Key figures Spring Statement 2018 - A Cicero Group overview

Spring Statement 2018 - A Cicero Group overview Philip Hammond pledged in his first Autumn Statement as Chancellor to move the UK to one major fiscal event per year and he has been as good as his word – this was a stripped-back affair.

Simon Fitzpatrick Account Director Cicero Group simon.fitzpatrick@ cicero-group.com

Any major fiscal event is fraught with political danger. By turning it into a mere economic update, and consulting extensively on tax changes proposed for the Autumn Budget, Hammond reduced the scope for political missteps. That’s a shrewd move for a Chancellor who knows many on his own backbenches are eager to see him depart the Treasury.

The flipside is that he has voluntarily given up one of his two biggest annual opportunities to shape the political agenda – George Osborne or Gordon Brown would never have done that. It is a mark of his instinctive political caution and plays to his reputation as a fireworks-free politician. Nevertheless, while Hammond had no major new policy announcements today, his speech was politically punchy. He took repeated swipes at the Labour frontbench whom he dubbed “fiscal fantasists”. There was also a gentle riposte for Tory MPs who have dubbed him too much of an “Eeyore”, claiming instead that he is “most positively Tigger-like”. One member of the Shadow Cabinet declared the Chancellor was “talking Pooh”. The updated economic forecasts showed a slightly improved picture, at least in the near term – growth forecasts for last year and this year are up, though the longer term forecasts show slight downward revisions. There are improved forecasts for borrowing, debt and inflation, but they are not of the magnitude that would embolden a fiscally cautious Chancellor to cast off the shackles. However he offered a teaser that, if the economic weather has continued to brighten by the Autumn, he may announce additional public spending then. John McDonnell was critical, as one would expect. He accused the Chancellor of “astounding complacency” and called the statement a missed opportunity for a turning point in the Government’s approach. However, today was never going to be the time for a fundamental shift in direction. This was a low-key political event delivered by an un-flashy politician. Not to mention that this is a Government with limited room for manoeuvre as long as the shadow of Brexit looms over it.

Key figures The economy grew by 1.7% in 2017, up 0.2% from the Autumn Budget forecast. But growth forecasts for 2021 and 2022 are down 0.1%.

3 million more people are now in work since 2010 and the OBR predict that there will be 500,000 more people in work by 2022.

The UK is experiencing the longest period of manufacturing growth in 50 years.

There is also a joint record number of women in work at 15.1 million.

The OBR expects inflation to return to its 2% target over the next 12 months as real wages will start rising again by the first quarter of next year.

The Government is on track housing supply to 300,000 mid-2020s. The Housing Partnership will be more than to £220 million.

The OBR forecast borrowing to be at £45.2 billion in 2018, £4.7 billion lower than forecast in the Autumn Budget.

A new tech business is being founded somewhere in the UK every hour.

The Government has allocated over £1.5 billion of funds for Brexit preparation in 2018-2019 which will be spent across Whitehall.

The Education Secretary will release £80 million of funding to support small businesses in engaging an apprentice.

to raise by the Growth doubled

Consultations published Title

Overview

Corporate tax and the digital economy: position paper

This position paper sets out the Government’s view on the challenges posed by the digital economy for the corporate tax system and its preferred solutions.

HMT

Consultation outcome

Business rates: delivering more frequent revaluations

The Government has published the outcome of its consultation on business rates and delivering more frequent revaluation.

MHCLG, HMT & VOA


Tax treatment of heated tobacco products

The Government has published the outcome of its consultation on the tax treatment of heated tobacco products.

HMT


Financing growth in innovative firms: Enterprise Investment Scheme knowledgeintensive fund consultation

A consultation on creating a fund structure within the Enterprise Investment Scheme for investment in innovative knowledge-intensive companies.

HMT

Consultation open till 11 May 2018

Allowing Entrepreneurs’ Relief on gains made before dilution

A consultation seeking views on changes to Entrepreneurs’ Relief to ensure that it does not discourage entrepreneurs from seeking external finance for their companies.

HMT & HMRC


Tackling the plastic problem

A call for evidence on using the tax system or charges to address single-use plastic waste and explore how changes to the tax system can address this and drive innovation in this area.

HMT


Cash and digital payments in the new economy

A call for evidence on the role of cash and digital payments in the new economy.

HMT

Consultation open till 5 June 2018

VAT, Air Passenger Duty and Tourism in Northern Ireland

The Government is seeking evidence on the impact of VAT and APD on tourism in Northern Ireland.

HMT


VAT registration threshold: call for evidence

A call for evidence to explore whether the design of the VAT threshold could better incentivise growth improve productivity.

HMT


Taxation of self-funded work-related training

A consultation to determine whether tax relief for the training of employees to support upskilling and retraining should be extended.

HMT


Extension of security deposit legislation

The Government is seeking views on extending the existing securities regime to Corporation Tax and Construction Industry Scheme deductions.

HMT & HMRC


Online platforms’ role in ensuring tax compliance by their users

The Government will explore how online platforms could work with HMRC and taxpayers to help people making money through these platforms to understand and meet their tax obligations.

HMT & HMRC


Alternative method of VAT collection – split payment

A consultation on using a split payment mechanism to reduce VAT fraud that has arisen from the substantial growth in online shopping, focusing on how technologies within the payments industry could collect VAT and deposit it with HMRC in real-time.

Consultation HMTConsultation & open tillopen till HMRC June 2018 29 June29 2018

Department

Status