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Spring Statement 2018: Short but encouraging
Tuesday 13rd Mar 2018
Normally, around this time of year, we’d all be anticipating the Chancellor’s latest Budget. This year, however, is different. On 13th March, Philip Hammond delivered the first of his annual Spring Statements. These will be much more perfunctory than the full Budgets, which have now been moved to Autumn. There’s even some speculation that Hammond’s speech to Parliament will be just 15 minutes long.
What will this shortened Spring Statement contain? Its novelty means that we can’t be entirely sure, but the expectation is thatthere’ll be practically no new policies. Instead, Hammond will simply respond to the Office for Budget Responsibility’s latest forecasts for the economy and the public finances.
This means that there won’t be, say, sweeping changes to the taxation of diesel vehicles, as we saw in last year’s Autumn Budget. But it doesn’t mean that the Spring Statement will be irrelevant to fleet professionals. All businesses will, after all, have their eyes on the OBR’s growth forecasts, as a sign of how the economy might respond to Brexit. In the forecasts that they published in November, the OBR predicted relatively slow growth of about 1.5% in each of the next five years. Will those numbers grow or shrink as Britain’s departure date draws closer?
The policies that fleets need to hear
However, there is one particular announcement that we’d like to hear from Hammond –theCompany Car Tax rates for 2021-22and perhaps even beyond. Currently, we only have the rates for the next three years, meaning that employees entering into four-year leases are doing so with a degree of uncertainty. The Government shouldn’t just leave them hanging for several more months.We sought clarity in the aftermath of the Autumn Budget and we seek clarity now.
There are some other areas where clarity is needed. Over the past few months, the Government has launched a number of consultations that are of relevance to fleets and their drivers. For example, there was one into measures to help motorists move away from diesel, and another into the HGV Road User Levy. Yet, despite these consultations coming to a close, the final measures are still to be announced.
Given that Hammond wants to keep his Spring Statement brief, it’s unlikely that we’ll hear any of these announcements on Tuesday. But the point remains: in the ever-changing world of fleet policy, we know that more change is coming, we just don’t know what it is yet. The Chancellor and his colleagues should inform us sooner rather than later.