Statement - Chancellor's Spring brief

  • Today the Chancellor reports on a resilient economy which is creating jobs and delivering the fastest rate of wage growth in over a decade. The deficit this year is £3 billion lower than last forecast and debt is lower in every year – with lower taxes on families and more being invested in our public services.

 

  • Labour opposed all the decisions we took to get the economy back on track – if we’d listened to Labour there would be fewer jobs and higher taxes on working families. Unemployment went up by nearly half a million when they were in power, and they now want one thousand billion pounds of extra borrowing and taxes, which would send debt spiralling and take us back to square one.  Just like last time, working people would pay the price.

 

  • This Spring Statement sets out our plan for a bright future for Britain – creating a digital economy people can have confidence in, redoubling our commitment to skills and world-class infrastructure, staying at the cutting edge of clean growth and tackling the big challenges like knife crime head on. Our potential is limitless, but we can only achieve it by building a consensus for a deal to exit the EU in an orderly way, to a future relationship that will allow us to flourish.

 

ECONOMY AND PUBLIC FINANCES

 

The OBR has published its outlook for the economy and public finances. It shows a growing and resilient economy and a thriving jobs market with wages on the rise – a solid foundation on which to build Britain’s economic future.

 

Key facts:

 Wages will rise faster than previously expected. The OBR have revised up wage growth in every year to 2023, with wages growing faster than prices in each year and reaching a record high rate of 3.3 per cent growth in 2023. 

  • Employment will continue to rise. The OBR expect to see 600,000 more jobs by 2023, meaning in 2010, there will be 4.1 million more people in work by 2023.
  • The economy will grow in every year. The OBR expect the economy to grow at 1.2 per cent this year, faster than Germany, accelerating to 1.4 per cent in 2020 and to 1.6 per cent in each of the final three years.

 

Key points on public finances:

  • The deficit has been revised down in each of the next five years. The deficit will be £3 billion lower than expected this year, down to 1.1 per cent of GDP from almost 10 per cent under Labour.
  • National debt has also been revised down in every year. Debt has been revised down in every year and is set to fall as a share of GDP in every year, from 82.2 per cent next year to 73 per cent in 2023-24. Its first sustained fall in a generation.

 

OUR PRIORITIES FOR BRITAIN

 1. Building an economy fit for the future.

 

To succeed in the world and secure higher wages and living standards for people at home, we need to embrace the future, investing in infrastructure, skills and the new technologies which will shape the global economy.   

 That’s why today we’re:

 

Cementing our position as a destination for new tech. To maintain the UK’s lead in advanced technologies we will invest £79 million in a new supercomputer in Edinburgh, £45 million in research in genomics, £81 million in a new laser centre and reaffirm our commitment to the JET nuclear fusion reactor.

 

  • Carrying out a study of digital advertising later this year to ensure our digital markets are competitive and consumers get the level of choice they deserve. As recommended by Professor Jason Furman, the Competition and Markets Authority will carry out a formal study of digital advertising. This follows our announcement at the Budget that we will consult on a new Digital Services Tax to ensure large multinational businesses make a fair contribution to supporting vital public services.

 

  • Continuing to welcome the best and brightest to Britain. From the autumn, PhD level occupations will be exempt from the Tier 2 visa cap, and we will update the immigration rules so researchers conducting fieldwork overseas are not penalised if they apply to settle in the UK.

 

  • Building world-class infrastructure. Ten English cities will receive a share of £60 million for transport projects through the Transforming Cities Fund, and we will boost digital connectivity by rolling out fibre broadband to nine more local authority areas who will each receive a share of £53 million. The Chancellor has also reiterated our commitment to Northern Powerhouse Rail.

 

  • Forging new partnerships to build a Global Britain. We will set up a new export finance facility to provide more flexible short-term support to UK exporters as we leave the EU.

 

Labour opposed all the decisions we took to get the economy back on track. They now want one thousand billion pounds of extra borrowing and taxes, which would send debt spiralling and take us back to square one. 

 

  1. Supporting families.

 

Debt is starting to fall for the first time in a generation, but getting to this point wasn’t easy, and families have felt the squeeze. After a decade of fixing the economy, people need to know that their hard work has paid off.

 

That’s why today we’re:

 

  • Restoring the dream of home ownership for millions of young people. A new £3 billion Affordable Homes Guarantee scheme will deliver around 30,000 affordable homes. We will also introduce a new permitted development right to allow upward extensions without the need for planning permission.

 

  • Boosting wages and cutting taxes. We are increasing the National Living Wage this April to £8.21, an annual pay rise of £690 for a full-time worker. The Personal Allowance will also rise in April to £12,500 and Higher Rate Threshold to £50,000, cutting tax for 32 million people. And we will undertake a review of the latest international evidence on minimum wage.

 

  • Tackling period poverty. We’ll provide free sanitary products for girls in secondary school, so no girl is ever forced to miss out on her education.

 

Labour always hurt the people they claim to help – no Labour government has left office with unemployment lower than when they came in. Jeremy Corbyn voted against £6,500 worth of tax cuts for families, and the CBI has warned Labour’s plans would ‘reduce pay in people’s pockets’ and see a ‘drop in living standards’.

 

  1. Supporting public services.

 

Our balanced approach is dealing with Britain’s debt whilst delivering the highest sustained levels of public capital investment in 40 years – at the Budget the Chancellor announced public spending will increase as we set out our priorities for the future.

 

That’s why today we’re:

 

  • Tackling knife crime with £100 million of new funding for police. A further £100 million funding will be available to police forces in the worst affected areas in England and Wales for knife and violent crime. The majority of the funding is being provided to Police and Crime Commissioners for the seven police forces where serious violence levels are highest, and which make up around 70 per cent of knife crime. Those forces cover London, West Midlands, Merseyside, South Yorkshire, West Yorkshire, South Wales and Greater Manchester. 

 

  • Building world-class public services by increasing spending by above inflation. In the last two years alone, we’ve made the biggest pledge of any government since 1945 to our NHS, put £2 billion more into schools and police budgets will increase by up to £970 million this year. From 2020, at this year’s Spending Review overall public spending will increase above inflation, with more for frontline services that we all rely on. 

 

Labour’s plans would mean just like last time tens of billions wasted on more debt repayments which means less money going into our NHS, schools and our police.

 

  1. Green Growth.

 

We must apply the creativity of the market economy to deliver solutions to one of the most complex problems of our time – climate change – making sure we leave the economy and our planet in a better state than we found it.

 

That’s why today we’re:

 

  • Staying at the cutting edge of Clean Growth. We will take steps to enable passengers to have the option of ‘zero carbon travel’, help businesses to cut their carbon emissions and their energy bills, further decarbonise our gas supply, and will introduce a Future Homes Standard, bringing the end of fossil-fuel heating systems in all new houses from 2025.

 

  • Leading the world to enhance biodiversity whilst ensuring economic prosperity. We will require developers in England to enhance habitats for wildlife alongside developments. A new global review will assess the economic value of biodiversity globally so we know what’s needed to take action.

 

  • Reducing our dependency on natural gas by increasing the proportion of green gas in our system. To meet out climate targets we will reduce our dependency on burning natural gas to heat homes, accelerating decarbonisation by increasing the proportion of green gas in the grid.

 

Labour’s renationalisation plans would disrupt our efforts to tackle climate change. A renationalised system would not be able to invest in new technology needed to decarbonise according to the Energy Networks Association.