Spring statement: EY welcomes government's digital initiatives

Richard Baker, managing partner at EY in the Thames Valley, commented on the chancellor's Spring statement:

“The figures in today’s Spring Statement underline what we already know – and indeed what EY’s own Regional Economic Forecast shows – that we are seeing a slowdown in economic growth across the UK, with the OBR forecasting a fall in GDP from 1.7% growth in 2017 to 1.3% in 2020.

“However, our research shows that the Thames Valley is predicted to grow at an annual GVA growth rate of 2.3% to 2020, with Reading expected to be one of the UK’s fastest growing towns or cities over the next three years (alongside Manchester) in terms of its economic growth, with 2.4% Gross Value Added (GVA) per year until 2020.

“Our research also shows that the more a region is exposed to ICT (information and communications technology) and professional and financial services, the faster the growth tends to be, as those sectors continue to drive the economy. And so the Government’s commitment to investing more in digital initiatives, such as 5G test beds, is welcome but yet more is needed if this region and the country’s productivity growth is to be improved.”

Gareth Anderson, tax partner at EY in the Thames Valley, commented on the Spring statement:

“Someone who’d missed the chancellor’s protestations over the last few weeks would be forgiven for not realising that we’d moved from a Spring Budget to a Spring Statement.  With the same level of jokes and updates on the economy, all that was lacking was the bulk of tax related measures that normally follows the first 20 minutes of the speech. Instead we saw the chancellor lay bare his ideas for the November Budget: the taxation of digital companies, potential changes to the VAT threshold, taxation increases to discourage single use plastics, with the money raised ear-marked for incentivising innovation, with a £20m down payment to boot.

“So, ironically, in the Spring Statement, for once we have seen a real pre-Budget report –something that has been difficult for previous chancellors to deliver. The extra time to consult is very welcome and should allow discussion of the topics while the ideas are forming, rather than once the government has become committed to developing the concepts to fruition.

“This provides the business community the opportunity to engage in the consultation process before the Treasury makes any decision.”