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For More Information on Dehavilland and How We Can Help with Political Monitoring, Custom Research and Consultancy, Contact For more information on DeHavilland and how we can help with political monitoring, custom research and consultancy, contact: +44 (0)20 3033 3870 [email protected] www.dehavilland.co.uk INTRODUCTION ........................................................................................................................................ 3 KEY TAKEAWAYS & ANALYSIS ......................................................................................................... 6 BUSINESS & EMPLOYMENT .............................................................................................................. 10 CULTURE, MEDIA & TELECOMS ..................................................................................................... 14 EDUCATION & SKILLS ......................................................................................................................... 18 ENERGY & ENVIRONMENT .............................................................................................................. 21 FINANCIAL SERVICES, INSURANCE & PENSIONS ............................................................... 25 HEALTH, SOCIAL CARE & LIFE SCIENCES ................................................................................ 28 TRANSPORT & INFRASTRUCTURE ............................................................................................... 30 HOUSING .................................................................................................................................................... 34 PUBLICATIONS, DOCUMENTS & CONSULTATIONS .......................................................... 39 DeHavilland Information Services Ltd 2018 | www.dehavilland.co.uk 2 Ahead of the Spring Statement, Chancellor Philip Hammond was careful to downplay expectations and stress that it was “not a major fiscal event”. He largely met those expectations today. Nevertheless, the tone of his speech was positively upbeat – or, as he himself put it, “Tigger-like”. Boosted by improved economic projections from the Office for Budget Responsibility, he emphasised the “balanced approach” he had taken since 2016 but also signalled a possible loosening of the purse strings come the autumn. Lest his audience mistook this as a sudden turn towards bombast and theatre, ‘Spreadsheet Phil’ remained true to form in reaffirming his pledge to use the Budget to lay out an overall path for public spending for 2020 and beyond, with a detailed Spending Review in 2019. In addition to signalling the future path for public spending, the main announcements in the Statement related to the allocation of previously announced funds and the launch of various consultations and calls for evidence. This slow and steady approach to policymaking is unlikely to appeal to everyone, least of all the Shadow Chancellor. In his response to the Statement, John McDonnell accused his counterpart of “complacency” and said that the Government needed to “act now”. In particular, he laid the UK’s productivity problem at the door of the Government and argued that the gap between the UK and other OECD countries was because of lower levels of state investment. DeHavilland Information Services Ltd 2018 | www.dehavilland.co.uk 3 He also highlighted the squeeze on council funding, and called on Conservative MPs to rebel against the Government in favour of motions later that day to annul a statutory instrument related to free school meals. Mr Hammond will face attack from many sides. The BBC notes that organisations like the PwC had suggested that the UK would continue to underperform in comparison to other major economies, and largely dismissed the sunny optimism of the Chancellor’s remarks. Meanwhile, the Opposition’s could profit from continued dissatisfaction at austerity and make hay from the absence of any major announcement. Many in his own Party may struggle against the Chancellor’s unwillingness to participate in the theatre of politics and make headline-grabbing announcements, though their attacks may be blunted by the improved economic forecast. Nevertheless, if funding troubles in the NHS or local government worsen then the Chancellor may regret the decision to defer action until the autumn. OBR forecasts In its March 2018 Economic and Fiscal Outlook, the Office for Budget Responsibility (OBR) explains how “only small revisions” have been made to its GDP forecasts since it offered its previous outlook in November. After noting that economic growth for 2018 was now forecasted to stand at 1.5%, the OBR highlighted its surprise at the upturn in productivity growth which, it said, had “been much stronger than expected”. However, Mr Hammond did not dwell on this and, instead, only spoke about tackling the UK’s “long-standing productivity challenges”. The fact that the OBR, at the same time, warned that productivity growth data around 2011 had proven to be “erratic” and had “soon reversed” might offer an explanation as to why. Elsewhere, Chancellor Philip Hammond also spoke about the upcoming Autumn Budget and the potential fiscal headroom he might have available to him. “If, in the Autumn, the public finances continue to reflect the improvements that today’s report hints at… I would have capacity to enable further increases in public spending and investment in the years ahead”, he declared. In contrast, in the Executive Summary of its Economic and Fiscal Outlook, the OBR says that “the outlook for the economy and public finances looks broadly the same” since it offered its November forecast. It points out that although the UK economy “has slightly more momentum in the near term”, the “Government’s headroom against its fiscal targets is virtually unchanged”. As anticipated, the OBR looked in more detail into the consequences for the UK resulting from its departure from the EU. With the December 2017 Joint Report agreed between UK and EU negotiators at its disposal, the OBR has now estimated that the cost of the so-called Brexit divorce bill will total £37.1bn. DeHavilland Information Services Ltd 2018 | www.dehavilland.co.uk 4 The OBR also assessed which of the Government’s fiscal targets it is expected to meet. Addressing one of these – the Conservative Party’s 2017 manifesto commitment to achieve “a balanced budget by the middle of the next decade” – the OBR concludes that the Government’s ability to meet this “appears challenging from a variety of perspectives”. DeHavilland Information Services Ltd 2018 | www.dehavilland.co.uk 5 Health and social care The absence of any notable spending announcement can perhaps be most keenly seen in the area of health and social care, where significant funding issues appear to be in the news on a daily basis. The Chancellor’s only reference to health in the Statement was to disagreements around pay for workers in the health sector. Reports suggest that proposals being negotiated could include staff losing a day’s holiday in order to gain a real terms pay rise. The Shadow Chancellor labelled this mean-spirited, accusing Mr Hammond of not listening to doctors, nurses, families, and even his own councillors. Many charities and campaign groups have said this was a missed opportunity, though the Chancellor’s pledge not to use the Statement for any major spending commitments limited his hand somewhat. Moreover, he highlighted that there had been a significant increase in spending for in the Budget only a few months ago. That being so, not listening to loud calls for extra funding could very easily come back to bite the Government between now and the next Budget. Transport and air quality Unlike previous budgets and statements, in today’s Spring Statement the Chancellor also did not make a large number of funding announcements for transport projects across the country. The Chancellor did announce that local councils would be able to apply for funding from the Transforming Cities Fund. £840m of funding will be available to improve transport in English cities. While the announcement has been broadly welcomed, it is striking that areas with metro mayors have automatically been allocated funding while those without metro mayors will have to compete with other cities to secure local transport funding. The other main announcements were on air quality, where the Government have said they will launch consultations on reducing taxation for low emission vans and on the impacts of red diesel. These announcements have been welcomed, but a number of stakeholders have called for the Government to take further action to improve air quality. Skills and apprenticeships Also missing from today’s Spring Statement were major announcements on skills and apprenticeships. While the Government is now to consult on the extension of tax relief for training by employees and the self-employed to support upskilling and retraining, this was original announced in the Autumn Budget 2017. Moreover, no reference was made to the much-maligned Apprenticeship Levy. Many across the political spectrum welcomed the Levy’s principle to increase the number of apprenticeships, but argued that poor delivery has impacted the results. DeHavilland Information Services Ltd 2018 | www.dehavilland.co.uk 6 Mr Hammond made two announcements of some significance in the field of education and skills. With a stated aim of building a Britain fit for the future and an economy that worked for everyone, the Chancellor announced that £50m would be made available to help employers prepare for the rollout of T- level work placements from next week to ensure people had the skills needed to meet the challenges
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