TIME TO PUMP MORE CASH INTO CRISIS-HIT PUBLIC SERVICES, PLEASE MR CHANCELLOR
PHILIP Hammond was last night facing intense pressure from Tory MPs to loosen Treasury purse strings and hike spending on Britain’s cash-starved public services.
Ahead of his spring statement in the Commons tomorrow the Chancellor yesterday declared that the Government was at last beginning to cut the country’s debt mountain after years of restraint.
“There is light at the end of the tunnel,” he said, while insisting the Treasury still needed to keep a grip on the public finances.
Official figures are expected to show that Government borrowing will be around £7billion lower this year than predicted by Whitehall’s financial watchdog at the Budget in November.
Senior backbenchers urged the Treasury chief to seize the opportunity of an improving public finances balance sheet to find billions more for the NHS, social care and other vital services.
Former Tory minister Robert Halfon said: “We need to focus our resources on the NHS, skills and housing.
“We also need to spend a lot more on further education, which has been starved of funds. These are the things the public wants. We need more genuine affordable housing and social housing, and that means the Government giving money to housing associations to provide more homes.
“The NHS, which is so important to the people of this country, needs a 10-year investment plan.
“The Government also needs to be investing in skills including providing many more apprenticeships right up to degree level.”
Mr Halfon urged the Chancellor to kick-start economic growth by slashing business taxes, then use the expected increasing revenues to set up a “redistribution fund” for addressing urgent priorities.
“Above all, we need to identify the key social injustices and divert resources towards tackling them,” he said.
Senior Tory backbencher Jacob Rees-Mogg also urged the Chancellor to find more cash for the NHS.
Yesterday he said: “With an ageing population and with increasing medical sophistication I don’t think it’s realistic to expect that the current levels of spending can be maintained.
“I would like to see the dividend of leaving the European Union devoted to the health service.”
But Mr Rees-Mogg urged the Chancellor to spend carefully given the Treasury’s continuing annual deficit.
“This is not the time to start spending money like there is no tomorrow,” he warned.
Dozens of other Tory MPs are understood to have lobbied Treasury ministers to press for extra cash on public services.
Mr Hammond yesterday insisted he will not announce any significant tax or spending measures tomorrow, indicating that the next key decisions will be made in his autumn Budget.
But he acknowledged that nearly eight years of spending restraint under David Cameron and Theresa May’s governments meant that debt was at last falling as a percentage of GDP.
“There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years. That is a very important moment for us but we are still in the tunnel at the moment,” he told BBC One’s The Andrew Marr Show. “We have a debt of £1.8trillion – 86.5 per cent of our GDP. All the international organisations recognise that is higher than the safe level. “This isn’t some ideological issue. It is about making sure that we have the capacity
to make sure that we can respond to any future shock to the economy.
“There will be economic cycles in the future. We need to be able to respond to them without taking our debt over 100 per cent of GDP.”
Economists expect the Chancellor will announce Government borrowing is set to be around £7billion lower in 2017-18 than had been predicted when he unveils the forecasts from the Office for Budget Responsibility.
The Treasury is expecting to have about £10billion more to spend than previously thought due to an increase in tax revenues.
Mr Hammond yesterday insisted he would retain a “balanced” approach and not go on an uncontrolled spending spree.
He is expected to pinpoint some areas of public spending that could be in line for more cash.
He said: “What I will be doing is signalling some areas where we want to consult ahead of the Budget in the autumn,” he said. “If there is the flexibility we will decide in the autumn how we are going to use that but we will continue to take a balanced approach, addressing the debt problem, reducing taxes for hard working families and putting money into our public services.”
SPLENDID news that the country’s debt mountain is finally beginning to fall and it is probably expedient for Chancellor Philip Hammond to loosen the nation’s purse strings. There is certainly no shortage of areas in which money could be spent, not least education, housing and the NHS. But in the giddy rush of exhilaration that a spending splurge so often provokes, there should also be caution. Wherever the money goes the Government must ensure that it is money well spent.
At the moment a kind of unreal atmosphere exists at Westminster. The real fear exists among the Conservative Party and further afield that Jeremy Corbyn and his Marxist acolytes could actually manage to win the next election and get into Number 10.
That in part is because of his pie-inthe sky approach to economic management: to seize on any area of voter discontent is to throw money at it, as he did so memorably and successfully with his unachievable promise to write off student loans.
The Tories must resist the temptation to do the same. Yes, there are areas that require greater public spending but that does not mean they should start hurling money around like a sailor on shore leave. One of the Conservatives’ greatest strengths is their reputation for financial prudence. It would be foolish to throw that away now.