Philip Hammond set to strike positive tone in spring statement
PUBLISHED: 17:21 12 March 2018 | UPDATED: 17:21 12 March 2018
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The chancellor will today deliver his spring statement and declare "the end of austerity is in sight".
But Philip Hammond will not use the statement to outline any new spending plans or major fiscal policy.
Mr Hammond has decided to move back to having just one Budget a year – a decision that has been met with praise from business and the City.
The statement in parliament has been billed as a modest affair that is set to last no more than 20 minutes.
What is likely to be included are several public consultations on tax reforms and updates on economic and public finance predictions.
Forecasts are likely to be slightly better than expected and the government is aiming to deliver a positive message about Britain’s finances.
Previewing his statement Mr Hammond said: “There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years. That is a very important moment for us but we are still in the tunnel at the moment.
“We have a debt of £1.8 trillion – 86.5% of our GDP. All the international organisations recognise that is higher than the safe level.
“This isn’t some ideological issue. It is about making sure that we have the capacity to make sure that we can respond to any future shock to the economy.
“There will be economic cycles in the future. We need to be able to respond to them without taking our debt over 100% of GDP.”
There is likely to be some good news for smaller companies in East Anglia with the announcement of a consultation on whether they must register for VAT when annual income hits £85,000. Currently this mean a tax bill of up to £17,000. Many believe this has stunted growth for small businesses.
There have also been hints about a consultation on alternative ways to tax trusts and an investigation in to the rules surrounding inheritance tax.
Mr Hammond is not the first chancellor to pledge to move to one big fiscal event a year. But although preferred by business – as it offers the ability to plan long-term – previous occupants of Number 11 including Kenneth Clarke, Gordon Brown and George Osborne reverted back to having the option to intervene twice a year.