Infrastructure key to first post-Brexit budget
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 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, Mr 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.
Mr Hammond will promise to place “investment in infrastructure ... at the heart” of the November 23 Autumn Statement to lawmakers, exactly five months after the referendum backing Brexit, the statement said.
“He [Hammond] 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,” the treasury statement added.
The treasury also hinted at a loosening of Britain’s fiscal straightjacket, introduced by Mr Osborne.
Mr Osborne’s austerity policies had intended to eliminate, among other things, the budget deficit following the global financial crisis.
But he scrapped his objective of producing a budget surplus by 2020 in July after Ms May – in a speech launching her bid to become prime minister after Mr Cameron’s resignation – said the policy should be dropped.
“Hammond will set out a new fiscal framework, outlining the need for flexibility to allow government to respond to changing economic conditions,” the statement added.
The plans will include £1.3 billion (US$1.6 billion) of new investment in Britain’s roads to tackle congestion.
As well as tax-and-spend plans, the budget will include the Conservative government’s latest forecasts for British economic growth.
The Autumn Statement is seen as a mini-budget before the main tax and spend announcements given usually in March.
While the risk of recession in Britain caused by Brexit fallout has largely disappeared following upbeat data releases since the June 23 vote, some economists fear the economy could still take a turn for the worse. –
Philip Hammond will place emphasis on infrastructure investment.