Fox challenges Hammond to issue deadline for eliminating the deficit
Cabinet colleague urges Chancellor to set target date for balancing nation’s books to reassure investors
THE Chancellor should set a date for when Britain will eliminate the deficit to help “maintain the confidence of international investors”, Liam Fox has said.
The International Trade Secretary said that the Government must be “very clear” that it is still committed to balancing the books as Britain prepares to leave the European Union.
However Philip Hammond, the Chancellor, will today repeat his view that the decision to leave the EU means that there should not be a deadline for clearing the deficit.
Mr Fox was asked about a decision by Mr Hammond’s predecessor, George Osborne, to abandon the target to eliminate the deficit by 2020 following the Brexit vote.
He replied: “Given the wider eco- nomic context, I think it’s reasonable that the goalposts moved a little bit on that.
“But – here’s the very crucial element – we have to make it very clear that we are still committed to the elimination of our deficit in the future.”
Mr Fox added: “I know it’s not fashionable to be heaping praise on George Osborne and David Cameron at the moment but, in terms of our GDP, there was a two-thirds reduction in the value of that deficit over time.
“We have made considerable progress. Had we not made considerable progress you would not be getting the sort of lending rates that we are getting as a country at the present time.
“We have maintained confidence of international investors and George Osborne should be given a lot of credit for that.”
Mr Hammond will today use his speech at the Tory Party conference to promise to “restore fiscal discipline”.
However, he will not commit to restoring the deadline for eliminating the deficit, insisting that “when times change, we must change with them”.
The Chancellor will say: “A fundamental part of maintaining our global competitiveness is getting our public finances back in order. The deficit remains unsustainable.
“Piling up debt for our children and our grandchildren to pay off is not only unsustainable, it’s not fair.
“The British people elected us on a promise to restore fiscal discipline and that is exactly what we are going to do. But we will do it in a pragmatic way that reflects the new circumstances we face.”
Mr Hammond added that in the Autumn Statement in November he will “set out our plan to deliver longterm sustainability”, while “recognising the need for investment to build an economy that works for everyone”.
He is expected to announce a “fiscal reset” for the economy, which will involve borrowing billions of pounds to invest in infrastructure.
Mr Hammond has warned that British businesses are “angering their consumers” by not listening to the “mood
‘Piling up debt for our children and grandchildren to pay off is not only unsustainable, it’s not fair’
music” over issues such as executive pay and workers’ rights.
He told The Daily Telegraph last week that he plans to force firms to put workers on boards and clamp down on excessive pay for bosses.
The Chancellor warned that “demonstrations of popular sentiment” such as the EU referendum vote and the rise of Donald Trump in America show that voters will no longer accept “irresponsible” business practices.