With OBRs long term economic outlook largely unchanged from the 2016 Autumn Budget, Philip Hammond’s second statement contained few surprises or shifts in direction and instead, built on many of the decisions set out in Autumn 2016.
The Chancellor has pledged to be, “the voice for business” and make Britain, “the best place in the world to do business”, although changes to national insurance contributions for self-employed workers has led some to question alignment with the Government’s commitment to entrepreneurship. The Budget has however provided further details regarding Government plans to raise productivity and create the conditions for ‘fair’ and ‘stable’ growth in post-Brexit Britain.
With UK productivity remaining lower than Germany and the G7 average, the Chancellor reiterated the Government’s commitment to raising productivity through investment in R&D and infrastructure. Key measures include:
Following the publication of the Inclusive Growth Commission’s findings on Tuesday, plans were set out to invest in education and skills as a means of addressing the productivity gap and creating a ‘fairer’ economy that benefits all. £500m will be invested in technical education through the introduction of T-Levels which will replace 13,000 different qualifications with 15 career-focused training routes which are recognised by employers and provide a more direct route into work. Support will also be provided for students undertaking higher level technical qualifications, and £40m will be invested by the Department of Education in lifelong learning pilots to help maintain a competitive and skilled workforce.
Devolution will continue with Mayors elected in six cities from May, and suggestions that further plans for devolution have been agreed with the Mayor of London. Newly elected Mayors are however likely to face challenging times. Despite economic growth being up this year, it will be lower than projected for the next three, and the Chancellor has reaffirmed his commitment to reducing national debt. The challenge for Mayors and local partners therefore will continue to be delivering more for less, whilst also ensuring growth delivers tangible improvements in living standards.