Chancellor set to create £60bn war chest to help country cope with Brexit fallout
forecast that Britain’s economy will grow by 1.6 per cent this year, up from 1.2 per cent it was predicting in November.
The Office for Budget Responsibility, the official fiscal watchdog, is today expected to say that borrowing figures will return to pre-referendum levels, raising its forecast from 1.4 per cent to 2 per cent.
Mr Hammond is expected to use the proceeds of the economy’s stronger growth and lower borrowing to build a Brexit war chest worth up to £60 billion to help Britain cope with economic turbulence as it leaves the EU.
Allies of Mr Hammond said that he would be upfront about the scale of tax rises and spending cuts. “He doesn’t want to be accused of stealth tax rises or hidden spending cuts like George Osborne,” one said. “He will be transparent.”
In one of the few giveaways, Mr Hammond will use his Budget to offer hundreds of millions of pounds in re- lief to high street traders facing huge hikes in business rates.
In the run-up to the Budget, the Government prompted a revolt by Conservative MPs and small businesses with the first change to business rates in a decade.
The new rates, which take effect in April, will see companies paying rates that have been calculated to take into account the rise in property prices since 2008.
It means many businesses in the South East will face soaring rates while others in areas where high street rental prices have fallen will benefit.
The Chancellor’s room for giveaways is limited because he is already committed to significant tax and spending promises made by Mr Osborne.
Next month, for example, the personal allowance, the amount people have to earn before paying tax, will rise by £500 to £11,500 for the 2017-18 tax year.
The threshold at which people begin to pay the higher rate of income tax will rise from £43,000 to £45,000.
Ministers should invest in existing grammar schools rather than creating new ones, head teachers have said. Many school leaders have hit out at the Prime Minister for setting aside millions in the Budget to build a new generation of selective schools, as they warn that existing institutes are on the “cusp of viability”.