Chan­cel­lor hints at ‘eas­ing off’ on aus­ter­ity

The Guardian - - NATIONAL POLITICS - An­drew Sparrow Po­lit­i­cal cor­re­spon­dent

The chan­cel­lor, Philip Ham­mond, sig­nalled yes­ter­day that the gov­ern­ment would ease up on its aus­ter­ity pro­gramme, say­ing the Con­ser­va­tives were “not deaf” to the mes­sage of the elec­tion re­sult.

In in­ter­views in which he also crit­i­cised Theresa May’s team for sidelin­ing him dur­ing the elec­tion cam­paign, Ham­mond said he ac­cepted that “peo­ple are weary of the long slog”. But he in­sisted that, with the deficit still at 2.5% of GDP, gov­ern­ment bor­row­ing was “not sus­tain­able in the long term” and he left open the pos­si­bil­ity of rais­ing taxes to fund more gen­er­ous pub­lic spend­ing.

Asked whether he would go ahead with £3bn of cuts to lo­cal gov­ern­ment fund­ing, he replied: “We’ve set out a se­ries of mea­sures that are al­ready leg­is­lated for. We have other pro­pos­als that we will now have to look at again in the light of the gen­eral elec­tion re­sult and in the new par­lia­ment. I will be de­liv­er­ing a budget in the au­tumn and you will find out then what we are propos­ing. There’s not go­ing to be a sum­mer budget or any­thing like that.”

Pressed on whether the gov­ern­ment would have to change di­rec­tion, par­tic­u­larly if it did a deal with the Demo­cratic Union­ist party (DUP), which is op­posed to cuts to the win­ter fuel al­lowance and the end of the triple lock on pen­sions, he replied: “We will look at all th­ese things. Ob­vi­ously we are not deaf. We heard a mes­sage last week in the gen­eral elec­tion and we need to look at how we deal with the chal­lenges we face in the econ­omy.

“I un­der­stand that peo­ple are weary af­ter years of hard work to re­build the econ­omy af­ter the great crash of 200809, but we have to live within our means.

“We have never said we won’t raise some taxes. We are a gov­ern­ment that be­lieves in low taxes and we want to re­duce the bur­den of taxes over­all for work­ing fam­i­lies.”

Speak­ing on the An­drew Marr Show and Pe­ston on Sun­day, Ham­mond stressed that he had al­ready taken some steps to re­lax the aus­ter­ity pro­gramme set by his pre­de­ces­sor, Ge­orge Os­borne. He said that when he be­came chan­cel­lor last sum­mer he had pushed back the tar­get date for get­ting the budget into sur­plus “into ef­fec­tively the mid­dle of the next decade”.

Ham­mond played a rel­a­tively low-key role dur­ing the Con­ser­va­tive elec­tion cam­paign, with May re­fus­ing to con­firm that she would keep him as chan­cel­lor.

In a sign of new con­fi­dence, he said: “We didn’t put enough en­ergy into dis­man­tling Jeremy Cor­byn’s eco­nomic pro­pos­als … We will now do that ... which I would like to have done dur­ing the cam­paign.”

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