SPRING STATEMENT: Funding to boost apprenticeships and measures to tackle late payment welcomed

While Cumbria received a huge boost with the news the Government would channel £260m through the Borderlands Growth Deal – adding to the £85m pledged earlier in the day by the Scottish government – Phillip Hammond’s Spring statement also included a number of announcements with potentially significant impacts on businesses in the county.

They included bringing forward a £700m package of reforms to encourage small businesses to take on apprentices, which will now begin next month, after previously announced in last year’s Autumn Budget. Cumbria already has one of the highest levels of apprenticeship take-up in the UK.

Audit committees at large companies across the UK will also be required to review their payment practices and report on them in their annual accounts, in what Mr Hammond described as a “first step” in tackling the issue of late payments to suppliers, typically SMEs.

Mr Hammond said business secretary Greg Clark would announce further details in the near future and praised the FSB for “tirelessly campaigning” on the issue.

The Chancellor also announced a call for evidence on plans to help small businesses cut their carbon emissions and energy bills.

And he reiterated the Government’s commitment to Northern Powerhouse Rail – which could provide new and faster links between Cumbria and major cities across the North and considering the business case for support ahead of a sweeping spending review, which is set to kick off ahead of the Summer recess if a Brexit deal is reached.

Rob Johnston, chief executive of Cumbria Chamber of Commerce, welcomed the announcements on apprenticeships and late payments.

“We know that companies such as Carillion exploited their suppliers by delaying payments to them,” he said.

“This measure reduces the likelihood of that happening.”

However, he criticised the Government for waiting until the Spring Statement to announce details of tariffs that will apply to important into the UK in the event of a ‘no-deal’ Brexit.

“There were rumours that Ministers were considering scrapping tariffs altogether, which could have been very damaging for some sectors – notably agriculture,” he said.

“They haven’t done that but it is baffling that they’ve drawn up these tariffs without meaningful consultation with businesses. We know of a company in Cumbria that imports machinery from the EU that will have to pay tariffs of 22 per cent. A surcharge of that order is potentially very damaging for them.”

Mr Hammond also focused heavily on housing, saying that the 220,000 homes build last year was the highest level in all but one of the last 30 years. A £44 billion programme over the next five year aims to raise the annual supply of new homes to 300,000 by the mid-2020s, said the Chancellor. He also announced a future homes standard that will end fossil fuel heating systems in all new houses from 2025 in a bid to “lower carbon and bills”.

And in a move likely to be welcomed in Cumbria, he unveiled new planning reforms to release land in areas where pressure for new homes is greatest and stressed to help the “next generation” through a £3bn affordable homes guarantee scheme to support the delivery of around 30,000 affordable homes across the country.

Announcing new tax and regulatory measures to tackle the “scourge” of plastic waste, he also made a commitment to protecting biodiversity – a move which the Federation of Master Builders believes will incur more costs and delays for SME house builders.

On the Government’s controversial immigration white paper, Mr Hammond announced that paper landing cards at UK points of entry would be abolished from June, and that citizens of the, USA Australia, New Zealand, Canada, Japan, Singapore, and South Korea will be able to use e-gates alongside European Economic Area nationals. He also scrapped visa caps for PHD students.

“Our ambition is to be able to go further in due course,” he said.

“(This is) a signal to the world of our commitment to global Britain.”

The Chancellor also spoke about the “enormous opportunities and challenges” presented by the digital economy, announcing a digital services tax to ensure global tech giants pay “their fair share” and revealing that the Competition and Markets Authority will be undertaking a study into the digital advertising market “as soon as possible”.

Other announcements included free sanitary products in secondary schools and colleges in England from the next school year, and £100m ringfenced to tackle knife crime over the next year.

The announcements came after Mr Hammond presented a positive economic outlook for Britain – as long as it avoided a ‘no-deal’ Brexit.

He said that public finances were continuing to improve and that the Office for Budget Responsibility (OBR’s) forecast growth of 1.2 per cent this year, rising to 1.4 per cent in 2020 and rising again to 1.6 per cent for the following three years.

He described the UK economy as “remarkably robust” having grown for nine consecutive years – the longest unbroken quarterly growth run of any G7 economy. 

He said that 5m new jobs had been created during the Conservative Government’s tenure; youth unemployment had been halved; there were record levels of women in work; and the country was seeing the fastest rate of wage growth for over a decade. The OBR, he added, had revised up wage growth at 3 per cent or higher for the next five years.

Meanwhile, borrowing was £3bn lower than the forecast from the Autumn Budget and was expected to fall to 13.5bn in 2023/4 – down from £29.3bn this year.

“(It is) an economy that has defied expectations and will provide the solid foundation Britain needs to seize the opportunities the future offers,” he said.

Mr Hammond also said that spending review would be launched in the summer assuming a Brexit deal is agreed, which would set department budgets and priorities in areas ranging from social care, local government and schools to the police, defence and the environment. 

The NHS has already been awarded £34bn worth of additional funding per year in a bid to improve cancer and mental health care, transform GP services and recruit more doctors and nurses.

Mr Hammond also spoke of a “deal dividend” – sparked by a return in business confidence and reduction in the “fiscal headroom” – if a deal with the EU was secured but added that the Bank of England was resilient “to any likely shock” caused by a ‘no deal’ Brexit.

“No deal will cause significant disruption in short medium term and smaller and less prosperous economy in the long term,” he warned.

“Higher unemployment, lower wages, higher prices in the shops. It was not what the public voted for in June 2016.

He added: “Progress at risk if deal and orderly exit can't be secured. I am confident we as a house will do it in coming weeks.”

The positive outlook from Mr Hammond was called into question by Workington MP, Sue Hayman.

“Nine years of failed Tory economics have created a society of low pay, long hours, insecure work, with low investment, low productivity, and low growth,” she said.

“Growth is at its weakest for six years, manufacturing is in recession, and the trade deficit was over £10 billion in the last quarter of 2018. Real wages are still lower than they were 10 years ago, while household debt has soared.

“UK productivity is weaker than other advanced economies, and years of underinvestment in skills and infrastructure mean we are falling behind in key industries of the future, such as green technologies.

“Enough is enough – it’s time for change. Britain desperately needs a Labour government which will rebuild our country and invest in our economy, putting jobs first, guaranteeing workers’ rights and consumer standards, and safeguarding our environment.”