In his first Spring Statement since moving the annual UK Budget to November, Chancellor Philip Hammond has delivered an optimistic forecast for the UK’s economy over the next five years.
Mr Hammond said that the UK economy has seen growth in every year since 2010, added 3 million jobs with higher employment across the UK and had reduced income inequality to lower levels than under the last Labour government.
Rejecting the opposition’s “doom and gloom” Mr Hammond said that the Office for Budget Responsibility (OBR) figures showed that there was now “light at the end of the tunnel” for the UK fiscally. The Chancellor said that the OBR had forecast growth in jobs and real wages as well as shrinking of the UK’s debt.
OBR figures have shown that the economy had grown by 1.7 percent in 2017, up from the 1.5 percent forecast in the Budget. At the same time, GDP forecasts to 2023 are now up on previous OBR estimates whilst inflation is set to fall back to target and real wage growth is now expected from 2019.
Mr Hammond said that debt and borrowing has been revised down by the OBR with it peaking at 85.6 percent this year, then falling to 77.9 percent in 2022-23.
The Chancellor went on to say that he was committed to tackling the challenges in the housing market and announced that 44 local authorities had utilised the £1.4 billion housing fund with 225,000 new homes set to be built in the West Midlands whilst London will receive an additional £1.7 billion to deliver 26,000 more new affordable homes to bring the total to 116,000 by 2021/22.
Among a number of tax consultations launched, HMRC has called for views on potential changes to Entrepreneurs’ Relief to ensure that it does not discourage entrepreneurs from seeking external finance for their companies. Mr Hammond also said the Government would look at how the UK tax system can be adapted to change behaviours for the benefit of the environment.
Mr Hammond said that the Government was “keeping taxes low and building a Britain fit for the future” and that “we are delivering on our plan with a balanced approach.”
In response, the Shadow Chancellor, John McDonnell, said Mr Hammond had yet again ignored key workers such as nurses, doctors and police officers just as the Government had done so for the last eight years.
Mr McDonnell added that “we were never all in this together, as they claimed” and that the Government was “setting up the country to fail.”
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