Billions for schools and hospitals
Economy is up 1.8%, with investment and spending at record highs
MINISTERS will pour billions more into schools and hospitals as Britain leaves the EU, Theresa May indicated yesterday.
Speaking on a whistle-stop tour of the four nations of the UK, the Prime Minister indicated the Government would go some way to meeting a Vote Leave pledge to boost spending on public services.
Boris Johnson and Michael Gove have urged the PM to devote the ‘Brexit dividend’ created by reduced EU contributions to pour resources into the NHS. Mrs May was reluctant to use the term ‘Brexit dividend’ – as substantial payments to the EU will continue during the transition period until 2020. However, she confirmed the Government is planning a significant increase in public spending.
‘When we leave the European Union we’re no longer going to be sending vast sums of money, year in and year out,’ she told the BBC. ‘So there will be money available for us to spend on our priorities – priorities like the NHS and schools.’
Mrs May revealed this week that she has agreed to Health Secretary Jeremy Hunt’s request to provide the NHS with a long-term funding settlement, which may see it receive billions more this year.
Yesterday she declined to say exactly how this would be funded and refused to rule out the possibility of an NHS tax, such as a 1p rise in National Insurance.
Mrs May’s tour was designed to fire the starting gun on the one-year countdown to Britain’s exit from the EU.
The PM said she was ‘looking forward’ to Brexit, saying: ‘I think it’s a bright future out there.’ Downing Street also confirmed Mrs May will take a short walking break in Wales over the Easter weekend. It was during a walking holiday in Snowdonia last Easter that Mrs May decided to call a snap election, leading to the loss of her majority.
WITH one year to go until we leave the EU, official figures last night showed the economy continues to prosper, with investment, spending and exports at record highs.
Making a mockery of the doom-laden warnings of the architects of Project Fear before the Brexit vote, the Office for National Statistics said GDP rose by 1.8 per cent in 2017.
Households and businesses increased spending to record levels, while exporters profited from booming demand worldwide for British goods. In a further boost, Chicagobased CME Group – one of the world’s biggest trading companies – announced plans for a new headquarters in London in a major vote of confidence in Brexit Britain.
The flurry of upbeat news is in stark contrast to the warnings of Remainers that a Brexit vote would crash the economy and trigger a City exodus, with firms fleeing to Frankfurt and Paris.
Just weeks before the referendum, then- chancellor George Osborne warned ‘ a vote to leave would represent an immediate and profound shock to our economy’.
He added: ‘ That shock would push our economy into recession and lead to an increase in unemployment of around 500,000.’
But with employment at a record high and unemployment at a 43year-low, Brexit supporters said those warnings are looking ‘increasingly ridiculous’. With just a year to go before Britain leaves the EU on March 29, 2019, ONS figures showed the economy grew by 1.8 per cent last year.
Although the slowest rate of growth since 2012, this was better than the 1.7 per cent previously reported and just a shade below the 1.9 per cent seen in 2016.
Meanwhile household spending rose 1.7 per cent to a record £1.2trillion, while investment rose by 4 per cent to a record £331.7billion – the strongest increase in the G7 industrialised nations.
Business investment rose by 2.4 per cent to a record £183.2billion, while exports also hit a record high – up 5.7 per cent to £559.1billion – as the weak pound and stronger global growth boosted demand for British goods and services
Manufacturing output rose 2.5 per cent to its highest level since 2007. The current account deficit – the gap between money leaving the UK and money coming in – fell from £113.6billion to £82.9billion, its smallest since 2011, suggesting foreign investors are still willing to pile money into the UK.
Brexit campaigner John Longworth, the former head of the British Chambers of Commerce business lobby group, said: ‘With just one year to go before Britain officially leaves the EU, the economy is riding high.
‘Investment and exports are hitting new heights and the consumer remains confident. Again the prospect of a great post Brexit future is confounding the wreckers and gloom-mongers who are looking increasingly ridiculous.’
Although household spending reached a record high, the 1.7 per cent rise last year was the slowest since 2011, as rising prices and subdued wage growth put pressure on family budgets.
But wages are once again rising faster than inflation, easing the squeeze on household finances.
Ruth Gregory, of Capital Economics, said: ‘Consumers remain pretty confident. With the real pay squeeze having already come to an end, and sustained rises in real wages now in prospect, consumer spending should soon be on a much more sustainable footing.’ Howard Archer, chief economic advisor to the Ernst & Young Item Club, said: ‘Growth in 2018 should be helped by the squeeze on consumers easing as the year progresses.’ In a major boost for the City, US trading giant CME yesterday agreed to buy London-based trading group Nex for £3.9billion. It announced its European hub will now be based in the City.
Nex founder Michael Spencer, who will join the CME board, said: ‘CME’s decision to choose London as its European headquarters is also a signal of tremendous support for Britain’s financial services sector.’
The deal came a day after a survey of 119 international finance firms revealed they plan to shift just 5,000 jobs out of London due to Brexit – far below the 75,000 predicted by the Project Fear campaign. Earlier this week, London was once again ranked the world’s leading financial centre. Frankfurt ranked 20th, with Paris 24th.
‘Gloom-mongers look ridiculous’