Spring Statement 2019: what you need to know
The UK economy continues to grow, with wages increasing and unemployment at historic lows, providing a solid foundation on which to build Britain’s economic future, the Chancellor said in his Spring Statement.
With borrowing and debt both forecast to be lower in every year than at last year’s Budget, the Chancellor set out further investments in infrastructure, technology, housing, skills, and clean growth, so that the UK can capitalise on the post-EU exit opportunities that lie ahead.
The Chancellor also confirmed that the government will hold a Spending Review which will conclude alongside the Budget. This will set departmental budgets, including three-year budgets for resource spending, if an EU exit deal is agreed.
The government’s efforts to build a stronger, fairer economy are paying off. The economy remains resilient, and is forecast to continue growing. Indeed:
- there have been nine consecutive years of growth, and the OBR has forecast further growth every year for the next five years;
- since 2010, the economy has grown faster than France, Italy and Japan;
- the OBR expects inflation to stay close to or on target for the duration of the forecast; and
- business investment is forecast to start growing again from next year, once businesses have the certainty they need to invest.
Employment continues to break records
- Since 2010 there are over 3.5 million more people in work, and the OBR forecast employment will increase by a further 600,000 by 2023;
- The unemployment rate of 4.0% is the lowest rate since 1975. The OBR forecast it will remain near historic lows over the next five years;
- Wages are increasing at their fastest pace in over a decade, and are forecast to continue growing faster than inflation, which means more money in people’s pockets; and
- Since 2010, there are a million fewer workless households and every region and nation of the UK has higher employment and lower unemployment.
Education and skills
Ensuring people have the skills that employers need is vital to creating the workforce of the future, the Chancellor said. The Budget set out steps to equip people with the skills to succeed in the modern economy, and now the Chancellor has announced:
- updates to apprenticeship reforms announced at Budget that mean from 1 April employers will see the co-investment rate they pay cut by a half from 10% to 5%, at the same time as levy-paying employers are able to share more levy funds across their supply chains, with the maximum amount rising from 10% to 25%; and
- the government has appointed Professor Arindrajit Dube to undertake a review of the latest international evidence on the impact of minimum wages, to inform future National Living Wage policy after 2020.
A full summary of the Chancellor’s statement is available to view here.