Budget 2017: Tax rises for the squeezed middle…what to expect from the Chancellor TODAY
PHILIP Hammond will hail Britain’s booming Brexit economy today as he delivers his first Budget of the year.
The Chancellor’s “upbeat assessment” of the future of the British economy once Brussels rule is ended comes as one of the leading international economic bodies admitted it was wrong over its gloomy forecast on Brexit.
The Paris based Organisation for Economic Co-operation and Development (OECD) – one of several organisations involved in the Remain campaign’s discredited Project Fear – has said its estimate of Britain’s growth for 2017 is a third higher than it predicted in November up from 1.2 per cent to 1.6 per cent.
The admission comes as Brexit campaigners have seized on a British Chamber of Commerce (BCC) survey which shows that 13 per cent of its members are now sourcing their products at home rather than abroad.
The Chancellor is keen to avoid any suggestion that Britain is vulnerable to a delayed, Brexit-induced economic storm.
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.
He claimed that his Budget would carve out a £60 billion Brexit resilience fund. Theresa May is keen to send the message that Britain can afford to walk away from the EU without a deal.
Former BCC chairman John Longworth, who is now co-chairman of the Brexit group Leave Means Leave, said that the figure and another which showed a third expect to export more highlight new confidence in Britain after the Brexit vote.
He said: “It is very encouraging that a third of businesses are expecting to export more and significant that 13 per cent will switch to source from the UK.
“I expect we will see more of this boost to UK manufacturing in the coming months and years.
“It is clear that Britain’s businesses are embracing the opportunities presented by Brexit and seeing the bright future we have ahead.”
It is understood that the Chancellor is expected to give an upbeat assessment of the future of the British economy, “offering a positive backdrop to his first Budget ahead of the start of new chapter for the country outside of the EU.”
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.
With a Brexit fighting fund of £60 billion set to be announced, he will say that a strong economy is built on resilience, so the Government will continue reducing the deficit, not shirking the difficult decisions on tax and spending, while still investing in Britain’s future.
An ever-increasing number of UK workers are opting for self-employment — and with it lower taxes. Some estimates have claimed there will soon be more self-employed workers in Britain than in the public sector, leaving the Treasury with a shrinking tax base. Some business insiders expect a consultation on tax changes rather than an immediate hike.
Tomorrow he is also expected to say that he knows that many are still feeling the pinch, almost 10 years on from Labour’s financial crash and that the Government will do everything it can to help ordinary working families to get on with possible tax cuts to be announced.
He will say that in “building the foundations of a stronger, fairer, better Britain, outside the EU” – the Government understands the concerns of those who worry about their children’s ability to access the opportunities they themselves enjoyed, in our rapidly changing economy.
He will say that that this government will tackle this challenge head on by investing in young people’s ability to go to a good school, get good qualifications and get the right skills, equipping them for the jobs of tomorrow so they have real economic security.
It has already been revealed that £500 million are to be pumped into funding new grammars.
Meanwhile, the Government has welcomed the OECD’s eve of Budget assessment.
A Downing Street spokesman said: “The Chancellor was very clear at the weekend that the economy is outperforming the predictions of many people.
“We go into the Brexit negotiations from a position of strength.”
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.
It is thought ministers will argue that creating extra social care places will help to ease the pressures on the NHS, ensuring vulnerable patients can be discharged more quickly once they have been treated, freeing up hospital beds.
At the same time it is expected that Mr Hammond will herald a wider reform of the way the needs of the elderly are funded in a rapidly-ageing population.
Government sources have also revealed that Mr Hammond is to announce £5 million to fund events and projects commemorating the centenary of women getting the right to vote.
The Treasury will also unveil a series of measures designed to boost the Scottish economy amid hopes of stopping a second independence referendum. Hammond will unveil plans to tweak the tax system to boost Aberdeen’s oil and gas industry — a big priority for Fiona Hill, the prime minister’s Scottish joint chief of staff.
March 8th, 2017: Express