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Spring statement: Philip Hammond to unveil improved growth and borrowing forecasts - live updates
Spring statement: Hammond promises more NHS cash if staff agree pay deal - live updates
(35 minutes later)
Philip Hammond has just left Downing Street, and is heading to parliament to deliver the spring statement.
Hammond says he will consult on a new VAT collection mechanism for online payments.
There’s no ‘Red Box’ moment - the chancellor was carrying a red folder instead, and didn’t hang around for many photos.
And he will consult on how to encourage digital payments.
Philip Hammond will start delivering the spring statement in 30 minutes (and wrap up before 1pm, if the hints of a short speech are true).
Hammond turns to housing.
We’ll be collating the key points here, as well as tracking the details and reaction in this blog.
There is an investment programme of £44bn, he says.
Dr Faiza Shaheen, the director of the thinktank Class (Centre for Labour and Social Studies), wants Philip Hammond to boost investment and help workers today.
An investment programme of £44 billion to raise housing supply to 300,000 a year by the mid-2020s. #SpringStatement pic.twitter.com/oTdBnX6Jds
Councils are almost bankrupt, workers are overworked and underpaid, and we are losing the race with our competitors in the G7.
He says Oliver Letwin’s review of the planning system and its impact on housing has reached its initial findings. He will publish Letwin’s statement. The full report will be published at the time of the budget.
Britain can’t afford more of the same failed dogma, especially given the uncertainty of Brexit. We need to see the public sector pay cap lifted, public services properly funded, and more borrowing for investment.
Here’s some reaction to the chancellor’s comments on NHS funding:
They’ve also provided a buzzword bingo game, to play along with:
Hammond says more NHS funding to come 'if management and unions can reach a deal'. Sounds like a big 'if', given that the offer seems to be a day less holiday#SpringStatement
Watching Philip Hammond deliver his #SpringStatement tomorrow? Why not play our Buzzword Bingo. pic.twitter.com/FF5Le7hodk
Mr Hammond confirmed the Government is working with unions to reach a pay modernisation deal for NHS staff #SpringStatment
It may not be a full budget, but that’s not stopped the painter Kaya Mar from his traditional appearance outside Downing Street, satirising our political class:
More from the IFS’s Paul Johnson.
s been handed a curate’s egg by the Organisation for Economic Co-operation and Development this morning.
To be clear - against a long term trend of at least 2% a year growth, after poor growth since 2008, and compared with growth across rest of OECD, these are not encouraging forecasts https://t.co/UjoizmQWBI
The OECD has raised its forecast for UK growth this year, but only to 1.3%. It then slows to 1.1% in 2019. That’s weaker than last November’s budget forecasts (which could be revised up today).
He was commenting on this.
In contrast, the global economy is expected to grow by 3.0% this year, with the eurozone expanding by 2.3%.
Our March 2018 GDP forecast. Full forecast published after the Chancellor’s speech #SpringStatement pic.twitter.com/NjRw6nOaef
The OECD says Brexit uncertainty and falling real wages are hurting UK growth, saying:
Hammond list some infrastructure projects the government is funding.
High inflation continues to damp real household income growth and consumer spending, and business investment is slowing, amidst continued uncertainty about the future relationship between the United Kingdom and the European Union.
He says he is today inviting cities to bid for money from a new transport fund announced in the budget.
OECD tee up @hmtreasury spring statement with forecast showing 2018 UK growth of 1.3%, the lowest of all advanced countries. pic.twitter.com/mElvj4QVYK
Chancellor announces he’ll use autumn budget to set out spending totals for 2020 and beyond - and full spending review in 2019. Says if improvement persists, he’ll have more to spend on public services.
Prof John Maloney, an economist from the University of Exeter, believes Philip Hammond could invest more in public services and infrastructure.
Here’s some reaction to the new growth figures, from Grant Thornton’s Adam Jackson ...
