The Chancellor’s 2018 Spring Statement was light on new policy announcements, with the major tax and spending decisions being left to the Autumn Budget later this year. Philip Hammond did, however, run through the economic figures and, whilst some of these were weak compared to those of other G20 nations, many were better than anticipated; we heard that growth in 2017 was 1.7% (better than the 1.5% forecast by the Office of Budget Responsibility last year), borrowing in 2017/18 is forecast at 2.2% of GDP (again better than previously forecast), and inflation will return to the target of 2% over the next 12 months. These factors, combined with higher than expected tax receipts, could have allowed the Chancellor to relax austerity measures, or make tax cuts, but he resisted this temptation and put off deciding what to do with the country’s windfall until the autumn.
A raft of consultations and calls for evidence were launched alongside the Spring Statement, and although little came out of the statement, there is the potential for some grand announcements in the Autumn Budget. We are now unlikely to see any major changes in the law for at least another year and so, in the context of tax, we have a refreshing period of stability.