Budget 2018 - LIVE: Hammond announces end to PFI and ploughs extra £1bn into troubled universal credit

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Budget 2018: Philip Hammond says 'era of austerity is finally coming to an end'

Philip Hammond has reiterated Theresa May's claim that the era of austerity is "finally coming to an end" in his last pre-Brexit Budget.

The chancellor unveiled a new "UK digital services tax" aimed at tech giants, which are profitable and generate at least £500m a year in global revenues.

Promising a Budget for "Britain's future", Mr Hammond also earmarked an extra £1bn for the Ministry of Defence and set out the government's plan for the NHS, including £2bn per year for mental health services.

In addition, he said the government would never sign another private finance initiative (PFI) deal, long criticised for locking the taxpayer into hugely expensive infrastructure contracts that enrich private firms.

He also promised an additional £1bn for the implementation of universal credit, which also faces widespread criticism for pushing vulnerable people into homelessness and food bank dependency.

See below for live updates

Key Points

• Chancellor declares 'austerity is finally coming to an end' as he announces billions in extra public spending
• Boosts for Minister of Defence of £1bn and £2bn for mental health... 
• ...with new digital services tax aimed at tech giants
• Hammond forced to plough extra £1bn into implementing universal credit
• Jeremy Corbyn hits out at government over 'broken-promise Budget' 

[29 October 2018 18:41 · Lizzy Buchan]

There has been a mixed response from business leaders to the Budget.

The Institute for Directors said it had "individual positive measures" but ultimately, "this was a Budget that pulled its punches".

Director general Stephen Martin said: “Going into this Budget, IoD members urged the Chancellor to prioritise help for Brexit preparations. It is not enough simply to announce a potential ‘no-deal Brexit budget’, businesses need to get ready now.

"While we hope the Chancellor’s confidence that there will be Brexit deal is well-placed, firms have to look at all possible scenarios and will be deeply disappointed to see no funds have been allocated to helping them map out potential outcomes.

“The Chancellor also acknowledged the scale of the productivity challenge, but most of the measures announced today were too small to even make it into the main speech.”

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), praised the chancellor for listening to business amid "an atmosphere of unprecedented uncertainty and heightened political noise".

He said: “The Chancellor responded directly to the BCC’s calls for bold incentives to turbo-charge business investment, for steps to support high street businesses struggling with business rates, and for measures that cut the cost of apprenticeships for SMEs.

"Philip Hammond has sent important and positive signals to businesses across the UK, many of whom have been wavering on investment and hiring.

"Crucially, the Chancellor has avoided major increases to business tax to fund the government’s spending priorities, which would have undermined the confidence boost to firms from his commitments to supporting enterprise and growth." 

But Carolyn Fairbairn, CBI Director-General, said: “This was a rock-solid budget, bringing more treats than tricks for business.

“It recognises the enormous contribution enterprise has made to balancing the UK’s books through jobs, pay and tax and responds to many of the recommendations that firms have made. 

“But while the Chancellor has reduced some of biggest barriers to growth, he has missed some opportunities.

“That said, the new investment in broadband, research, housing and infrastructure will help tackle the UK’s glaring regional equalities head on."

[29 October 2018 18:50 · Lizzy Buchan]

Indy columnist Jane Merrick said this was "an electioneering Budget without an election, the start of a phoney war campaign which could end in the country going to the polls yet again."

Read her column here:

[29 October 2018 18:52 · Lizzy Buchan]

ITV's Robert Peston has a similar thought about the prospect of another election.

[29 October 2018 19:09 · Lizzy Buchan]

"Thanks to ‘feel good Phil’, [Middle England] will feel the benefit of higher tax allowances and the freezing of fuel duty," writes the Indy's Sean O'Grady.

He says: "The upshot? The squeezed middle – or whatever other tribal epithet is used to describe them – will be that little bit more likely to put an X by the name of a Tory candidate."

Read his analysis here:

[29 October 2018 19:22 · Lizzy Buchan]

Jeremy Corbyn’s problem is he had he had to reply to a Budget speech John McDonnell could have delivered, says Indy chief political commentator John Rentoul.

[29 October 2018 19:40 · Lizzy Buchan]

Green campaigners are angry after Philip Hammond appeared to "go cold" on the latte levy, which would ban plastic cups.

Friends of the Earth plastic campaigner Julian Kirby said: “It’s astonishing that the Chancellor has gone cold on a ‘latte levy’, just when we needed him to turn up the heat on plastic polluters.

“A tax on virgin plastic packaging would be a welcome step – but if we’re going to stem the huge tide of plastic waste pouring into UK waterways every year, far bolder action is needed.”

 Liberal Democrat MP Alistair Carmichael said: “It is bitterly disappointing that the Chancellor has abandoned the Government’s commitment to introduce a levy on plastic cups.

“It proves the Tories are full of hot air and no credible action. It also proves what I have said all along, that headlines are more important to them than the environment.

“Our environment deserves better. Liberal Democrats will continue to fight for a ban all single-use plastic within three years, the introduction of a levy on all producers and retailers that produce or use single-use plastics and the introduction of a latte levy."

Green MP Caroline Lucas said it was "the most nature-depleted Budget in decades" and accused Mr Hammond of abandoning "the pretence of caring about our natural world".

"Two weeks ago, the world’s top scientists warned we have just 12 years to prevent climate catastrophe – so today we urgently needed an emergency budget with major investment in green energy and jobs to protect the planet. It's unforgivable that Philip Hammond failed to even mention climate change.

"It's not clear what planet Philip Hammond is living on – but it is his responsibility to do something to protect those of us living on this one. His deluded Budget was built on a fantasy future where the technical revolution will solve all of society's problems."

[29 October 2018 19:56 · Lizzy Buchan]

Our Economics editor Ben Chu has run the rule over the Budget and written this piece on everything you need to know from it.

[29 October 2018 20:08 · Lizzy Buchan]

Labour's Chuka Umunna, a former shadow business secretary, says the Tories are striking the wrong balance between public services, innovation and investment.

Read his piece: