Although it came in at slightly over the previously estimated 20 minutes last week’s Spring Statement was still a refreshing departure from the normal bluster that surrounds political policy announcements. But why was it so trimmed down?
No major policy changes
Normally, government Budget announcements are awash with fiscal policy changes and everything from income tax to duty paid on a pint of lager can be up for a rethink. However, 2018 has seen the start of a new format, where the Spring Statement will be reserved for responses to OBR data alongside a few key updates. The Autumn Budget (which usually takes place in November) will be where all of the major financial changes will be put forward. On the whole, this was borne out yesterday with little-to-no mention of policy, other than references to reform and legislation that had already previously been announced.
This makes things easier for UK businesses
Businesses have been complaining for some time that they have had to make major changes twice a year under the previous Budget and Statement system. In some years, this means companies have no sooner finished digesting the fallout from one before they have to gear up for the next. This is understandably a lot of pressure and can create a lot of upheaval, which is why Mr. Hammond decided to implement the changes we saw last week. He had already noted a couple of years ago that “no other major economy makes hundreds of tax changes twice a year, and neither should we.”
It could be a response to Brexit uncertainty
No matter what side of the fence you’re on when it comes to Brexit, I think we can all agree that the outcome for the UK is currently very uncertain and has had a clear effect on the value of the pound. While negotiations are still ongoing, it does not make sense for any major changes to fiscal policy to be announced as it’ll likely just create more uncertainty. Since the EU’s chief negotiator, Michel Barnier, has said he would like all talks to be wrapped up by October 2018 to allow time for ratification then, in theory, things should be a lot clearer by the time the Autumn Statement comes around (although that remains to be seen.)
What does the trimmed down Spring Statement mean for contractors?
Well, very little really. As there were no major policy announcements, it means there was little for contractors, freelancers and the self-employed to either worry about or get excited about. The economic forecasts will, of course, have a trickle-down effect on business, but we are yet to see what this is. For now, contractors would be well advised to carry on as normal and wait to see what the bigger Autumn Statement holds. You can see our view on the Spring Statement here.
In the meantime, if you’d like to ensure you have peace of mind by getting your contractor insurance in place, contact the expert team at Kingsbridge Contractor Insurance on 01242 808740 or get a quote online. Alternatively, you can look for more information on our specialised Contractor Insurance Knowledge Hub.