Chancellor of the Exchequer, Philip Hammond, presented his Spring Statement to his peers in parliament yesterday (Tuesday 13 March), but despite his jovial ‘Tigger-like’ mood and demeanour, industry and healthcare experts were not so buoyant.
Budget
Comparing the opposition to the glum character from Winnie the Pooh, Eeyore, Hammond spoke about the health of the country’s economy, which he believes has reached a turning point. Although there is no immediate end to austerity planned he did hint towards potential spending increases come autumn, as reported by the BBC.
In the forecasts, provided by the Office for Budget Responsibility (OBR), it was revealed that the country’s economy is growing with a continuation in job creation and improvements over expectations. Additionally, it was shown that manufacturing has had the longest expansion period in 50 years.
Borrowing has fallen, which means that debt should start to fall as a share of gross domestic product (GDP) — representing the first sustained fall in debt for nearly 20 years.
However, the impact of Brexit on the economy should still be treated with a certain level of apprehension. As OBR chief Robert Chote said to the BBC: “Overall the referendum vote does seem to have weakened the economy as we and most other forecasters expected, but not quite as much as we forecast back in November 2016.
“Having said all this, we are still dealing with the very early drafts of economic history and it’s important not to put too much weight on what are still early indicators of economic activity either side of the Brexit vote.”
Commenting on the Spring Statement from a manufacturing standpoint, Stephen Phipson, chief executive of EEF, the manufacturers’ organisation, said: “The Chancellor confirmed a steady but not spectacular picture for the economy in the next couple of years. The absence of further tuning of tax and spend policies makes sense to businesses at this juncture as does the commitment to strike a balance between paying down the deficit and targeted investment spending. Specific actions on industrial strategy are what business is now looking for.
“Commitments to the industrial strategy pillars of people and infrastructure demonstrates progress in key areas of skills development and digital infrastructure but this will throw down the gauntlet to other government departments to step up to the plate and deliver.
“Despite this positive picture however, the outlook for growth remains on the weak side at a time when global markets are expanding. This is being clouded by the domestic uncertainty surrounding Brexit and weak consumer spending.
“It is now critically important the government achieves a positive transition deal at the European Council meeting next week to provide business with the certainty and confidence to invest. At the same time, manufacturers are looking to the government to keep building momentum on delivering on a modern Industrial Strategy, in particular establishing an independent Council to measure performance and support business confidence in the strategy.”
There was a nod towards the continuing and increasing pressure on the NHS as a result of the ageing population by the chancellor but no clear indicator of increased spending to come.
“[The] Spring Statement delivered what we were told it would — it had little in the way of policy or reform, instead simply providing an update on the state of UK finances,” commented Hitesh Dodhia, superintendent pharmacist at PharmacyOutlet.co.uk. “While expected, it does not make the chancellor’s decision to water down this former ‘mini-budget’ any less disappointing; with pharmacies closing and the NHS under greater strain than ever, Philip Hammond ought to have done more to allay concerns that people’s access to healthcare is going to suffer. We can only hope that Hammond's claims that more NHS funding will be made available ‘if management and unions can reach a deal’ proves true, although it certainly remains a big if.”
“The chancellor might have touted today’s Spring Statement as success story, with the nation’s debt finally falling. But at what cost? The health and care sectors are proof that cuts in public spending are affecting vital services relied upon by millions across the UK, and yet Philip Hammond did little to offer any clear indication or commitment to help tackle this issue through greater NHS funding,” asserted Rohit Patni, CEO and co-founder of WeMa Life. “As a result, there remains an onus on individuals to take better care of their own health or to shoulder the responsibility for sourcing domiciliary care for loved ones, in turn plugging the cracks created by government funding cuts.”
These sentiments were shared by the opposition and other political parties concerned about the state of the country’s healthcare system. But Hammond stood firm and iterated that his Autumn budget will set out an ‘overall path for public spending for 2020 and beyond’.