He spoke for a brief 25 minutes, and had a relatively positive story to tell on the state of the public finances. The biggest improvement from the OBR’s forecast was seen in the public finances, and it looks likely the Chancellor will spend some of this at Autumn Budget whilst keeping some in reserve for future economic shocks. This is sensible given Brexit uncertainty is still weighing on the economy.
And while the latest data indicates the economic outlook has improved slightly in the near term, the medium-term remains broadly unchanged from November’s forecast. Moreover, we see the global economy going from strength-to-strength while economic growth here in the UK remains lukewarm, making it even more important that we achieve a Brexit that delivers prosperity, while not harming the UK’s competitiveness.
Away from the public finances and the economic commentary, we saw the Chancellor set out a positive vision and tone for the future economy, focusing on the need to share best practice on productivity, very much in line with the CBI’s work on the topic in last year’s Ostrich to Magpie report. Additionally, the mention of the Government’s partnership with the CBI and the TUC on the National Retraining Partnership is a great example business and government working together to develop a workforce of the future and meet the needs of local labour markets.
Two areas of concern for business moving forward are the apprenticeship levy, and corporate tax and the digital economy. There was a missed opportunity to make the apprenticeship levy more flexible so it delivers the high-quality skills we need. And while the updated position paper on tax and the digital economy rightly puts more weight on an international solution, business will be keen for the UK to avoid any unilateral action.
Overall, a positive statement with the Chancellor rightly acknowledging the role British business can play in securing future prosperity.
If you would like to know more, please get in touch with Fiona Geskes.