Crisis? What crisis?
Chancellor snubs calls to help NHS, cops & schools
MILLIONS of public sector workers have been told to forget about a wage rise as the economy flatlines towards another likely recession.
Despite Tory Chancellor Philip Hammond’s promise of “light at the end of the tunnel” in his spring statement, economists, trade unions and the Government’s financial watchdog were united in gloom.
Economic growth, forecast at a revised figure of 1.5 per cent for this year, will leave the UK with joint weakest growth for G7 nations.
Hammond claimed this amounted to a bright outlook after almost a decade of austerity as he presented a scaled down statement to the Commons.
Hammond said the UK economy had reached a turning point which would allow him to loosen the purse strings – but not until the annual autumn budget statement in November.
The usually downbeat Chancellor delighted in telling the House of Commons that the 1.5 per cent growth forecast this year was 0.1 per cent higher than previously forecast.
The feeble figure is still more than double the Scottish Fiscal Commission’s forecast of just 0.7 per cent in Scotland.
Hammond said debt would fall as a share of GDP next year, which would be the start of “the first sustained fall in debt for 17 years, a turning point in the nation’s recovery from the financial crisis of a decade ago”.
Labour accused him of complacency and said the Tories had presided over the slowest recovery since the 20s, with real wages lower now than they were in 2010 when Labour left office. The independent financial watchdog, the Office for Budget Responsibility, forecast slow growth over the next five years and did not rule out Britain going back into the red as Brexit begins to bite.
The TUC said real wage growth in 2018 is forecast to be just 0.3 per cent and in 2022 wages will still be worth less than before the financial crisis 15 years earlier.
General secretary Frances O’Grady said: “This was not the jump-start the British economy needed.”
Brexit merited only two sentences in the statement, with £1.5billion set aside to deal with the consequences of leaving the EU.
The OBR estimated Britain’s financial settlement with the EU will cost £37.1billion.
The SNP’s Ian Blackford accused the Government of a “shameful” lack of Brexit preparation and warned crashing out of the EU could be an “economic catastrophe”.
The OBR predicted North Sea oil and gas is due to go back into the black, contributing just under £1billion a year in tax revenues over the next five years.
But they said changes to Scots tax rates will “generate very small cash giveaways to most but larger cash takeaways from a smaller number higher up the income distribution”.