In­fra­struc­ture key to first post-Brexit bud­get

The Myanmar Times - - Business -

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. –

Photo: EPA

Philip Ham­mond will place em­pha­sis on in­fra­struc­ture in­vest­ment.

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