Chancellor expected to give upbeat assessment of post-Brexit economic prospects
He will say that he is ready to take further “difficult decisions” on tax hikes and spending cuts.
Philip Hammond is expected to deliver an upbeat assessment of Britain’s economic prospects after Brexit in his first Budget as Chancellor, despite admitting that more austerity is in the pipeline as he battles to get the deficit down.
The Chancellor will say that he is ready to take further “difficult decisions” on tax hikes and spending cuts to get the books into balance, even though he recognises that many voters are still feeling the pinch 10 years on from the financial crash of 2007/08.
But he will insist that the Government’s economic programme is laying the foundations for a “stronger, fairer, better Britain” outside the EU and will promise to do everything he can to help ordinary working families.
Acknowledging the concerns of many parents that their children will not get the same opportunities in life that they enjoyed, he will say the Government is investing in young people’s chances to go to a good school and get the qualifications they need for the jobs of the future.
Mr Hammond received an eve-of-Budget boost on Tuesday as a leading international think tank upgraded its forecasts for UK economic growth.
The Paris-based Organisation for Economic Co-operation and Development (OECD) said it now expected growth of 1.6% this year – up from the 1.2% it was predicting in November.
The increase is expected to be reflected in a similar rise when Mr Hammond unveils the latest official forecasts from the Office for Budget Responsibility in his Commons statement on Wednesday.
But while some analysts have calculated that higher tax receipts could give him a £45 billion windfall over the next five years, the Chancellor has insisted there will be no Budget giveaway.
While he has signalled extra support for hard-pressed local authority social care services and firms hit by big rises in business rates, it is expected the measures will be paid for through limited tax rises.
Speaking at the weekend, Mr Hammond made clear his priority was to build up a war-chest to deal with the uncertainties surrounding Brexit, saying he wanted to ensure there was enough “gas in the tank” for the coming years.
The potential for turbulence was underlined by the OECD which – despite raising its UK growth forecast for this year – left its prediction that it will fall back to just 1% in 2018 unchanged.
“UK growth is expected to ease further as rising inflation weighs on real incomes and consumption, and business investment weakens amidst uncertainty about the United Kingdom’s future trading relations with its partners,” the OECD said.
Mr Hammond is reported to be preparing to announce an additional £1 billion for social care in England over the next two years, but is expected to resist demands from Labour and the British Medical Association for a large cash injection for the NHS.
