increases’ of spending that could kick in from next year, and projections of real wage rises, but that may reassure few struggling today.
The statement began not with a bang but a whimper (there wasn’t even a cheer from his own backbenches). It ended with more noise, but little light. So why did the Chancellor decline the chance to make tax and spending changes that could shift the dial for his party? One suspicion is this is a Government that has simply run out of ideas. The other is that it is distracted by Brexit.
Hammond said (twice) there’s “light at the end of the tunnel” of austerity. His and Theresa May’s main task now is to ensure that Brexit doesn’t lengthen that tunnel. He revealed he would release £1.5bn for Brexit preparations, a figure Labour is bound to contrast to the smaller amounts for the NHS.
Today’s statement was just 26 minutes long, but the clock is ticking ever louder on the countdown to our exit from the EU next March. Hammond felt like he was just buying time for a government on the ropes. And it’s not clear that he’s really listened to voters’, and to his own MPs’, concerns. On that, to quote his boss, it looks like ‘nothing has changed’.
O P P O S I T I O N R E A C T I O N
H A M M O N D’ S J O K E S
Philip Hammond, known ironically as ‘Box Office Phil’ for his dry interview style, wheeled out a couple of jokes in his statement.
He told John McDonnell: “I won’t be producing a Red Book today, but of course I can’t speak for the Rt. Hon. Gentlemen opposite.”
The shadow chancellor famously once threw Mao’s Little Red Book at George Osborne.
Hammond said of reports he is known as ‘Eeyore’. “If there are any Eeyores in this Chamber, they are over there. I, meanwhile, am at my most positively Tigger-like.”
The chancellor also poked fun at the Culture Secretary for having launched his own phone app.
“Our tech sector is attracting skills and capital from the four corners of the earth. With a new tech business being founded somewhere in the UK every hour. Producing world-class apps like TransferWise, CityMapper….and Matt Hancock.”