Spring Budget 2017
If we are to tackle the structural weaknesses in the UK economy and start dealing with the challenges posed by Brexit, we need to invest in long-term infrastructure, a skills strategy and a more productive economy.
In March 2017, Chancellor Philip Hammond set out his Spring Budget, announcing measures such as investment in schools and vocational education, reforms to business rates and £2 billion of funding for social care to be phased in over three years. He opted not to spend in full the fiscal headroom the latest forecast has given him, allowing him more space to borrow.
However, there is a strong case that if the government wants to soften the effects of Brexit through spending, that spending needs to happen sooner rather than later in order for the benefits to be felt in time. Levels of public investment remain similar to those in the years before the financial crisis, a time when the economy was - at least artificially - working. Today, even without the uncertainty of Brexit, we face rising inflation, high interest rates, and a reliance on household borrowing to drive economic growth.
To counteract the potential impacts of Brexit, including damage to our productivity growth, an increase in our trade deficit and a reduction in investment flows, we need to get the UK economy into a stronger and more competitive position.
As the progressive policy think tank, IPPR put forward recommendations to boost growth in the UK economy and ensure gains are equally shared across regions and households in the UK. Our work around the Spring Budget reached a wide audience and had a big impact in the media.
Ahead of the Spring Budget, IPPR's Senior Economic Analyst Alfie Stirling did some modelling that showed that the government’s savings target of £3.5bn was unlikely to be achieved without raiding protected budgets. This analysis, along with findings from past IPPR reports such as Care in a post-Brexit climate: How to raise standards and meet workforce challenges and Skills 2030: Why the adult skills system is failing to build an economy that works for everyone, picked up continued coverage in The Guardian over the Budget week.
IPPR also did some analysis with the Child Poverty Action Group (CPAG) on the impact of welfare cuts on single parent families, showing that various Tory benefit changes since 2010 will have cost working single parents up to £2,850 a year by 2020. This also picked up coverage in the Guardian and, in light of the Chancellor’s pre-budget statement that there would be no spending spree in the 2017 budget, in the Daily Mirror.
Post-Budget, IPPR’s Chief Economist Catherine Colebrook did a number of broadcast interviews, giving responses to the Spring Budget, discussing the UK tax system and commenting on the Conservative’s National Insurance Contributions (NIC) U-turn on talkRADIO and BBC Radio 4.