Chancellor Philip Hammond set to reject a giveaway Budget despite Treasury windfall
PHILIP Hammond yesterday rejected calls for sweeping tax cuts or increased spending in this week’s Budget despite an unexpected surge in Treasury income.
Stronger than expected economic growth after last year’s Brexit vote has given the Chancellor a windfall ahead of the set-piece financial statement to the Commons on Wednesday.
Research from accountancy firm PwC suggested the expansion could boost Treasury resources by about £45billion over the next five years.
But Mr Hammond insisted that his first Budget this week will not take any risks with the public finances ahead of the start of Brexit negotiations later this month.
Spending extra tax receipts on Budget giveaways would be “reckless”, the Chancellor said.
“It’s not money in the wallet, because we are borrowing a huge amount of money.
“Remember, we have over £1.7trillion worth of debt. This isn’t money in a pot.
“What is being speculated on is whether we might not have borrowed quite as much as we were forecast to borrow.
“If your bank increases your credit card limit, I don’t think you feel obliged to go out and spend every last penny of it immediately.”
Mr Hammond said his Budget would aim to ensure “that we have got reserves in the tank, so as we embark on the journey that we will be taking over the next couple of years, we are confident that we have got enough gas in the tank to see us through that journey”.
He added: “The needs of ordinary working families, the needs of our public services – we’ve got to get that balance right. Mr Hammond also brushed aside calls for increase in spending on overstretched council adult social care services.
“I recognise in particular that social care, and local authorities delivering social care are under some pressure.
“This isn’t just about money. We should remember there are many authorities managing extremely well,” he said.
A former Tory Chancellor will today urge Mr Hammond to use Wednesday’s Budget to set out an “economic mission statement” for Britain’s future outside the EU.
Lord Lamont, who headed the Treasury in the early 1990s, said that the package should signal the Government’s readiness to scrap regulation and red tape as the country prepares to break free of Brussels.
“There are great opportunities for Britain outside the EU,” Lord Lamont will say at an event organised by the anti-Brussels Leave Means Leave pressure group in London.
“In or out of the EU, no one owes us a living – only we can make it a success.
“For this reason the net effect of what the Chancellor does in the Budget and in the next two years should be designed to strengthen Britain’s competitiveness.
“I am sure the Chancellor will show his confidence in Britain’s new economic mission. “To repeat an old phrase – we have nothing to fear but fear itself,” he will add.
Last night, ministers rubbished a call from Labour for the Budget to include a £30billion surge in public spending.
Treasury Chief Secretary David Gauke said: “All Labour offer is more spending, more borrowing and higher taxes – and now we know ordinary working families would pay the price.
“It’s only with a strong economy that we can protect the vulnerable and pay for important public services like the NHS.
“We have turned the economy around from where Labour left it, and are now building an economy that works for everyone, not just the privileged few.”
March 6th, 2017: Express