Spring Statement: Hammond ‘puts brave face on the figures’

Chancellor Philip Hammond described himself as “positively Tigger-like” today as he presented upgraded forecasts for the economy and public finances in his first pared-back Spring Statement.

The UK economy is growing at a slightly faster rate than predicted in November, and borrowing is down.

But the Office for Budget Responsibility (OBR) said that the economic and fiscal picture was “broadly the same” overall - “disappointing hopes that the outlook would be transformed by more buoyant tax revenues and productivity in recent months”, says The Independent.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Hammond did his best to “put a brave face on the figures”, says the Financial Times.

“Forecasts are there to be beaten,” the Chancellor said. “As a nation we did it in 2017.”

Praising the statement, the Daily Mail says Hammond is “Eeyore no more” - a reference the pessimistic donkey friend of the upbeat Tigger in the Winnie the Pooh stories. The Chancellor has been “struck by the resilience of the UK economy since the EU referendum”, the newspaper adds.

However, the OBR warned that it is “impossible” to quantify the full effect of Brexit on the public finances.

Hammond “remained true to his word not to announce any new tax or spending commitments”, says the FT, but he did signal that it could be on the cards, with a series of consultations into possible tax changes further down the line.

The Chancellor also announced a “call for evidence” on how tax incentives could cut the amount of single-use plastics.

Hammond said he will launch a review of the VAT system, too, with a view to helping small traders by staggering the introduction of VAT on firms with a turnover of more than £85,000 a year.

Senior government figures told the BBC’s Laura Kuenssberg that cabinet ministers have also been discussing ways to funnel more money to the NHS in England, including potential future tax rises, or a specific tax for health.

Although “No. 10 has publicly maintained the service has what it needs”, says the broadcaster, one senior minister told Kuenssberg that “we all accept” more cash is needed. Another said “it’s hard to see” how current funding levels could remain.

Jonathan Riley, head of tax at Grant Thornton UK, said Hammond’s attempts to rebrand himself as a bouncy Tigger have a fatal flaw, reports The Guardian.

“Today was upbeat, but by the autumn we will know whether we have a Brexit deal or whether the UK will be moving straight to World Trade Organization rules,” said Riley. “So while Philip Hammond was the only one at the government despatch box today, the donkey in the room, the Eeyore, is still Brexit.”

Hammond’s announcement came as the OECD revealed that the UK economy will grow at a slower pace than any other major advanced or emerging nation this year.