A growing economy; thriving labour market; inflation on target and a solid foundation on which to build Britain’s future, the Chancellor, Phillip Hammond said last week (13th March 2019) in his Spring Statement. We have summarised the key points affecting businesses across Britain.
There have been nine consecutive years of growth, and the Office for Budget Responsibility (OBR) has forecast further growth every year for the next 5 years.
The OBR expects Britain to continue to grow in every year of the forecast, at 1.2% this year, 1.4% in 2020 and 1.6% in each of the final three years.
Business investment is forecast to start growing again from next year, once businesses have the certainty they need to invest.
Wages are increasing at their fastest pace in over a decade, and are forecast to continue growing faster than inflation.
Tech and the new economy
Budget 2018 included significant additional support for cutting-edge science and technologies that will transform the economy, create highly skilled jobs, and boost living standards across the UK. In the Spring Statement the Chancellor:
Welcomed the Furman review, an independent review of competition in the digital economy, which has found that tech giants have become increasingly dominant. The Chancellor announced that the government will respond later in the year to the review’s calls to update competition rules for the digital age – to open the market up and increase choice and innovation for consumers.
Announced £79 million funding for a new supercomputer in Edinburgh – five times faster than existing capabilities – whose processing power will contribute to discoveries in medicine, climate science and aerospace, and build on previous British breakthroughs including targeted treatments for arthritis and HIV.
To help smaller businesses reduce their energy bills and carbon emissions, the government is launching a call for evidence on a business energy efficiency scheme to explore how it can support investment in energy efficiency measures.
Education and skills
Updates to apprenticeship reforms announced at the Budget that mean from April 1st employers will see the co-investment rate they pay cut by a half from 10% to 5%, at the same time as levy-paying employers are able to share more levy funds across their supply chains, with the maximum amount rising from 10% to 25%.
There will be a full spending review later this year. The government has announced the Budget will set out its plan to build a stronger, more prosperous economy, building on the Spring Statement and last year’s Budget.