The Chancellor promised there would be no fireworks in the Spring Statement and, in a way, she delivered on that pledge. No new taxes, no fresh borrowing binge, and some modest cuts to public spending – the details of which had already been released.
So what did we learn? What did the Chancellor actually do?
And has Donald Trump just torpedoed what little chance she ever had of growing the UK economy?
The Chancellor made a serious effort to reinstate the £10bn fiscal headroom that had been wiped out since last Autumn, but the OBR is clear that, given the sensitivity of the UK economy to what happens in America and the EU, we are on a tightrope – and any fresh headwinds could blow us off, wiping out the wafer thin fiscal headroom that the Chancellor so carefully restored yesterday and forcing her to either borrow more or raise taxes in the Autumn.
And those headwinds are already racing over the Atlantic after Donald Trump confirmed his 25 per cent tariff on vehicle imports to the US. The American market accounts for just under 20 per cent of UK auto exports and there’s currently no sign of any special treatment in the Special Relationship.
So, Reeves was right when she said “the world has changed” – the problem is, she’s refusing to change with it. She’s sticking with her damaging tax rises on business and the disastrous Employment Rights Bill which the OBR wasn’t even able to factor into its growth forecasts released yesterday.
As Spring turns to Summer the Chancellor will need a growth miracle to avoid a cold and frosty Autumn.
