Spring Statement: Chancellor unveils consultation on plastic tax

Reuters

Promised to be a short update on forecasts, Philip Hammond's Spring Statement turned out to be 26 short minutes of politics: uplifting vision for the backbenchers and the television news, coupled with witty digs at the Opposition.

John McDonnell, the shadow chancellor, gave a robust response to the speech, criticising the "indefensible spectacle" of a chancellor "failing to lift a finger" to help struggling local authorities and the NHS.

The OBR's forecast for GDP growth was raised slightly in 2018 to 1.5 per cent, from 1.4 per cent, but growth is still forecast to fall to 1.3 per cent in 2019 and 2020, and only bumping up slightly to 1.5 per cent in the final year of the forecast - well below the two per cent level long seen as the UK's potential.

"That's the OBR's forecast, Mr Speaker, but forecasts are there to be beaten", he said.

Theresa May's spokesman said Mr Hammond claimed there was still work to be done, but the Government would always take a balanced approach to reducing the debt, investing in public services and keeping taxes low.

He said that a business-rate revaluation would happen a year earlier than expected, that more money would be pumped into affordable housing, and that a call for evidence would be launched into measures to end late payments - a practice that has been crippling thousands of small businesses for years.

The UK government will negotiate a Brexit that delivers prosperity and jobs, Hammond said. "But this shows just how cut off from the real world he is", McDonnell said.


Inflation hit 3.1% in November 2017, but the OBR predicted it had reached its peak.

The nine-week consultation will look at the "whole supply chain" for single-use plastics, and examine ways to deliver renewable alternatives and recycling opportunities.

The Office for Budget Responsibility's forecasts for the deficit, debt, GDP and productivity will form the backbone of the statement.

The new forecasts for net borrowing as a percentage of GDP are 1.8% for 2018/19, 1.6% for 2019/20, 1.3% for 2020/21, 1.1% for 2021/22 and 0.9% for 2022/23. Wages of the lowest paid are up by nearly 7%, he added.

Philip Hammond's Spring Statement was characterised by unsafe complacency and offers no light at the end of the tunnel for families across the country, according to Positive Money Executive Director Fran Boait.

The budget statement is also tipped to include improved economic growth and borrowing forecasts.

Hammond's Treasury deputy Liz Truss said there would be "no red box, no rabbits out of the hat and no tax changes".

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