AT LAST! TAX CUTS ON WAY
Cheery Chancellor signals the end of austerity with £15bn spending spree
PHILIP Hammond raised hopes of a bright future for Brexit Britain yesterday with tax cuts and extra cash for public services.
In an upbeat Spring Statement, the Chancellor declared that better-thanexpected growth meant there was finally “light at the end of the tunnel”. A rising windfall from Britain’s accelerating economy could give the Treasury £15billion extra by 2020-21 after nearly a decade of spending restraint.
Mr Hammond, left, hinted the NHS will be his top priority for increased spending but vowed to maintain a “balanced” approach.
The Chancellor insisted fresh spending announcements will be held back until his
autumn Budget, meaning households and public services will have to wait for at least a year to see any benefit from the Treasury’s windfall.
Britain was making “solid progress towards building an economy that works for everyone” he declared, while promising to help build “a country we can all be proud to pass on to our children”.
Mr Hammond’s 26-minute speech in the Commons yesterday was the first of his new Spring Statements drafted to update MPs on the latest official economic forecasts while leaving all tax and spending decisions until his autumn Budget.
To cheers from Tory MPs, he pointed out that the Treasury’s debt mountain had begun to fall at last.
He hailed the achievement as “a turning point in the nation’s recovery from the financial crisis of a decade ago”.
Mr Hammond also made a joke playing on his own reputation for pessimism.
Referring to characters from the Winnie-the-Pooh children’s stories, the Chancellor told MPs he had shed his “Eeyore” image and was feeling “Tiggerish”.
“If there are any Eeyores in this Chamber, they are over there,” he told MPs, gesturing at the Labour front bench. “I, meanwhile, am at my most positively Tigger-like.”
The extra cash would give him the “capacity to enable further increases in public spending and investment in the years ahead”, he said.
Mr Hammond went on to promise to share the windfall between “getting our debt down, supporting our public services, investing in our nation’s future, keeping taxes low, building a Britain fit for the future”.
The Chancellor indicated that tax and spending changes would come into effect in November.
He said: “I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted.”
Figures from the Office for Budget Responsibility, the Government’s financial watchdog, showed that the economy was motoring faster than forecast at his last Budget in November.
Growth last year was upgraded from 1.5 per cent to 1.7 per cent, while next year’s prediction for GDP expansion was raised from 1.4 per cent to 1.5 per cent.
Mr Hammond said the improved growth meant extra tax receipts and reduced borrowing for the Treasury.
He bullishly declared that he expected the economy to exceed the Office for Budget Responsibility’s targets.
He added: “Forecasts are there to be beaten. As a nation, we did it in 2017. And we should make it our business to do so again.
“We are forecast to meet our cyclically adjusted borrowing target in 2020-21 with £15.4billion headroom to spare.”
Mr Hammond promised that the windfall would not solely be used for repaying debt. The cheery Chancellor told MPs: “I do not agree with those who argue that every available penny must be used to reduce the deficit.”
Mr Hammond highlighted that, under his stewardship of the Treasury, an extra £9billion had been spent on the NHS and there was “more to come” if health unions and management can agree a new pay deal.
Further positive forecasts from the Office for Budget Responsibility predicted that 500,000 new jobs will be created in Britain by 2022.
Inflation is set to fall from the current 3 per cent to the Bank of England’s target of 2 per cent by the end of the year.