Chancellor: UK economy facing ‘sharp challenge’

BUDGET: Pledge to help families ‘just about managing’

Chancellor Philip Hammond will attempt to help “just about managing” families in the Autumn Statement but cautioned those expecting giveaways that the economy is facing a “sharp challenge”.

Mr Hammond said Wednesday’s mini-Budget would support people “who work hard and by and large do not feel that they are sharing in the prosperity that economic growth is bringing to the country”.

Campaigners have called on the Chancellor to reverse George Osborne’s cuts to universal credit (UC), which critics say will leave precisely those working families up to £1,300 worse off by 2020.

But Mr Hammond warned that he needs “headroom” in the public finances to deal with the economic impact of Brexit with forecasts predicting slower growth and “eye-wateringly” large debt.

Asked if he would reverse the UC cuts, the Chancellor told BBC One’s Andrew Marr Show: “I’m not going to go into details of the Autumn Statement that I shall make on Wednesday but you’ve seen the forecasts, the range of independent forecasts, we’ll get the OBR’s forecast on Wednesday.

“Many of those forecasts are pointing to a slowing of economic growth next year and a sharp challenge for the public finances.

“There are a range of reasons for that and we’ve got to make sure that what we do is responsible, that everything we do is compatible with building resilience in our economy as we go into a period where there will be some uncertainty around the negotiation over our exit from the EU, and focus on making sure that our economy is match-fit for the opportunities and the challenges that will lie ahead.”

Mr Hammond added: “I want to make sure that the economy is watertight, that we have enough headroom to deal with any unexpected challenges over the next couple of years and most importantly, that we’re ready to seize the opportunities of leaving the European Union.”

Also appearing on the Andrew Marr Show, shadow chancellor John McDonnell urged Mr Hammond to reverse cuts to UC alongside reductions in disability benefits that will leave some claimants £30 a week worse off.

“That will be a first stage and I’m hoping the Government will do that on Wednesday. If they don’t, we will,” Mr McDonnell said.

Picture: Getty Images. Chancellor of the Exchequer Philip Hammond, left, and shadow chancellor John McDonnell have an exchange of views on the Andrew Marr Show.