Britain could be back in black in 3 years
BRITAIN will be back in the black in just three years if Theresa May secures a Brexit deal with the EU, say experts.
The country will run a surplus of £6billion in 2021-22 thanks to a ‘deal dividend’ boosting the economy and tax receipts, claims research group Capital Economics.
Britain last ran a surplus in 200001, before Labour embarked on a debt-fuelled spending spree. The deficit hit a record £153billion in 2009-10, but fell to £39.8billion last year under the Tories. The upbeat projections from Capital Economics come as the Treasury watchdog prepares to admit it was too gloomy about the outlook for Brexit.
The Government is on course to run a deficit of around £25billion this year – some £13billion less than predicted by the Office for Budget Responsibility in March. The expected deficit this year is also just over half the £46.5billion the watchdog forecast in the aftermath of the Brexit vote.
Leave campaigners said the OBR was ‘having to eat humble pie’. The brighter outlook is also a boost for Philip Hammond ahead of the Budget on Monday.
Capital Economics said that ‘the Chancellor couldn’t really have hoped for a more favourable fiscal backdrop as he presents his Budget’. In its report published yesterday, the group predicted that borrowing would fall from £25billion this year to £12billion next year and £2billion in 2020-21. It said Britain would then run a surplus of £6billion in 2021-22 and £10billion in 2022-23.
The group’s senior economist Ruth Gregory said: ‘If a Brexit deal is secured, the economy would probably outperform the OBR’s current gloomy expectations, providing a deal dividend.’
The report said that if there was no deal, Mr Hammond would have enough ammunition to launch an economic support package.
HALLELUJAH! Could it be that the Mail’s message is at last getting through to even the most uncompromising Tory saboteurs?
As this paper argued yesterday, they not only risk derailing the nation’s interests by their intemperate attacks on Theresa May. These zealots also alienate voters who admire her dogged efforts to strike a Brexit deal acceptable to all.
Indeed, International Trade Secretary Liam Fox – a firm believer, like this paper, in Britain’s hopes of prosperity outside the EU – put it succinctly when he declared his full support for the Prime Minister.
‘It’s very difficult to negotiate with the EU when we also have to negotiate with our own colleagues,’ he said.
Echoing Mr Fox, senior Tory Robert Halfon joined a growing chorus of rebuke to Brexiteers who have been quoted as wanting to stab Mrs May with a hot knife, or urging her to ‘bring her own noose’ to tonight’s meeting of backbenchers.
Such remarks brought ‘shame on the Conservative Party’, he declared. Meanwhile, former Home Secretary Amber Rudd spoke for countless loyal party members when she said threats to topple Mrs May were a ‘total indulgence’.
Indeed, even Andrew Bridgen, one of the most vociferous Brexiteers, appeared yesterday to backtrack on his previous support for a vote of no confidence in the Prime Minister. After reading the Mail’s front page, he suggested he didn’t seriously want to force a leadership challenge, but only to ‘raise the stakes’ over Brexit.
Yes, some remain as obdurate as ever. They include Stewart Jackson, David Davis’s former chief of staff, who disgracefully tweeted ‘what a pathetic cretin’ in response to an image of a child in a hospital bed, lying beneath an EU flag.
But this paper has high hopes that most Tory rebels, like the rest of the country, are coming to accept Mrs May’s plans as the best hope of securing an orderly withdrawal that keeps the UK intact and our trade running smoothly.
With a deal 95 per cent done – and Brussels at last seeking constructive ways to clear remaining obstacles – the economic rewards of an agreement will be vast. But if rebels wreck our chances by continuing their civil war, the only winner will be Jeremy Corbyn.