Spring Statement 2019
The Spring Statement is an opportunity for the Chancellor to provide up-to-date information and progress regarding the economy since Budget 2018. We’ve picked out a few key points to highlight developments within the economy and what is useful for you to know.
Economy
Efforts to build a stronger economy have been paying off, with 9 consecutive years of economic growth for the UK, resulting in a faster growth rate than Japan, France and Italy since 2010.
The forecast: the Office for Budget Responsibility (OBR) predicts that inflation will stay on or close to the target for the duration of the forecast (until Autumn). Business investment is expected to grow compared to last year, depending on the financial certainty involved.
Employment
The UK has seen its lowest unemployment rate since 1975 with wages increasing at the fastest rate in over 10 years.
The forecast: the number of people in employment is expected to increase by 600,000 by 2023, with unemployment remaining low. Wages are also expected to increase at a faster rate than inflation, resulting in more disposable income.
Public Finances
Borrowing has reduced since 2009/10, with debt seeing its first sustained decrease in a generation. Public finances have also improved since last Autumn.
The forecast: in order to ensure debt continues to decrease, the government are focused on supporting public services, investing in the economy and infrastructure, and keeping taxes low, so as to not put pressure on future generations.
Opening the UK
Since the EU is in the very process of leaving the EU, it is important that members from other countries globally know they can visit our country without too much trouble, which will improve business with the UK.
The forecast: to ensure the UK is more ‘open’, citizens of South Korea, Singapore, Japan, Australia, New Zealand, Canada and the US will be allowed to use e-gates at airport and Eurostar terminals to reduce queues and improve the experience at the UK border – from June 2019. Landing cards will also be abolished from June 2019, reducing complications for visitors and speeding up entry.
The Environment
The commitment: the goverment will aim to meet climate targets by advancing gas supply decarbonisation through increasing the proportion of green gas in the grid. This will reduce the dependence on burning natural gas. By 2025, the government will launch the Future Homes Standard, entailing that new builds are equipped with low-carbon heating and excellent levels of energy efficiency. In an effort to protect critical habitats, the government will support the Ascension Island Council in allocating 443,000 square km of its waters as a Marine Protected Area.
Housing
The government sets out to: “Raise housing supply by the end of this Parliament to its highest level since 1970, on track to reach 300,000 a year on average.” In order to acheive this, £717 million from the Housing Infrastructure Fund will be spent to unlock up to 37,000 homes in various places including the Old Oak Common in London, Cheshire and the Oxford-Cambridge Arc. The government will also secure £3 billion of borrowing by housing associations in England to provide a further 30,000 homes.
To find out if any of these developments and Brexit will affect your business, contact us today.