North Swindon MP Justin Tomlinson has welcomed the news that the independent Office for Budget Responsibility has confirmed the Conservative Government’s plans have seen the deficit slashed, led to record employment and will continue to deliver record spending on public services including schools and the NHS.
The findings came as the Chancellor, Philip Hammond, delivered his Spring Statement – updating the public on the state of the economy and setting out areas the Government will consult on ahead of the Budget in the Autumn.
Since taking power in 2010, statistics show the economy has now grown for eight consecutive years, and is nearly 17% bigger than it was in 2010, while the deficit has been cut by over £100bn – meaning that for the time in a generation we are no longer borrowing to cover day-to-day spending. In the same period, the Conservative Government has ensured that schools, hospitals & other public receive record funding, and more people are in work than ever before.
The Spring Statement also confirmed £500 million of additional funding for new T-Levels (testing skills in Technical Education), the rollout of £840 million of investment for local transport, and the launch of a £4 billion fund for housebuilding. It also confirmed that thanks to measures like Universal Credit, there are 600,000 fewer workless households and income inequality has fallen.
The Government is taking a balanced approach as we build an economy that works for everyone. In addition to the positive action to build a stronger and more sustainable economy, we have invested over £60 billion since Autumn Statement 2016, in public services and in building the infrastructure for the future, while continuing to cut tax for millions of working families and seeing debt start its first sustained fall in a generation – a turning point in our recovery from Labour’s mess.
In addition to the new figures released by the OBR, the Chancellor announced that the Government will consult on a wide range of issues including:
- New taxes on single-use plastics as part of work to clean up the environment
- Tax reductions for cleaner, greener vehicles
- Reforming VAT Thresholds to help small businesses
- Reducing Corporation Tax to further boost growth
- Delivering sustainable Business Rates
More information on the consultations can be found below and via https://www.gov.uk/government/publications?publication_filter_option=consultations
Justin Tomlinson MP said: “The Spring Statement reports on our progress creating a country that works for everyone: getting control of the public finances whilst investing in our public services; investing in our economy to create better, higher-paying jobs; and supporting families with the cost of living. I am pleased to see that the independent OBR has confirmed while we have tackled the enormous deficit left to us by Labour, we have still delivered growth, employment at an all-time high, and ensured that public spending on schools & the NHS are at a record high.”
The Spring Statement in summary:
What the independent OBR has said about the economy and public finances
- The economy is set to grow more strongly than previously thought. The OBR today increased their estimate for growth in 2017 from 1.5% to 1.7%, and forecast stronger growth for 2018. Our economy has now grown for eight consecutive years, and is nearly 17% bigger than it was in 2010.
- We’re at a turning point; debt is beginning to fall – the first sustained fall in debt in 17 years. We’ve reduced our deficit by £108 billion over the last seven years thanks to the hard work of the British people; while since Labour’s manifesto was published last year, they’ve committed to spending £106 billion – blowing away eight years of hard work in just nine months.
- Public spending on schools and the NHS is at a record high. Funding for public services accounts for £1 in every £4 the Government spending, with more almost £200bn being spent on education and health this year.
Other good economic news
- Manufacturing has grown for the longest consecutive period in 50 years, with high-tech manufacturing sectors growing strongly since 2010.
- There are 1.2 million more businesses across the UK than there were in 2010, with 200,000 more women-led SMEs in 2016 than there were in 2012.
- Disposable income per person is now 4.4% higher in real terms than it was in 2010, while income inequality is lower than in 2010 and is close to its lowest level since the mid-1980s.
- Inflation is set to fall over the next twelve months. Real wages will increase significantly as they outstrip
Spring Statement 2018: Consultations and proposals announced
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Corporation tax and the digital economy – an update on the challenges posed by the digital economy for the international corporate tax framework, and a proposed approach for addressing those challenges.
- Why we are doing this: We welcome and embrace the benefits brought about through the digital economy. But we must make sure that our tax system is fit for the future as the digital economy grows. That’s why the position paper today looks at what types of businesses are mostly affected, and what works in the longer term. While doing this, we will ensure that we will protect and support Britain’s thriving start up tech sector.
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Business Rates Revaluation – to enable businesses to benefit from more accurate bills, the Spring Statement announces that the next revaluation will be brought forward a year to 2021.
- Why we are doing this: At the Autumn Budget 2012, we announced an increase in the frequency of revaluations from every 5 years to every 3 years after the next property revaluation. This move will ensure that bills more accurately reflect properties current rental value and relative change in rents, and has been welcomed by the Federation of Small Businesses and the British Retail Consortium.
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VAT threshold – looking for more evidence on how the current threshold affects business.
- Why we are doing this: At the last Budget, the Chancellor froze the VAT threshold for two years from April 2018. As he said in November, he is not minded to reduce it. However, we know setting the VAT threshold at the wrong level may dis-incentivise small businesses from growing. So we will look at whether the threshold design could be changed to drive small business growth.
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Cash and digital payments in the new economy – the Spring Statement calls for evidence on whether we can do more to support digital payments.
- Why we are doing this: This will explore how we can further support digital payments, ensure the ability to pay by cash is available for those who need it, and crack down on the minority who use cash to evade tax and launder money.
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Single use plastics – a call for evidence on how the tax system, including charges, can reduce single use plastics waste.
- Why we are doing this: Plastics don’t decompose and can last centuries in landfill, littering the streets or polluting the oceans. The UK produces 2.26 million tonnes of plastic packaging waste a year, but only a third is recycled – compared to half in Germany. Although we’ve made big strides, reducing usage of plastic carrier bags by 80 per cent through the carrier bag charge, we want to lead the way in tackling this global problem.
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Red Diesel for Non-Agricultural Users – look at whether red diesel, for non-road use, discourages the use of cleaner alternatives.
- Why we are doing this: Red diesel is a long-standing relief for all non-road uses of diesel fuel, such as airport operations, off-grid heating and agriculture. Red diesel benefits from a reduced duty of 11.14 pence per litre, compared to the main duty of 57.59 pence per litre. Advances in modern technology and concerns over these harmful emissions make it appropriate to review the relief.
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Van Vehicle Excise Duty - to encourage van drivers to choose cleaner vehicles the government will consult on reforming Vehicle Excise Duty (VED) for vans.
- Why we are doing this: The reform proposed in the consultation is designed to support the transition to zero and ultra low-emission vehicles. The consultation will look at reducing VED rates for the cleanest vans through creating a graduated first year rate for vans, as is already in place for cars. The proposals would mean most van purchasers paying less tax in the first year as a result of the change compared to if they kept their current van, particularly if they switch to a ULEV. This measure is not designed to penalise drivers. When the document is published it will outline a number of options – the most costly option for existing van drivers would add around £5 a year to their annual VED bill, to help fund relief for greener vehicles.
