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Spring Statement: A ‘minor’ fiscal event with major messages

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Speed Communications

It was Philip Hammond himself who downgraded what used to be the Spring Budget to a Spring Statement, moving the major fiscal action to the autumn instead. But probably not even he anticipated how much of a sideshow the statement was in danger of being, given the increasingly urgent state of Brexit negotiations.

However, the Chancellor used today’s statement to land some major messages – as well as finding space to build in some important and substantial measures.

Most notably, his over-arching message was powerful and clear: the sunny uplands of economic growth and an end to austerity are in view – but only if we can agree a smooth and orderly exit (with a deal) from the European Union.

As any communicator knows, compelling imagery carries any message a long way. Mr Hammond duly obliged, talking of the “cloud of uncertainty” that hangs over the economy while Brexit is unresolved. He underlined that no contingency planning for a no-deal Brexit could remove the reality of the pain that may result. The House had a “solemn duty”, he said, to secure a deal in the nation’s interests.

Simple carrot and stick then, perhaps: a rallying cry to MPs to get a Brexit deal agreed and negotiated.

But this was also a Spring Statement with some teeth (to mix our own metaphors).

The pressure on the tech giants was ramped up through the announcement of a market study by the Competition and Markets Authority (CMA) into the digital advertising market.

The Chancellor announced the launch of a consultation on alternative models to what he termed “discredited” PFI for investments in infrastructure.

He announced environmental measures such as banning fossil fuel heating systems in new homes from 2025, and boosts to housing such as a £3bn scheme for 30,000 new affordable homes.

Right at the end of his speech, he also delivered news that will see many small businesses punching the air: revealing his intention to require audit committees of large companies to review their performance on late payments and report on it in annual reports. This is the kind of public pressure that could see real progress made on the scourge of late payments.

It may have been a minor fiscal event, but the Chancellor packed a lot in.

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