This update highlights key issues in the Chancellor’s is Spring Statement 13 March 2019.
The Spring Statement does not include major tax or spending changes – these are made in the Budget (usually in the autumn).
With UK economic growth now at its lowest for 10 years, forecast growth for 2019 has fallen from 1.6% to 1.2%.
The NHS budget has already been set for the next 5 years.
Once Brexit is over (ideally by the summer) the Chancellor plans to carry out a 3 year government-wide spending review. This will include social care funds which will have direct effect on the NHS.
In the meantime the police are to be allocated £100m to help deal with the surge in knife crime.
The Chancellor has warned that a disorderly Brexit will cause a significant disruption to economic activity in the short term. He has hinted that there could be an extra £26.6 billion to spend if MPs vote to leave the EU with a deal.
Pay and Employment
With record high levels of employment and low level of unemployment, wages are increasing at their fastest for over a decade and are forecast to continue growing faster than inflation.
Professor Arindajit Dube of the University of Massachusetts has been appointed to review international evidence on minimum wages to inform National Living Wage Policy after 2020.
From 1 April 2019 employers will see the co-investment rate they pay cut by half from 10% to 5%.
Levy-paying employers will also be able to share more levy funds across their supply chains – up from 10% to 25%.
PhD-level occupations will be exempt from the high-skilled visas cap from this autumn. Overseas research e.g. necessary field work will now count as residence in the UK for the purpose of applying for settlement.
Infrastructure and Tech Investment
Oxford and Cambridge areas will benefit from new investment e.g. fully funding the Oxford Torus Project into fusion energy, £81 million to in Extreme Photonics (laser technology) in Oxfordshire, £45 million for Bioinformatics research in Cambridge and £445 million from the Housing Infrastructure Fund for 22,000 homes in the Oxford-Cambridge Arc.
£260 million for the Borderlands Growth Deal on top of the £102 million announced recently for Carlisle from the Housing Infrastructure Fund.
Edinburgh – £79 million funding for a new super computer.
Infrastructure Finance consultation launched into how to support private infrastructure investment as the UK moves away from the European Investment Bank.
As the Furman Review found tech giants have become increasingly dominant in the market. The government will respond to Furman later in the year with a view to updating competition rules for the digital age, opening up the market and increasing consumer choice and innovation
The Competition and Markets Authority (CMA) is to review and report on the digital advertising market as soon as possible.
Small Businesses Energy Efficiency
To help smaller businesses reduce energy bills and carbon emissions, the government has launched a call for evidence for a new business energy efficiency scheme to support investment by SMEs in energy efficiency measures.
Companies’ audit committees will be required to review payment practices and report on them in their annual accounts.
The government wants passengers to have ‘zero carbon’ travel options and is launching a call for evidence on Offsetting Transport Emissions. This will look at whether travel providers should be required to offer carbon offsets to customers.