Budget 2017: Philip Hammond sets out plan to steel Britain for Brexit

The Chancellor will use his first Budget to say he understands concerns over the future

Joe Watts
Political Editor
Tuesday 07 March 2017 23:37 GMT
Philip Hammond leaves Downing Street to deliver the Budget

Philip Hammond will set out a Budget to steel Britain for Brexit as he admits the public has deep-seated concerns over the country’s future.

In his first full Budget statement, the Chancellor will concede ministers must work to convince worried voters their children can thrive once Britain quits Europe.

Mr Hammond will also accept many families are still struggling 10 years on from the financial crash that crippled the county’s economy, even though seven of them have been under a Conservative-led government.

But the Chancellor will still use his statement in the Commons on Wednesday to try and give an upbeat assessment of the UK’s economic prospects, as Theresa May prepares to launch EU withdrawal talks.

It comes after Ms May’s hopes of securing smooth passage for her Bill to trigger Brexit, were dealt a blow when the House of Lords defied her and backed a plan to give Parliament, not Downing Street, the final say over any withdrawal deal.

Mr Hammond, meanwhile, was given something of a boost after the Organisation for Economic Co-operation and Development revised up its 2017 growth forecast for the UK, albeit still warning of a Brexit drag on the economy next year.

The Chancellor had already revealed he would set aside a Brexit war-chest of some £60bn by 2020 to help mitigate negative impacts of leaving the EU. Having also previously warned of a pending “roller-coaster ride” for the economy between now and then, his Budget will aim to calm the country ahead of uncertain times ahead.

He was to promise that the country the Government wants to build after Brexit will be “a stronger, fairer, better Britain, outside the EU”.

Philip Hammond says the great British fighting spirit will see the country forge global trade deals

But Mr Hammond was to add that he “understands the concerns of those who worry about their children’s ability to access the opportunities they themselves enjoyed, in our rapidly changing economy”.

He planned to tell MPs that “a strong economy is built on resilience” and that the Government will continue reducing the deficit, indicating on-going cuts, and “not shirking the difficult decisions on tax and spending, while still investing in Britain’s future”.

But the Chancellor will then say that he knows that “many are still feeling the pinch, almost 10 years on from the financial crash”.

Signalling potential help for cash-strapped households – including a possible further freeze on fuel duty – he was to promise the Government “will do everything it can to help ordinary working families”.

The Chancellor has already set out some planned spending aimed at boosting young people’s education, including £500m for a technical education overhaul and £320m for more free schools, many of which may be selective following on from Ms May’s pledge to roll out grammar school places.

He has also promised a £1.3bn cash boost for social care with councils across the country complaining that the system for looking after the elderly and the disabled is at breaking point.

But his statement comes just weeks before Ms May is expected to trigger Article 50, bringing with it potential economic uncertainty and the prospect of rising prices.

The OECD revised up its 2017 growth forecast for the UK due to a less severe impact from Brexit than it previously anticipated, in a report on Tuesday.

But the 2018 forecast for UK growth of 1 per cent is lower than the rest of the G7, excluding Japan and Italy, with Brexit thought to be a key factor.

The meagre 2018 rise is also the weakest performance from the UK since the depths of the global financial crisis in 2009, with the report stating: “UK growth is expected to ease further as rising inflation weighs on real incomes and consumption, and business investment weakens amidst uncertainty about the United Kingdom’s future trading relations with its partners.”

Brexit also gave the Prime Minister a headache on Tuesday after peers approved a plan to give Parliament the final say over Brexit.

Lords voted by a large majority for the proposal forcing Ms May to seek Parliament’s backing for any withdrawal deal she agrees with the EU, and also if she decides to see through her threat of pulling Britain out of the EU with no deal at all.

Brexit Secretary David Davis vowed to overturn the changes to the Government’s Bill to trigger Article 50 when it returns to the House of Commons.

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