The Chancellor’s statement outlines the plan for a full spending review, now due before summer and further promises are made towards delivering on recommendations made by the National Infrastructure Commission.
Chancellor of the Exchequer, Phillip Hammond delivered the Spring Statement yesterday amid a climate of increasing Brexit uncertainly. The Statement, which forms the lesser of two major annual fiscal events, traditionally provides an economic update rather than major tax-and-spend measures, provided little in the way of surprises.
Whilst the Chancellor yesterday said forecasts from the Office for Budget Responsibility contained within the Statement were based on a ‘smooth Brexit’ and would be affected by a no-deal, parliament yesterday moved to block a no-deal Brexit with an extension to Article 50 looking likely over the coming days.
The Chancellor also promised to have a comprehensive departmental spending review assuming “the Brexit deal is agreed over the next few weeks and the uncertainty hanging over our economy is lifted”. This review will scrutinise spending from the bottom-up, set departmental budgets and is due to finish to coincide with the Autumn Budget. In the event of a Brexit deal, funds set aside for no-deal contingency as well lifting of business confidence will result in a “deal dividend” that will be used to encourage business to invest.
Hammond has reiterated the government’s commitment to publishing a National Infrastructural Strategy which will respond to measures outlined in the National Infrastructure Commission’s (NIC) National Infrastructure Assessment (NIA). The NIA, published in July 2018, called for the government to commit to £43bn in the period to 2040 to fund projects ranging from Crossrail 2 to the Northern Powerhouse.
The Chancellor’s commitment is welcomed and the NIC’s recommendations should be accepted in full. Last month, senior chamber representatives met with the NIC to discuss the influence of long-term transport investment in building confidence in regional economies.