5 surprises in the Spring Statement 2019 small print that got buried by Brexit

Chancellor Philip Hammond dangled the end of austerity before MPs today in his Spring Statement – if they back a Brexit deal.

The top Tory made his big financial announcement all about leaving the EU, and peppered it with some other changes that could help your life.

But the actual details were pretty scant. Lots of the meat is in a separate report by the Office For Budget Responsibility (OBR) – the government’s official independent watchdog.

It will shock you to learn that the watchdog’s verdict is not quite so rosy as the Chancellor’s big impressive speech.

More importantly it may have passed you by, since MPs are holding an era-defining series of votes on Brexit.

So as a public service, we’ve rounded up 5 bits of small print from the OBR that are worth reading – and got thoroughly buried by Brexit.

1. A transition cash pot for Universal Credit families has been ‘reduced’

Delaying Universal Credit will mean less transition cash is paid out to struggling families, an official government document shows.

The revelation comes after “managed migration” of 3million existing benefit claimants onto the new six-in-one system was pushed back, only starting in mid-2020.

Tory ministers launched the 12-month delay to ensure people wouldn’t see their incomes suddenly drop when they move over.

But this delay has had a consequence for other families.

It means thousands more people will move to UC while the new system is still being put together – and get no transition payments at all.

That’s because any existing claimant with a “change in circumstances” moves to UC immediately, without being able to wait for the extra cash that will be in place under managed migration.

Today, the Office for Budget Responsibility revealed the delay has saved the government £200million in UC costs over five years.

The reason for that saving was not made clear in the OBR’s report.

Some of it may be due to more people remaining in the old system for longer, instead of racking up costs under UC.

But the OBR also explicitly said transition cash has been “reduced”.

2. The DWP is struggling to cope with its workload on disability benefits

Last week, Tory welfare chief Amber Rudd announced more than 250,000 pensioners will no longer face regular reviews for their disability benefits.

It was hailed by the Work and Pensions Secretary as a compassionate change for thousands of people, allowing them to keep their ‘PIP’ benefits without fearing they’ll be taken away.

But today’s OBR report shows there is another reason too.

According to the report, the DWP faced “long-term capacity constraints” from carrying out the reviews at the same time as assessing new claims, and moving people to PIP from old benefits.

So the department has “prioritised” moving old-style claimants onto PIP, rather than “processing scheduled award reviews”, the OBR said.

3. Business investment is at its worst level since the financial crash

The OBR report says business investment is expected to fall for the second year in a row in 2019.

This is “its weakest performance since the financial crisis” and is due to “uncertainty related to the Brexit process, the OBR said.

Labour MP Clive Lewis of the anti-Brexit Best For Britain campaign said: “That’s not a Britain fit for the future. It’s a limping, broken Britain.

“Once our short-term future is saved from a cliff-edge, we must then put this issue back to the public and give them the final say on what happens.”

4. House prices are set to go into reverse

House prices are set to fall briefly into reverse, the OBR said.

The dip “below zero inflation” is expected to happen around the end of this year – before prices pick up again.

The brief dip will be good news for buyers but bad news for anyone struggling to sell a house.

Despite this, though, the OBR expects house prices to soar 17% between 2018 and the start of 2024 – close to growth in household income.

5. We’re still sitting on a £31billion loss from the RBS bailout

The taxpayer has currently lost out by £31billion from the RBS bailout, OBR papers show.

There were £45.8billion in cash outlays to the formerly stricken bank, but there have only been £6.3billion in “principle repayments”.

Overall the Treasury is down £27.3billion from its various interventions during the financial crash.