Hammond upbeat on growth and spending

Guardian News and Media London

Tuesday، 13 March 2018 11:41 PM

Philip Hammond promised Britain that “our best days lie ahead of us”, as he delivered an upbeat spring statement paving the way for a boost to public spending in the autumn.
Hailing a modest improvement in economic forecasts, and what he called a “turning point” in the public finances, the chancellor sought to shrug off his image as the Cabinet’s Eeyore, insisting he was, “at my most positively Tigger-like”.
He said if the public finances continue to improve, he could set aside more money for the public services – a potential increase in spending that could be seen as a pre-election warchest.
The chancellor said he would use the budget this autumn to set out his expenditure expectations for 2020 and beyond, with a full spending review next year, after Brexit.
If in the autumn the public finances continue to reflect the improvements outlined yesterday, he said the government would “have capacity to enable further increases in public spending and investment in the years ahead”.
Hammond’s statement was received with cheers on the Conservative benches, with MPs increasingly concerned about the pressures on their local public services, including the NHS.
The independent Office for Budget Responsibility predicted GDP growth of 1.5% this year, a slight improvement by just 0.1% from the previous estimate made in November. The OBR also said it expected public borrowing will be £45.2bn this year – about £4.7bn lower than was previously forecast.
The chancellor said the latest estimates, which show public debt as a share of GDP falling for the next five years, showed the country was at a turning point, a decade on from the financial crisis.
“(There is) light at the end of the tunnel. Another step on the road to rebuilding the public finances decimated by the party opposite,” Hammond said.
John McDonnell, the shadow chancellor, gave a robust response to the speech, criticising what he called the “indefensible spectacle” of a chancellor “failing to lift a finger” to help struggling local authorities and the NHS.
“(He) proclaimed that there is light at the end of the tunnel. But this shows just how cut off from the real world he is,” McDonnell said. His speech was repeatedly interrupted with loud jeers from the Conservative benches, which he dismissed as “Tory bully boys”.

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