Budget news: Philip Hammond's claim that 'austerity is coming to an end' faces fierce scrutiny

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Budget 2018: the 6 biggest announcements

Philip Hammond's pledge that "austerity is finally coming to an end" has faced fierce scrutiny from MPs and economists delivering their verdict on the Budget.

The chancellor sought to strike an upbeat tone with a multi-billion pound giveaway on Monday, which included early tax cuts for millions of workers, minimum wage rises and the decision to plough some £1bn into the troubled universal credit scheme.

However respected economic thinktank, the Institute for Fiscal Studies (IFS), said Mr Hammond had taken a "gamble" with the public finances, which could lead to higher borrowing and debt.

Experts from the Resolution Foundation also ran the rule over the Budget, warning that low and middle-income families would be hit hardest by the measures.

Meanwhile, John McDonnell became embroiled in a row when he stood by his support for the chancellor's tax cuts for the middle classes in the face of criticism from his own party.

The shadow chancellor said he would not reverse changes that benefit higher earners because people like head teachers have had a "rough time" in recent years.

But Labour MPs said the move was wrong, and condemned him for supporting the wealthy while there are "people dying on British streets".

If you want to follow our coverage as it happened, see the updates below

Key Points

• Top economists cast doubt on the government's promise to end austerity
• Philip Hammond's income tax will 'overwhelmingly benefit' richer households
• Theresa May says calling a general election 'not in the national interest'
• Austerity to continue for five more years if Britain leaves EU with no deal, Hammond warns
• Chancellor ploughs £1bn into troubled universal credit scheme blamed for increasing food bank use and destitution

[30 October 2018 11:28 · Lizzy Buchan]

The EU centre-left parties look on course to win less than 20% of the vote across the continent in the upcoming European Parliament elections, a record low for the EU’s social democrats.

More here: 

[30 October 2018 11:55 · Lizzy Buchan]

Here's what is on the agenda in the Commons today. The Budget debate is expected to kick off at around 12.45pm.

[30 October 2018 12:09 · Lizzy Buchan]

Leicester City-supporting MPs have expressed their sympathies and commemorated the life of club owner Vichai Srivaddhanaprabha by tabling motions in the House of Commons.

Labour former minister Keith Vaz and Northern Irish MP Jim Shannon led the parliamentary tributes in response to the helicopter crash near the King Power Stadium which killed five people, including the 60-year-old Thai billionaire.

Mr Shannon's motion, signed by three DUP colleagues and four Labour MPs, thanked Mr Srivaddhanaprabha for the success he brought to the Foxes and his contribution to community projects.

Mr Vaz, MP for Leicester East, supported Mr Shannon's remarks while also putting forward a separate motion to recognise Mr Srivaddhanaprabha's "unshakable belief, drive and vision" which helped Leicester win the Premier League in the 2015/16 season.

[30 October 2018 12:29 · Lizzy Buchan]

John McDonnell has come under fire from within Labour ranks after backing Philip Hammond's income-tax cuts for millions of people.

The shadow chancellor said the party would respect changes to tax thresholds that would cost £9.5bn in lost revenue in the next six years.

Instead, it would focus on creating a "fair taxation system" clamping down on evasion and avoidance and rolling back cuts to corporation tax, he told BBC Radio 4's Today.

The Resolution Foundation think tank had said earlier its analysis showed the tax cuts would "overwhelmingly benefit richer households", with almost half (45%) set to go to the top 10% of households alone.

The cuts were criticised as "tax cuts for the rich" by shadow foreign secretary Emily Thornberry on Monday and former Labour minister Andy Burnham.

Responding on Twitter to comments made by the shadow chancellor, Mr Burnham, now mayor of Greater Manchester, wrote: "At a loss to understand why we are doing this."

Torsten Bell, director of the Resolution Foundation, added: "Labour says it will support the income tax cuts announced yesterday - almost half of which goes to the top ten per cent of households alone.

"Nearly 90% goes to the top half. Not a good idea."

[30 October 2018 12:40 · Lizzy Buchan]

Our friends at i100 have really enjoyed covering Jeremy Corbyn's appearance at the Pride of Britain awards last night, where he met reality star Gemma Collins.

[30 October 2018 12:50 · Lizzy Buchan]

In Foreign Office questions, Jeremy Hunt has been forced to clarify that he had "no prior knowledge" of a plot to murder journalist Jamal Khashoggi following reports that British intelligence services were aware three weeks before the incident.

Mr Khashoggi, who had been an outspoken critic of the crown prince, was killed in Saudi Arabia's consulate in Istanbul on October 2.

Saudi Arabia initially denied all knowledge of the journalist's fate but the Saudi public prosecutor has since described it as premeditated murder organised by "rogue agents".

Reports on Sunday suggested that MI6 had discovered the plot and had warned Saudi Arabia to cancel the mission.

Responding to a question from Labour MP Gill Furniss, the foreign secretary said: "I hope she will understand that I don't comment on intelligence matters, but if it reassures her I had absolutely no prior knowledge myself of the terrible Khashoggi murder and was as shocked as I think everyone else."

Shadow foreign secretary Emily Thornberry also pressed him to answer, saying: "If the allegations in this weekend's report are true they are extremely serious, it was reported in early September that our intelligence services became aware of the Saudi plan to abduct Jamal Khashoggi and on October 1 they knew that a Saudi team had been dispatched to Istanbul for that purpose.

"Now I hear what the Foreign Secretary has said, that he didn't know, but did the intelligence services know and has he asked them?"

Mr Hunt responded: "I have to repeat what I said to her and I'm sure she will understand that it isn't possible for a Foreign Secretary or indeed any minister to comment on intelligence matters for very obvious reasons.

"I didn't know about this attack, it's very important that she understands that and this House understands that, and we are as shocked as everyone else about what happened."

[30 October 2018 13:05 · Lizzy Buchan]

MPs have moved onto the second day of Budget debate, where they will offer close scrutiny to the chancellor's spending plans.

Shadow chancellor John McDonnell says the prime minister 'raised the hopes' of teachers, police officers, councils when she promised austerity was over in her Conservative conference speech.

'Those hopes were dashed. At best, they got what the chancellor described as ‘little extras’. No wonder there are so many teachers, police officers, local councillors who feel bitterly disappointed at the PM's broken promise. 

'Because yesterday’s budget was not the end of austerity. Even with yesterday’s Budget, two thirds of the planned welfare benefit cuts will still be rolled out.

'Outside of the NHS, departmental budgets are flat. And the Resolution Foundation this morning revealed that some departments face a further 3% cut in their budgets by 2023.'

[30 October 2018 13:11 · Lizzy Buchan]

Breaking news - The government’s claim that austerity for the public sector is “coming to an end” have been cast into doubt by the Institute for Fiscal Studies, in a blow for the Chancellor Philip Hammond.

Our Economics Editor Ben Chu has filed this report from a briefing from the respected thinktank.

[30 October 2018 13:24 · Lizzy Buchan]

[30 October 2018 13:32 · Lizzy Buchan]

Back in the Commons, health secretary Matt Hancock is answering for the government.

He says 'careful stewardship' of the economy has allowed the government to splash out in the Budget. He accuses Labour of coming up with 'no new ideas and simply talking Britain down'.

Pressed on the cuts to capital and public budgets in the Commons, health secretary Matt Hancock said he could guarantee £20.5bn for the NHS.

"It is the biggest increase in any spending commitment for any public service in the history of this country - and it's a pity the leader of the opposition doesn't want to hear about it."

He went on: "This is not government money, this is not NHS money, this is the hard-earned money from taxpayers and we need to make sure it is spent wisely."