Brexit Budget gives little away as Chancellor keeps tight rein Backlash over tax raid on self-employed ‘Missed chance’ to help small businesses
CHANCELLOR Philip Hammond gave himself a Brexit war-chest to spend if quitting the European Union damages the economy, as he warned that the UK must continue paying off its debts.
Speaking in his first Budget, delivered to the House of Commons on Wednesday, he said borrowing would be £16.4 billion lower than expected – but it would be wrong to spend the money.
But he faced a backlash after putting up National Insurance (NI) for the self-employed. This not only hits the type of working people the Tories claim to represent, but appears to break a promise in the 2015 Conservative manifesto not to put up NI.
There was £2 billion over three years to help struggling councils provide social care – a figure slammed as nowhere near enough by Labour.
Schools received a boost with cash to open 110 new free schools, which could include new grammar schools, and £216 million over three years to repair and improve existing school buildings.
Mr Hammond also announced councils will be invited to bid for a share of £690 million “to tackle urban congestion and get local transport networks moving again”, in a move that could see London-style road pricing extended to other parts of the country.
But despite delivering an upbeat message with the claim that “our greatest achievements lie ahead of us”, Mr Hammond also painted a gloomy picture of the nation’s finances as he explained why there can be no spending spree.
He said: “Each year, we are spending £50 billion on debt interest – more than we spend on defence and policing combined. And borrowing over the forecast period is still set to be £100 billion higher than predicted at Budget 2016.
“So the only responsible course of action is to continue with our plan, undeterred by any short-term fluctuations,” he said.
Borrowing in 2016-17 is set to be £51.7 billion, which is £16.4 billion lower than previously forecast, but Mr Hammond said he would not spend the money, telling MPs: “We will not saddle our children with ever-increasing debts.”
Labour had been urging the Government to spend this cash on bailing out local councils who have been forced to cut social care services, such as home help for frail elderly people.
While Mr Hammond said little about Brexit, the Budget comes as the UK prepares to trigger Article 50, the beginning of the process of quitting the EU, which Prime Minister Theresa May has promised to do by the end of March.
Limiting spending now provides some leeway for the Chancellor to spend money and stimulate growth later, if the Brexit process hits confidence in the economy.
There was also a tax increase for self-employed people, with changes to National Insurance raising an additional £145 million a year for the Treasury. It seemed to contradict a pledge in the Conservative 2015 general election manifesto not to increase National Insurance.
Unlike in previous Budgets, there was little talk of new infrastructure projects such as transport schemes, although Mr Hammond announced £23 million to improve “pinch points” on Midlands roads such as busy junctions.
But Mr Hammond is also to hold a second Budget in the Autumn, potentially giving him a second chance to make a splash once it is clearer how the process of Brexit affecting the economy.
Business reaction to the budget in the Midlands was somewhat mixed. Questions still remained over the pressure on small firms, while moves to plug the skills gap were welcomed.
Among the measures announced were a review of business rates and new vocational education qualifications called T-Levels.
Rob Clifford, group commercial director of Birmingham-based property specialist SDL Group, said: “We feel that the government has missed a huge opportunity to ease the pressure on small businesses.
“While we weren’t expecting changes to the previously ann- is