In­fras­truc­ture key to UK’s first post-Brexit bud­get

Kuwait Times - - BUSINESS -

LON­DON: Bri­tain’s first post-Brexit bud­get will fo­cus on in­fras­truc­ture and could spell an end to the pre­vi­ous gov­ern­ment’s rigid fis­cal tar­gets, ac­cord­ing to a trea­sury state­ment re­leased yes­ter­day. The bud­get will be new fi­nance min­is­ter Philip Hammond’s first set­piece since re­plac­ing Ge­orge Os­borne who re­signed fol­low­ing the June vote.

Un­der pre­vi­ous prime min­is­ter David Cameron, Os­borne over­saw an aus­ter­ity pro­gram of spend­ing cuts and tax rises at odds with new premier Theresa May’s views on the econ­omy which she has said no longer works for every­one. Hammond will prom­ise to place “in­vest­ment in in­fras­truc­ture... at the heart” of Wed­nes­day’s au­tumn state­ment to law­mak­ers, ex­actly five months af­ter the ref­er­en­dum back­ing Brexit, the state­ment said.

Hammond will this week an­nounce 1.3 bil­lion pounds ($1.60 bil­lion) in new spend­ing on roads as part of his plans to bol­ster the econ­omy as Bri­tain pre­pares to leave the Euro­pean Union, the Trea­sury said yes­ter­day. Hammond’s first bud­get state­ment as chan­cel­lor of the ex­che­quer on Wed­nes­day will also com­mit to whit­tling down Bri­tain’s large bud­get deficit, but he will also carve out some flex­i­bil­ity to al­low him to spend more and off­set any sharp slow­down in the econ­omy.

Bri­tain’s econ­omy is so far far­ing bet­ter than ex­pected af­ter the vote to leave the EU, but growth is set to slow next year, lim­it­ing his op­tions.

Mea­sures to boost in­fras­truc­ture and im­prove Bri­tain’s weak pro­duc­tiv­ity growth will be at the heart of the chan­cel­lor’s plan, the Trea­sury said, as Hammond aims to give some long-term sup­port to the econ­omy as Bri­tain ex­its the EU. Last month, the Con­fed­er­a­tion of Bri­tish In­dus­try urged a boost in pub­lic in­vest­ment to 2 per­cent of eco­nomic out­put, or an in­crease of around 6 bil­lion pounds a year.

The Trea­sury said it had iden­ti­fied quick-turn­around in­fras­truc­ture projects and up­grades to ex­ist­ing net­works that would help to re­lieve road con­ges­tion, eas­ing the com­mute for mil­lions and boost­ing pro­duc­tiv­ity. A spokes­woman for the Trea­sury said the money could be avail­able as soon as the Trans­port Min­istry wanted it. Hammond will also an­nounce on Wed­nes­day de­tails of sup­port to fam­i­lies that are strug­gling to get by, the Trea­sury said, echo­ing a pledge by Prime Min­is­ter Theresa May to ad­dress the fi­nan­cial frus­tra­tions of many vot­ers who chose to leave the EU.

“He will set out how the gov­ern­ment will fire up the na­tion’s eco­nomic in­fras­truc­ture-all part of plans which form the back­bone of on­go­ing work to close the UK’s pro­duc­tiv­ity gap,” it added. The trea­sury state­ment also hinted at a loos­en­ing of Bri­tain’s fis­cal straight­jacket, in­tro­duced by Os­borne. Os­borne’s aus­ter­ity poli­cies had in­tended to elim­i­nate the bud­get deficit fol­low­ing the global fi­nan­cial cri­sis.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.