Blog What We Learned From The 2018 Spring Statement…

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What We Learned From The 2018 Spring Statement…

Chancellor of the Exchequer Philip Hammond stood before the House of Commons to deliver the first ever Spring Statement on Tuesday 13th March – and the speech represented a departure from tradition in several ways.

No budget was announced like it ordinarily is at that this time of year (we must wait until November for that). Nor did Mr Hammond step outside of 11 Downing Street holding his red briefcase aloft like dozens of Chancellors before him. But the discourse did offer an insight into the current state of the British economy, comparing projections for growth with reality and showing business owners what to expect in upcoming years.

Here’s everything we learned from the afternoon announcement…

A growing economy

According to Mr Hammond, the British economy has experienced steady growth on an annual basis since 2010 – with the manufacturing sector enjoying its longest run of growth for 50 years.

Some of the most important data to come out of the Statement included a lower rate of borrowing (down to 45.3 billion – 4.7 billion lower than last forecasted), a fall in inflation to 2% by the end of the year, and a first sustained fall in overall debt for 17 years.

GDP will rise, albeit in a slow-moving manner: 1.5% in 2018, 1.3% in 2019, 1.3% in 2020, 1.4% in 2021 and 1.5% in 2022.

What does this mean for businesses?

Ultimately, a healthier economy means that the government is in a slightly better position to offer businesses financial support. Most noticeably of all, Mr Hammond confirmed £80m in funding to help small businesses over the course of the next year.

As the self-declared “party of small businesses”, the Conservative government are also aiming to reduce business rates by £10 billion, bringing forward the next review to 2021. 

What happens next?

The Spring Statement unveiled some interesting information for entrepreneurs, also hinting at what we can expect to hear when the delayed budget is finally announced in autumn.

The November speech is set to shed some light on public sector finances, including spending and investment. Mr Hammond indicated there are plans for an overhaul of the VAT system – which could benefit entrepreneurs and businesses earning over £85,000. The plans to tackle late payments will also be welcomed by the business community with open arms. 

There are some promising signs for sure, but we will know far more in a few months’ time.

If you’d like to know more about how the latest government announcements might affect your business, our experts here at Bright Ideas can fill you in, offering you terrific financial guidance and support so you’re prepared for the future.

Give us a call on 0161 669 4221 or drop us a line on info@biaccountancy.com to book your free consultation.