March 15, 2019
Our Spring Statement 2019 AnalysisContact
This week’s Spring Statement was overshadowed by the Brexit votes in the House of Commons. But the downgrading of the Spring Statement is nothing new. Ever since the Chancellor changed the traditional approach to Budgets in 2017, the Spring Statement has been a quiet affair, and this year’s was no different. Our first chart below shows the number of expenditure commitments the Chancellor has made in each of his last five financial statements.
As you can see, comparatively large spending announcements were at a minimum this year, with the emphasis instead on consultation announcements (depicted further below) and warnings about the effect No Deal would have on the economy. Rather, the central tenet of speech was the current Brexit impasse causing a cloud of uncertainty. Supported by larger than predicted tax receipts and additional borrowing, the Chancellor dangled a £26.6bn war chest to be spent if the UK left with a deal, to be earmarked through a comprehensive spending review later in the year around the Autumn Statement.
Looking at the new spending measures announced, and in contrast to last year’s statement, the Chancellor confirmed two immediate funding commitments of £100 million or more over the issues of knife crime and productivity.
The first of these was an issue that saw lobbying from the Home Secretary, on the back of public and media concern. The latter is the Chancellor’s issue of choice, with his mantra that productivity is essential to supporting sustained wage growth.
Largely, however, the Chancellor’s warnings of a No Deal, and the parliamentary votes that followed, took the focus away from what was another Spring Statement speech thin on content and new.