Spring Statement 2018 - Our Thoughts

Dated: 13 March 2018 Author: Adam Longmore, Tax Director

Adam Longmore gives his comments on the Spring Statement.

"This Spring statement felt like a departure from previous years when the interim statement has been used as a mini budget. Instead, this statement really was the ‘short update’ that the chancellor suggested it would be and leaves fiscal changes for the ‘real budget’ in the Autumn.

There were announcements regarding an increase to the National Living wage and support for small businesses to engage with apprentices, but very little else of substance. Instead, the statement unveiled a series of consultations on future policies which will no doubt influence tax changes in the Autumn Budget. Business is shouting out for stability and certainty to help boost and drive the UK economy forward and, whilst we did not expect many announcements in this statement, we will be looking forward to the ‘real budget’ to provide the support required.

Overall there were no surprises, no major changes and the statement provided us with an upbeat message on the economic outlook for the UK. Behind the speech however the growth forecasts show that the UK economy is set to achieve low-key growth for some time. This lack of growth will mean the chancellor has limited wriggle room this Autumn to open the tap for public spending without raising additional tax revenues or achieving savings elsewhere.

We couldn’t have a statement that didn’t mention Brexit and the OBR confirmed the final amount the UK expects to pay to ‘divorce’ from the EU as £37.1bn.  Interestingly the final amount wont be paid in full until 2064 and it is therefore likely that ongoing Brexit related uncertainties will dominate and influence budget decisions for some time."

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