Brexit is ‘elephant in the room’ as Budget avoids giveaways and sticks to the plan

● Hammond avoids using the B-word but paints picture of ‘brighter future’ outside EU as he prepares UK for withdrawal

Philip Hammond said the government was building a “strong and stable platform” for Brexit negotiations with a conservative budget that avoided eye-catching giveaways while painting a picture of a “brighter future” outside the EU.

It was “the elephant in the room”, according to the SNP’S Stewart Hosie, but everything about Mr Hammond’s first budget as Chancellor suggested a government bracing for Brexit, even if he didn’t used the word once.

The Chancellor told MPS that the UK “cannot rest on our past achievements” and must “focus relentlessly on keeping Britain at the cutting edge of the global economy” with investment in skills and infrastructure. “The deficit is down, but debt is still too high,” he said.

“Employment is up, but productivity remains stubbornly low. Too many of our young people are leaving formal education without the skills they need for today’s labour market. And too many families are still feeling the squeeze, almost a decade after the crash.”

MPS were told the UK was heading into talks with Brussels with a fair wind behind it, as the Office for Budget Responsibility (OBR) sharply upgraded growth forecasts for 2017 from 1.4 per cent to 2 per cent.

In 2018 growth is forecast to slow to 1.6 per cent, before picking up to 1.7 per cent, then 1.9 per cent, and back to 2 per cent in 2021. Employment forecast to grow every year, with a further two-thirds of a million in work by 2021.

But the Chancellor warned that he would brace for Brexit “undeterred by any short-term fluctuations”, and said it was not the time for “more unfunded spending in the future”.

“Britain has a debt of nearly £1.7 trillion – almost £62,000 for every household in the country,” Mr Hammond said, adding: “We will not saddle our children with everincreasing debts.”

The OBR forecast that borrowing will be £58.3 billion in 2017/18, £40.8bn in 2018/19, then £21.4bn, £20.6bn in followingyears,reaching£16.8bn in 2021/22 - all lower than predicted last November.

Investment has been targeted at areas where the government believes it can increase productivity: pilot schemes for lifelong learning, funding for Phds in STEM subjects, and a shake-up of further education in England.

Labour accused the government of storing up problems for later. “We are the only major developed country in which economic growth has returned yet workers are worse off,” Jeremy Corbyn said, highlighting inflation that is set to remain above 2 per cent for the next three years. “Wages are still below the 2008 level.”

One issue that will still need to be resolved after Brexit is immigration, the OBR confirmed. It stuck to its assumption that immigration would only fall to 185,000 by 2021, despite Theresa May’s Brexit commitment to take Britain out of the single market, and her pledge to cut net migration to the “tens of thousands”.