As we anticipated last week, the Chancellor’s Spring Statement was not overflowing with policy announcements. This was instead the slimmed-down, toned-down occasion that he promised. Philip Hammond simply presented the Office for Budget Responsibility’s latest forecasts for the economy and public finances, allocated some of the money from the Autumn Budget, and launched a number of consultations.
Little change for growth
However, despite its small size, the Spring Statement still managed to include several announcements that will interest fleet professionals. First up were the growth figures. According to Hammond, the OBR now expects the economy to grow by 1.5% this year, which is 0.1 percentage points higher than their forecast at the time of the Autumn Budget. For the four years after that, they expect basically the same amount of growth as they forecast previously: 1.3% in 2019, 1.3% in 2020, 1.4% in 2021, and 1.5% in 2022.
What should we make of these figures? On the one hand, it’s better that the OBR is expecting growth rather than decline. On the other, these numbers are significantly under the 2.4% long-run average. It’s also worth noting that they could be downgraded in future – much still depends on how the UK manages its exit from the European Union.
Enthusiasm for infrastructure
More positively, the Chancellor demonstrated enthusiasm for technology, innovation and infrastructure in his Spring Statement – three things that underpin our own work at Hitachi Capital Vehicle Solutions. For example, he allocated £95 million of the £190 million ‘Challenge Fund’ announced at the Autumn Budget for improvements to the country’s broadband network. He also invited cities to bid for £840 million from another fund, set up to improve transport links.
The low-emission van consultation
And then there was the consultation that Hammond launched into reducing Vehicle Excise Duty for low-emission vans. As we demonstrated with our recent Future of Fuel report, Hitachi Capital Vehicle Solutions is excited about the potential of alternative fuels for commercial vehicles. We’re glad that the Chancellor appears to be thinking similarly.
One thing that the Spring Statement didn’t contain was the Company Car Tax rates for 2020-21 and beyond, which we called for last week. But that is unsurprising. Today’s event was always meant to be short and relatively sweet – and, in that respect, Hammond delivered. We look forward now to his Autumn Budget.