Spring Statement 2018: what you need to know. The Spring Statement gives people and businesses certainty and stability to plan for the future.
Major tax or spending changes will now be made once a year at the Budget in the Autumn.
The Spring Statement:
- gives an update on the overall health of the economy and the Office for Budget Responsibility (OBR) forecasts
- gives an update on progress made since Autumn Budget 2017
- invites people and businesses to give views on changes the government is considering
Councillor Judith Blake, Leader of Leeds City Council, said:
“In Leeds we have remained committed to providing services for people in the city in the face of huge reductions in the amount of money from central government. The recent National Audit Office warnings of the impact of austerity on local authorities gave a clear indication of how hard it is to keep providing the services people need if the Government doesn’t provide the finance to back that up. The Chancellor’s statement today did nothing to ease those funding pressures or provide the essential financial support councils need to protect vital front line public services people in Leeds rely on.”
The economy continues to grow, continues to create jobs and continues to beat expectations. The economy has grown for five consecutive years, and exceeded expectations in 2017. Manufacturing has had the longest period of expansion in 50 years.
Employment has increased by 3 million since 2010, which is the equivalent of 1,000 people finding work every day. The unemployment rate is close to a 40-year low. There is also a joint record number of women in work – 15.1 million. The OBR predict there will be over 500,000 more people in work by 2022. The OBR expect inflation to fall over the next 12 months, and wages to rise faster than prices over the next five years.
The UK’s public finances have reached a turning point, with borrowing down and the first sustained fall in debt for 17 years. Borrowing has fallen by three-quarters since 2010. In 2009-10 the UK borrowed £1 in every £4 that was spent. The OBR expect that we will borrow £1 in every £18 this year.
Even so, the UK’s debt remains too high, equal to around £65,000 per household. This makes the economy vulnerable to future shocks. It also imposes a significant burden on future generations.
The cost of debt interest payments is around £50 billion each year – more than the amount spent on the police and armed forces combined.
The government has a balanced approach to get debt falling while funding our vital public services, keeping taxes low, and investing in Britain’s future.
In April 2018 the National Living Wage will rise to £7.83, worth £600 extra a year for a full-time worker. National Minimum Wage rates for under 25s and apprentices will also rise – the largest increase in youth rates in 10 years. Over 2 million people are expected to benefit from April’s increases.
The tax-free personal allowance – the amount you earn before you start paying income tax – will rise to £11,850 from April 2018. This means that in 2018-19, a typical taxpayer will pay £1,075 less income tax than in 2010-11.
Spring Statement 2018 announces that the next revaluation, currently due in 2022, will be brought forward to 2021. This will mean businesses can benefit from the change to three-year revaluations earlier, with the first taking place in 2024.
Improving people’s skills benefits both individuals and the wider economy. To support upskilling and retraining, the government is seeking views on extending the current tax relief to support self-employed people and employees when they fund their own training.