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Spring Statement 2019: An instant response

13th Mar 2019
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Budget watchers have become used to the tactics that Philip Hammond adopts when standing at the despatch box. However, Spring Statement 2019 was always going to be different, at least to a degree.

We still had the snide remarks about the opposition, egged on by jeering men in blue suits sitting on the benches behind, who otherwise spent their time doing imitations of those nodding dogs that used to sit inside car windscreens.

There were also the airy promises about economic improvements several years from now, not to mention overtly political policy statements.

However, this time around there were also significant differences. Pleasingly, this speech was around half as long as one has come to expect, which can only be regarded as a significant plus point, making the Chancellor of the Exchequer into a far more sympathetic character than ever before.

Secondly, in a completely unprecedented show of humility, Mr Hammond prefaced his speech with the observation about “a cloud of uncertainty hanging over this house”.

Indeed, it might be argued by some that the very hopeful observations about the economy and a few minor giveaways that are likely to disappear without trace before tomorrow’s newspapers have been wrapped around fish and chips were little more than a subtext.

Presumably in conscious support of a very tired prime minister with big bags under her eyes sitting directly behind him, the Chancellor repeatedly harked back to the Brexit farrago, in the middle of which he had been recruited to provide some much-needed light relief. On several occasions, he urged his House of Commons cohorts to see sense and ensure that a no-deal Brexit did not take place.

Mr Hammond emphasised that everything announced in the Spring Statement was contingent on the avoidance of such an outcome. As he explained, a no-deal Brexit would deliver a short to medium-term hit to the economy from which it might take years to recover.

As a corollary, he reminded listeners of the deal dividend that could be achieved by releasing amounts put into reserve and the boost to the economy resulting from any other conclusion to the ongoing, raging debate about our future relationship with Europe.

This might be used to compound some very positive economic figures, partly as a result of higher tax receipts, and provide opportunities to move Britain away from a decade of austerity towards something far more encouraging.

He went on to say that “everything is rosy in the garden” but both he and we are still metaphorically looking over the Hammond shoulder at that oversized elephant which is still poised to trample all over our lovely flowerbeds.

It has to be said that while there are apparently some detailed background papers in the offing, and particularly bearing in mind the contingent nature of the event, Mr Hammond was very short on substantive proposals. The Chancellor barely even tinkered around the edges of some of the country’s biggest financial and fiscal headaches.

For example, tax avoidance did not even rate a mention, a first for this Chancellor. While the possible need to raise significant additional amounts from companies and individuals should Britain leave Europe without any fixed deal in a couple of weeks’ time has been left in abeyance unless and until that actually comes to pass.

We had already heard about a desire to increase competition in the digital marketplace with the prospect of a digital tax still on the cards.

Similarly, it is really hard for this accountant or probably any other to get excited about a new affordable homes guarantee scheme or the impact of the national minimum wage, let alone sanitary products for schools, funding to police knife crime or even the exciting news that PFI is to be replaced by something that sounds suspiciously like PFI but with a new name and acronym.

One measure that may possibly provide a real boost to our own businesses and, more likely, those of our clients was a desire to introduce a harsher regime to attack those that customarily delay making payments to small businesses, sometimes as a determined strategy. In future, audit committees will be required to review payment policies and practices and report on those in published accounts. Even then, whether this kind of naming and shaming will actually change internal procedures at some of the largest companies in the land might be a moot point.

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