He explains:
#SpringStatement #GDP figures: compared to November 2017 forecast, today OBR forecasts 0.1% increase in 2018; same GDP growth rate for 2019 and 20; and then a 0.1% lower GDP growth in 2021 and 2022. So slight improvement this year outweighed by slight decrease in 2021 and 2022. https://t.co/sI9u1lpHCy
This is a good time to invest, with rates of interest so low, so it would make sense for the chancellor to take the brakes off a bit. But, as he has said, there are still economic challenges, and at the most he is likely to have only up to £10bn extra to play with because of a recent increase in productivity.
... and liveblog reader Adrian Jenkins.
He could use it to increase spending, but also to cut taxes or let the deficit shrink faster. He could also cancel any spending cuts or tax rises pencilled in for the future.
Growth forecasts higher in the short term but a little worse in 2021 and 2022. To misquote Sven Goran Eriksson - first half good, second half not so good https://t.co/zb2RJdbrCf
Philip Hammond’s message to Britain today will be “the deficit is dead, long live the debt”, says Torsten Bell, the head of the Resolution Foundation thinktank.
Hammond says the ONS have been asked to work on a better assessment of human capital, so investment can be better directed.
In a blogpost, Bell explains how the elimination of the current budget deficit changes the landscape, but doesn’t end Britain’s problems.
Hammond says the education secretary will release up to £80m to help small firms take on apprentices.
He writes:
Hammond says the government is committed to training. Next month the construction skills fund will be open for bids.
Let’s start with the dying bit. The chancellor will read out the obituary for the deficit that public finances data have written since the autumn. In short, improved tax receipts mean borrowing this year looks set to come in between £7 and £11bn lower than the £49.9bn projected by the Office for Budget Responsibility back in November.
The result is that the current budget deficit (excluding capital expenditure) disappeared on a 12-monthly basis at the end of last year. The thing that has, rightly or wrongly, dominated British economic debate this decade is no more.
But does that mean the chancellor will simply announce job done and that the public finances can retire from dominating our political economy? Far from it. Instead the central purpose of his speech tomorrow is almost certain to be kickstarting the debate that is likely to dominate fiscal policy for the next decade in the way the deficit has in the last – what is the level of public debt that Britain should be aiming for?
And as this chart shows, a fiscal shock such as the next recession would drive debt up again...
There’s less of a media presence outside the House of Commons today, compared with the full-blown budget.
That reflects the fact we’re not expecting tax and spending changes today.
Slimmed down Spring Statement, slimmed down College Green pic.twitter.com/LEJYJ8oXBI
Kirsty Blackman, the SNP’s spokesperson on the economy, says the chancellor needs to do more to help struggling families.
Speaking on Sky News, Blackman says:
We’ve still got one of the slowest growth rates in the G7. Things still look pretty bad.
The uncertainty of Brexit means inflation is going up (as the weaker pound makes imports pricier) while public sector pay is not keeping pace, she adds.
We can expect Hammond to highlight one recent milestone today – UK tax receipts are now covering day-to-day spending.
Ian Jones of the Press Association has tweeted the details:
One piece of news Philip Hammond will almost certainly trumpet today: the government's day-to-day budget is in the black for the first time since 2002. #SpringStatement pic.twitter.com/v1BDUnzIOA
The shadow foreign secretary, Emily Thornberry, wants the chancellor to back plans for a £1.3bn tidal power lagoon in Swansea Bay, off the south coast of Wales.
In a video clip filmed during a trip to Wales, she says:
It’s about time we got some good news on the tidal lagoon.
Come on Philip Hammond, give them what they want.”
If built, the scheme could generate enough electricity for 150,000 homes, and pave the way for similar green energy projects. However, the government has reportedly cooled on the idea.
Shadow Foreign Secretary @EmilyThornberry says people in Swansea need a good news story and today's Spring Statement is a chance for @PhilipHammondUK to deliver one. #lovethelagoon pic.twitter.com/ZsDmKakvgE
The spring statement is being overshadowed by the Salisbury nerve agent attack, after Theresa May told MPs yesterday that Russia was probably responsible.
Rex Tillerson, the US secretary of state, has strongly backed May this morning – that’s significant, as the White House declined to blame Russia yesterday. Moscow has until midnight to respond to the UK.
My colleague Andy Sparrow is tracking that story in his Politics Live blog; he’ll be along here later when Hammond’s speech begins.
