Few surprises in first Spring Statement

Chancellor of the Exchequer Philip Hammond kept his first Spring Statement brief, providing an update on the country’s fiscal position and trailing a few announcements to be expected in the Government’s Autumn Budget.

The often downbeat Chancellor has been nicknamed ‘Eeyore’ by the media, but Hammond quipped that he felt “Tigger-like” as he took to the podium in the House of Commons today.

He said the statement would update on some of the activity since he committed £60bn of spending in the November Budget, with a few announcements in terms of policy.

One was the decision to bring forward the date of the business rates revaluation to 2021. Hammond described the Conservative Government as “the party for small business and entrepreneurs”, also said he was aiming to “eliminate the scourge of late payments” by looking at future policy changes.

On road-building, the Chancellor praised the opening of the £600m Mersey Gateway which opened in October. As announced in the Budget, Hammond said that he was inviting proposals from councils to bid for an £840m fund to deliver their transport plans.

On housing, Hammond hinted more statements were to be expected in the coming days from Communities Secretary Sajid Javid, in regard to more awards being made from the £5bn Housing Infrastructure Fund. Last month the Government announced it was backing 18 projects across the region with allocations of between £300,000 and £12m from the fund.

Hammond made reference to the Letwin review currently underway into planning approvals and housing completions, which is expected to be published in full later this year and will be responded to in the Autumn Budget.

REACTIONS

Mark Charlton, head of UK research at Colliers International, commented: “Recognising the cost to the UK economy of congestion on British roads, £1.7bn was announced in the Autumn Budget for improving transport in English cities. Half of this has been allocated to Combined Authorities with mayors. The Government is now accepting bids from English cities for the remaining £840m. The resulting infrastructure spend could result in new relief roads and the subsequent release of land parcels ripe for development. This could provide opportunities for the development community – both residential and commercial, for retail and logistics.”

Gareth Buckley, principal at Manchester property agency Avison Young, said: “Pulling an early Easter bunny out of his hat the Chancellor in his Spring Statement 2018 has announced that the next business rates Revaluation will be 1 April 2021 – one year earlier than the previously announced date of 1 April 2022.

“Whilst it seems like good news for ratepayers it looks like the government will continue to have a transitional phasing scheme so any real benefit from decreases in rental values will not be passed on immediately to ratepayers.  With the continuing woes on the High Street this cannot be good news for the struggling retail and food leisure operators.

“Against the current round of staff cutbacks and re-organisation within the Valuation Office, paired with the catastrophe that is Check, Challenge, Appeal, it is a small consolation that the Chancellor committed to sufficient funding at the next spending review. With hundreds of thousands of appeals for the 2010 rating list still to be resolved and the floodgate that is waiting to open for 2017 disputes there needs to be some serious resource invested both in staff and IT.”

Sarah Fitzpatrick, partner at law firm Berwin Leighton Paisner, said: “On the back of the Government’s heightened focus on housing and publication of the long awaited planning reforms last week which seek to resolve the housing crisis, there was a nod from the Chancellor in today’s Spring Statement to the interim Letwin review on so called ‘land banking’.

“This review is work in progress but the initial indications from Letwin are that he is focusing his review on large scale housing sites and that he considers ‘absorption rates’ (rates at which homes can be released onto the market without unsettling the market price) are a key challenge which slows down housing delivery on larger developments. Letwin questions whether such large scale sites are the best mechanism for delivery. He also questions whether the need for market housing to cross-subsidise affordable housing on large sites is slowing down housing delivery. It’s surprising that this is news to the Government. Interestingly Letwin has ignored for the moment the contribution made to housing delivery by small and medium-sized housebuilders and the absorption rates of smaller sites.

“Casting developers as pantomime villains makes good headlines but the issues with housing delivery are far more complex and the Chancellor’s tentative message today suggests the Government is still fumbling around in the dark over what it can actually do to increase housing delivery.”