Spring Statement 2019

By Simon Fitzpatrick, Account Director, Cicero Group

It was always the Chancellor’s intention to downgrade the significance of the Spring Statement from a full fiscal event to an economic update. But even he can hardly have envisaged how little fanfare would greet what is still the second most significant annual statement of the Government’s economic and financial outlook.

But we are in extraordinary political times, and today’s Spring Statement was sandwiched between two landmark votes on the country’s journey to leaving the European Union. It was therefore inevitable that the shadow of Brexit would loom large over Hammond’s speech. On Brexit, he offered both the carrot and the stick: if Parliament can pass a Brexit deal in the coming weeks there is a “deal dividend” to be had; if not, a short-term hit and long-term suppression awaits the UK economy.

Hammond is not known for his soaring oratory at the best of times, but this felt like a particularly muted affair. The speech was solid and competently delivered. The gag about a supercomputer solving the Irish backstop conundrum was almost amusing. But it’s hard to remember an occasion like this ever feeling more like filler before we get to the real business of the day.

Despite the low-key nature of the event, there was actually a reasonable amount of policy content in the Statement, some of it sounding quite bold. Productivity and the environment were two of the major themes, and there were some eye-catching announcements in these areas. An ambitious target of ending fossil fuel heating systems in new-build homes by 2025, an Infrastructure Finance Review to look at support for private investment in infrastructure after our relationship with the European Investment Bank changes and a review of the link between low wages and productivity all point to some interesting announcements to come.

Hammond – at times accused of having a political ‘tin ear’ – also displayed awareness of the need to act on an emerging knife crime crisis. He announced £100m of ringfenced funding for police forces in England and Wales to help tackle this issue. He also had good news for campaigners on period poverty, announcing that the Government will fund free sanitary products in all English secondary schools and colleges.

So while today’s Statement did not lead the headlines this morning, and nor is it likely to tomorrow morning, the Chancellor will likely reflect on it as a solid afternoon’s work. He will simply hope that, come the time of the Autumn Budget, he will be building on the foundations he has laid today and not trying to deal with the economic fallout of a no-deal Brexit.

To read Cicero’s analysis of the Spring Statement, including political analysis, key figures, consultations launched and video insight, click here.

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