UK’s Ham­mond plans ‘steady as she goes’ bud­get: Law­maker

Kuwait Times - - BUSINESS -

LONDON: Bri­tish Fi­nance Min­is­ter Philip Ham­mond is likely to an­nounce a “steady as she goes” bud­get plan next week with­out big tax or spend­ing sur­prises, and he will avoid set­ting a firm tar­get for turn­ing the bud­get deficit into a sur­plus, a law­maker said.

Stephen Ham­mond, who is a friend of the min­is­ter and a mem­ber of his Con­ser­va­tive party but is not re­lated to him, told the BBC that Philip Ham­mond would not an­nounce on Wed­nes­day a big in­crease in spend­ing to help the econ­omy dur­ing the un­cer­tainty caused by June’s vote to leave the Euro­pean Union. “Any­one who thinks Philip Ham­mond is go­ing to be Keynes I think has prob­a­bly mis­un­der­stood his eco­nomic phi­los­o­phy,” Stephen Ham­mond said, re­fer­ring to the econ­o­mist John May­nard Keynes, who ar­gued that ag­gres­sive pub­lic spend­ing was the best way to fight eco­nomic down­turns.

Bri­tain’s new gov­ern­ment has said it will drop the tar­get of for­mer fi­nance min­is­ter Ge­orge Os­borne of a bud­get sur­plus by the 2019/20 fi­nan­cial year, the last of the cur­rent five-year par­lia­ment, but will still push to elim­i­nate the deficit. “In­tel­lec­tu­ally the frame­work re­mains that same, that we in­tend to achieve a fis­cal sur­plus within the life of the next par­lia­ment,” Stephen Ham­mond said in a tele­vi­sion in­ter­view broad­cast late on Thurs­day. He said any in­crease in spend­ing on in­fra­struc­ture would need to pro­vide value for money and show a proven busi­ness case al­though he said Philip Ham­mond should not be con­sid­ered “a bor­ing ac­coun­tant.”

While there could be some help for house­holds such as a cut in fuel duty or mea­sures to have savers, there would not be a big fo­cus on what Prime Min­is­ter Theresa May has called Bri­tain’s “just manag­ing” group of fam­i­lies. “This is the time I think for steady as she goes Au­tumn State­ment,” Stephen Ham­mond said. “No rabbits out of a hat.” Ham­mond’s op­tions for his first bud­get state­ment since tak­ing over Bri­tain’s Trea­sury in July are lim­ited by the prospect of a slow­down in eco­nomic growth over the next few years as Bri­tain ne­go­ti­ates its exit from the EU as well as its al­ready weak pub­lic fi­nances.

Many econ­o­mists ex­pect the Bri­tish gov­ern­ment is now on course to bor­row 100 bil­lion more pounds than it pre­vi­ously ex­pected over the next five years.

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