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Spring Statement 2018: Chancellor 'Tigger-like' over state of economy amid slightly better economic growth

By Chris Price

Chancellor Philip Hammond has delivered an optimistic assessment of the UK economy saying that after years of austerity that “there is light at the end of the tunnel.”

It comes as the Office for Budget Responsibility has estimated that Britain’s financial settlement with the EU will cost £37.1 billion.

His upbeat assessment in a Spring Statement had been widely trailed and although his speech was longer than had been predicted, it was limited in detailed financial commitments.

Chancellor Philip Hammond. Picture: Adam Gray / SWNS.com
Chancellor Philip Hammond. Picture: Adam Gray / SWNS.com

However, he held out the prospect of improved funding for the public sector in a commitment to "set an overall path for public spending for 2020 and beyond" with a detailed spending review in 2019.

He said the country could not risk allowing Labour to derail progress and cautioned: “We are not out of the tunnel yet.”

The economy is expected to grow more strongly than predicted in 2018 with public finances also improving.

Nodding to his "Eeyore" nickname, Mr Hammond said he was “positively Tigger-like” about the state of the economy.

The Office for Budget Responsibility upgraded its forecast for growth in 2018, from 1.4% to 1.5%.

It forecast growth of 1.3% in 2019 and 2020, 1.4% in 2021 and 1.5% in 2022.

Shadow chancellor John McDonnell
Shadow chancellor John McDonnell

Yet in reply, Labour shadow chancellor John McDonnell said: "Does the chancellor really believe the NHS can wait another eight months for the lifesaving funds it needs? How many people have to die waiting in an ambulance before he acts?"

He also raised concerns over funding for schools, the emergency services and local councils.

There was some grounds for optimism among councils and the NHS in a pledge to carry out a detailed spending review in 2019.

Mr Hammond said that review would be used to allocate the money to different services in 2020-21 and beyond.

He told the Commons:"If, in the autumn, the public finances continue to reflect the improvements that today's report hints at then I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers' money is wasted."

The statement also pledged a consultation on a reduction in tax on the least polluting vans to "help the great British white van driver go green".

There is also going to be a review of a possible tax on single use plastic.

He also pledged to help local councils boost housebuilding in a bid to make it easier for young people to buy their own home.

On business rates, he said a revaluation has been brought forward to 2021, after which the government will move to revaluations every three years.

He also issued a call for evidence on how to help the UK's least productive businesses.

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