A summary of the Spring Statement in a changing world

If a week is a long time in politics, then the five months since Rachel Reeve’s Autumn Budget feel like an aeon. It is hard to dispute any assertion from the Chancellor that the world has changed since then. The Trump administration’s policies have had a massive economic effect (not only on the UK), both in terms of the cost of world economic instability, and in the desire for increased defence spending in a world where Europe can no longer rely on the States for its security.

Whilst I can be quick to criticise Chancellors (and still feel that Reeves has made a rod for her own back with the growth impact of the autumn Budget’s employer’s NIC rise), I have to accept that balancing the books against such a backdrop is no mean feat. The Chancellor has done well to meet her fiscal rules, even if it has taken a little engineering.

Clearly the headlines have been grabbed by the benefits cuts. Only time will tell just what an impact these will have on claimants, and whether they (coupled with the help back to work vaunted by the Chancellor) will have the desired effect of boosting the workforce. However, the Chancellor was very clear in her mantra of “those who can work, should work”.

Meanwhile, Reeves confirmed that she wasn’t announcing any tax changes; however, could the door be open to coming back in the autumn? In the interim, she did announce:-

• further investment in HMRC to close the “tax gap”, with over 600 new recruits as ta compliance officers and in debt management, and a further investment in AI;
• consultations surrounding additional measures to tackle avoidance and evasion, including further targeting of promoters of tax avoidance schemes, enhanced powers to tax advisers facilitating non-compliance, and reform of penalties;
• meanwhile, late payment penalties for VAT and Making Tax Digital for income tax will increase, with late payment penalties more than doubling;
• a consultation around clearances for Research and Development tax reliefs.

I wonder how many more aeons will have passed in global politics by the time the full Budget is delivered in the autumn?