Spring Statement 2019

Today saw the Chancellor, Philip Hammond, deliver the Spring Statement. It was expected by many to be a quieter statement with the lack of concrete progress towards Brexit; there were however a few points worth noting.

The Chancellor told the House of Commons that the economy is “remarkably robust” even though the growth prediction has been cut to 1.2% from 1.6% by the OBR, as predicted in the Autumn Budget. The cut, which is the weakest growth rate since 2009, is primarily attributed to the uncertainty around Brexit. 

The UK is building a strong foundation, the growth in the labour market being one sign of this. 600,000 new jobs are expected to be created by 2023.  The national minimum wage will be raised to £8.21 from April 2019, and with wages forecast to grow faster than inflation - this means more money in people's pockets for lower earners.  

A recent review of the global tech giants concluded that they should face greater competition and Philip Hammond has asked the Competitions and Marketing Authority to produce a market study of the digital advertising market in a bid to secure a fair share in the United Kingdom. He referred to this as the “first step towards implementing reforms”.

He moved on to announce a call for evidence to understand how best to help the UK’s least productive businesses and enable them to learn from and catch up with the most productive. Similarly, he announced a call for evidence to better understand the continuing scourge of late payments (something small business have been asking for), citing the Conservative Party are “champions of small businesses”.

The announcement was welcomed by the Federation of Small Businesses, with a statement from the National Chairman, Mike Cherry, saying Poor payment practices by big businesses towards their smaller suppliers are rife and pernicious, leading to the closure of 50,000 small firms a year." There is no doubt in the long run that this is a positive step for small businesses, as with many announcements such as this we have to wait and see what is produced and how it will be implemented. 

As part of the clean growth strategy to help smaller businesses reduce their energy bills and carbon emissions, the government is launching a call for evidence on a business energy efficiency scheme to explore how it can support investment in energy efficiency measures.

Overall, a positive statement, with strong economic growth predicted, many new jobs and raised national minimum wage, global tech giants to face greater competition and a better understanding behind the continuing late payment scourge affecting so many smaller business. It is clear that with Brexit up in the air there will be an element of uncertainty hanging over us and the economy - we can only hope things settle down soon.

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