Budget ‘won’t lead to an early election’
PRIME MINISTER Theresa May has rejected suggestions that Chancellor Philip Hammond’s giveaway Budget was designed to pave the way for an early general election.
The Chancellor used Monday’s statement to announce a £100 billion loosening of the purse-strings, with income tax breaks for 32 million voters, help with business rates for the High Street, support for Universal Credit and the promise of increased public spending over the coming years.
The package prompted speculation that the Government was preparing the way for an early general election to provide Mrs May with a solid majority in the House of Commons as Brexit comes into effect in the spring.
Asked at a press conference in Oslo whether she was planning to ask voters to go back to the polls, Mrs May responded emphatically: “No. We are not preparing for another general election. That would not be in the national interest.”
Mrs May was in the Norwegian capital for the Northern Future Forum summit of north European states.
The Chancellor also insisted that his Budget tax cuts and spending hikes were not intended to woo voters ahead of an early poll.
Asked if the giveaway Budget was a marker for a possible general election, Mr Hammond said: “I hope not. What we are preparing for is Britain’s future.
“We’ve now turned a corner and we are able to give Britain a bit of good news.”
Shadow chancellor John McDonnell said the Budget could signal a general election ahead.
He said: “The Tories usually do this. If a general election is coming, what they’ll do is they’ll splash out some money and then if they win the election they then start cutting it back again.”
Mr McDonnell dismissed the Chancellor’s claim austerity is coming to an end as he insisted it is “rolling out still”. He said: “I think people will be crushingly disappointed at yesterday because it certainly wasn’t the end of austerity.”
Mr McDonnell said Labour would support tax cuts, but make the system fairer if the party won power.
Paul Johnson, director of the Institute for Fiscal Studies, said Mr Hammond had “got lucky” because tax revenues were better than expected.
He said: “He’s just simply decided to spend all of that. I think he has abandoned any idea of getting to budget balance by the mid-2020s.”
Mr Johnson said there were big increases in NHS spending over the coming years but “he hasn’t found any money” for other public services.
Mr Hammond insisted the deficit will decline in every year of the forecast period.
He said: “We retain an ambition to balance the budget.”
The Chancellor dismissed suggestions that he had chopped down the “magic money tree” and burnt the lot.
“You are painting a picture here that is designed to show that I’m abandoning fiscal rectitude,” he said. “I’m not.”