In his opening remarks, the Chancellor said that this last Spring Budget was about taking forward the current Government’s plan to prepare Britain for a brighter future.
In a fiscally neutral speech revealing spending and revenue raising measures across many different areas of government, what is perhaps more interesting is what he didn’t say – rather than what he did.
As our Business Confidence Monitor revealed last month, whilst the UK economy is doing better than expected at the moment, businesses are not making the investments in capital, research and development, growing exports and head count that will be required if the UK economy is to maintain current levels of economic growth. As the Chancellor himself said, it is this investment that will begin to fix the UK’s chronically poor productivity performance. Yet there was little to incentivise these businesses to take a longer term view and to get themselves positioned for the post-Brexit economy.
Nor did he really tackle the growing regulatory burdens that businesses, particularly small ones, are facing as a result of measures introduced in previous budgets. The delay in Making Tax Digital for those businesses with turnover under the VAT threshold was a great first step and now gives us time to judge the impact the changes will have based on experience with a live system.
Of course, getting the UK economy match fit for Brexit will be equivalent to a marathon, rather than a sprint. And at this stage in the process, a more low key (or boring) budget may be just what was needed. The Chancellor applied sticking plasters where they were needed and perhaps wisely gave himself some room for manoeuvre in uncertain times.
The real changes are likely to come later in the year when the Chancellor unveils his first Autumn Budget.