Philip Hammond announced the Spring Statement today amid considerable uncertainty. Here’s what he said.
The Chancellor said that with less than three weeks to go until the UK withdraws from the EU, the government’s “most urgent task is to lift uncertainty” – but added that the “economy itself is remarkably robust.”
He committed to keeping the Spring Statement brief and promised a full three-year spending review before summer, if a deal with the EU is reached and uncertainty is lifted.
Despite this, there were still several points of interest for small businesses and the self-employed. Here’s what you need to know.
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A new policy to tackle late payments
The Chancellor said that the government’s plans will ensure a “brighter future” for businesses across the country.
A stronger pledge to tackle the late payment problem seems to be part of those plans. Despite Paul Uppal’s appointment as Small Business Commissioner at the end of 2017, late payments continue to affect small business cash flows everywhere. The Federation of Small Businesses (FSB) say as many as four out of five firms have been paid late.
The Chancellor announced that large companies will need an audit committee, led by a non-executive director, to report on payment practices when dealing with small businesses in their annual accounts.
The FSB have been campaigning for #FairPayFairPlay and the Chancellor specifically mentioned their support on the issue.
Read more: how to write a late payment letter
The Chancellor announces that company audit committees will be required to report late payment practice. #SpringStatement@PhilipHammondUK congratulates the FSB on our ongoing campaign to tackle late payments. #FairPayFairPlay 💸 pic.twitter.com/89yPfEsBia— FSB (@fsb_policy) March 13, 2019
A digital economy that ‘works for everyone’
The Chancellor said: “Under this government, Britain will lead the world in delivering a digital economy that works for everyone.”
He also said Britain should embrace the technology of the future to “slay the twin demons of low productivity and low wages.”
Setting out his vision for the UK digital economy, the Chancellor said it should be a place where:
- successful global tech giants pay their fair share
- competition policy works in consumers’ interests
- the public are protected from online harms
The Furman review is an independent review of competition in the digital economy. It calls for a review of competition rules for the digital age with aim of opening the market up and increasing choice and innovation for consumers. Tech giants have increased their dominance, according to its findings.
“We need to adapt our regulatory environment to ensure competition works for consumers in the digital market place, as it does in the real market place.— HM Treasury (@hmtreasury) March 13, 2019
So I asked @JasonFurman, Barack Obama’s former Chief Economist, to review competition in the digital market.” #SpringStatement pic.twitter.com/FXzgw5bMXr
Help for small businesses to lower their energy bills
In acknowledging climate change, the Chancellor also pledged to help small businesses lower their energy bills and cut their carbon emissions.
The government plans to tackle this issue by first calling for evidence on a business energy efficiency scheme, to see how it might support investment in energy efficiency measures.
“We will help small businesses cut their carbon emissions and their energy bills, publishing today a call for evidence on the Business Energy Efficiency Scheme announced at the Budget.” #SpringStatement pic.twitter.com/Z91CgGcenv— HM Treasury (@hmtreasury) March 13, 2019
Further support for apprenticeships
In his speech, the Chancellor acknowledged the difficulty the Apprenticeship Levy places on small businesses wanting to take on an apprentice, and promised £80 million to help get three million new apprenticeships started by 2020.
He updated his apprenticeship reforms from the 2018 Autumn Budget, meaning that from 1 April employers will pay half of the co-investment amounts they currently pay, reducing the rate from 10 per cent to five per cent.
Could the UK get a £26.6 billion deal dividend?
The Chancellor dangled a £26.6 billion ‘deal dividend’ in front of Parliament, which he said would result from a boost in business confidence and finances following a smooth EU exit with a deal in place.
The deal dividend would be distributed after the three-year spending review before summer and put into our public services – beyond the NHS into social care, schools, environment and the police. We could also see cuts in taxes.
Were there any other announcements?
The Chancellor also took the opportunity to make several other key announcements:
- 2019’s growth forecast has been cut from 1.6 to 1.2 per cent, but revised up for 2021 and 2022 to 1.6 per cent (2020 stays the same at 1.4 per cent)
- the government will call for evidence on whether passenger carriers should offer ‘zero carbon travel’ so that customers who want to travel green have the option
- £100 million for police forces in the areas worst affected by serious violence and knife crime in England and Wales
- £81 million for state-of-the-art laser technology at the UK’s cutting-edge facility in Oxfordshire
- £79 million for a new Archer 2 supercomputer at Edinburgh University – with five times the speed of current technology, its processing power will aid discoveries in medicine, climate science and aerospace
- nine consecutive years of growth for the UK economy, with further growth every year for the next five years
- free sanitary products in secondary schools and colleges from the next school year to stop periods being a reason girls can’t attend
- a global review into the Economics of Biodiversity to investigate ways to enhance the natural environment and deliver prosperity
How do you feel about the announcements made in the Spring Statement? Let us know in the comments below.