'Nothing' to address East Anglia's 'high street Armageddon' in spring Budget
PUBLISHED: 14:50 13 March 2019 | UPDATED: 16:20 13 March 2019
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The chancellor has missed an opportunity to stop "high street Armageddon" and his forecasts are based on a "big if", according to East Anglian business leaders.
Philip Hammond instead used his scaled-back Spring Statement to warn MPs that if they could not break the Brexit impasse the economy was at risk.
Addressing the House of Commons’ decision not to back prime minister Theresa May’s Brexit deal he said: “Last night’s vote leaves a cloud of uncertainty hanging over our economy. And our most urgent task in this House is to lift that uncertainty.”
But he insisted the economy remained “remarkably robust”.
And there was some good news for Norfolk and Colchester with the announcement the areas would be getting an extra £8m and £3.5m respectively for the roll out of Local Full Fibre Networks.
The Office of Budget Responsibility forecast growth of 1.2pc this year, 1.4pc next year and 1.6pc in the following three years.
Mr Hammond added: “Cumulative growth over the five years is now slightly higher than the Budget forecast.”
The chancellor added that there was “good news” on the public finances with borrowing this year 1.1pc of Gross Domestic Product which is £3 billion lower than forecast at the Autumn Budget. He also said that debt is now predicted to be lower in every year than he suggested last year.
Mr Hammond had always planned for the Spring Statement to be less about announcing spending and more focussed on updating the country on the state of public finances.
However he did announce an additional £100 million for police forces across England to tackle a rise in knife crime.
But bosses in East Anglia have expressed concern that other issues were ignored.
Steve Dack, tax director at Norwich-based M+A Partners, said: “Mr Hammond’s Spring Statement was as much a political statement about Brexit as it was an update on the UK’s economy.
“The OBR forecasts are based on the UK leaving the European Union in an orderly fashion and with a deal in place, while the chancellor stated that a deal ‘dividend’ would release significant funds for public services and capital investment. Although this may sound like good news it is based on a very big if.
“As expected, the chancellor did not announce any major tax changes although a number of reviews and consultations have been launched. However, in keeping with previous chancellors, Mr Hammond did take the opportunity to reiterate the positive announcements made in the last Budget.
“Similarly, significant changes in spending will be addressed in a three-year spending review to be concluded by the time of the next Budget – presumably on the basis that by then he will have a clearer idea of the country’s economic position.”
Simon Gooderham, joint managing partner of professional services firm Cheffins, which has offices across the East including Haverhill and Newmarket, was hoping for concessions to help the high street.
He said: “Retailers will be disappointed that Philip Hammond did not tackle the issues surrounding business rates. It was dubbed the ‘high street Armageddon’ by the head of the British Retail Consortium earlier this week and indeed, the state of the British high street is now looking like its reaching the point of no return.
“With more closures among the sector than at any other time and footfall seeing a bigger drop in January than it has for the past five years, the government really needs to cut business rates.
“The reality is that without a cut in rates, for many, renting a unit on a British high street is no longer viable.”
Other announcements in the statement included:
• A £3 billion affordable homes guarantee scheme, to support delivery of around 30,000 homes
• A “Future Homes Standard” setting out the end of fossil-fuel heating systems in all new houses from 2025
• The provision of free sanitary products in secondary schools and colleges in England from the next school year.
But, in response to the chancellor’s claim that austerity is over, shadow chancellor John McDonnell, said it “was never a necessity it was always a political choice”.
He added: “When the chancellor stands there and talks about the end of austerity, the plan for a brighter future, how can anyone who has lived through the last nine years believe him at all?”
Accusing the government of a “chilling ability” to “disregard completely the suffering they have caused”, he said it was “much too late” to now be trying to change course.
The Labour frontbencher said Mr Hammond had been shadow chief secretary to the Treasury and helped George Osborne to “design the austerity programme”.
He added: “History will hold him responsible for that. There are no alibis.
“He is implicated in every cut, every closure, every preventable death of someone waiting for hospital treatment or social care.”