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13-03-2018

LIVE: Philip Hammond delivers spring statement

Philip Hammond
Image: Philip Hammond is not expected to announce any changes to tax and spending

KEY POINTS:

  • Philip Hammond delivers spring statement
  • Upgraded growth forecasts
  • Predicted falling debt and borrowing
  • Chancellor declares 'light at end of tunnel'
35 posts
812 people listening
moderator14:31

14:31 Lib Dems: Spring statement a 'non-event'

Responding to the spring statement, Liberal Democrat leader Sir Vince Cable says: “The spring statement was a non-event.

"The OECD gave us the clearer picture - that the economy is bumping along the bottom of the G20, well behind the likes of Australia, Canada and the Euro area.

"The OBR’s fresh forecasts are still a long way behind the figures estimated in March 2016 before the EU referendum. 

“It is time the Government was honest with the public: there will need to be tax increases to pay for the NHS and social care, police and schools.

"This is why the Liberal Democrats have advocated a penny in the pound income tax increase for health and care and why we must scrap cuts in Capital Gains Tax and Inheritance Tax introduced since 2015.”

13:46 'Hardly a high-fiving moment'
13:42 Hammond praised for 'not turning on spending taps'

John O’Connell, chief executive of the TaxPayers’ Alliance, says: "The Chancellor is to be commended for resisting irresponsible calls from across the political spectrum to turn on the spending taps for the time being, but he must continue to do so at the budget later this year.

"It's also encouraging that he managed to resist the temptation to mess around with the tax system and throw money we don't have at vanity projects and interest groups as most of his predecessors have.

"There were lots of warm words about job creators and taxpayers in this statement, but if the Chancellor is to beat the forecasts as he made clear he wants to, his rhetoric needs to be followed by actions.

"The country needs tax cuts and pro-growth policies, not reheated spending gimmicks and a consultation on plastic taxes."

13:40 Remainer MP: Worst years since war thanks to Brexit

Commenting on the spring statement, Labour MP Chuka Umunna - a supporter of the pro-EU Open Britain campaign - says: "The Chancellor and this Government are presiding over what promises to be the worst five years for our economy since the war and all thanks to Brexit.

"Today he confirmed that growth will be far slower over the coming years than was being forecast two years ago.

"The Brextremists promised us an additional £350m for the NHS paid for out of our contributions to the EU yet we now know that if Brexit goes ahead we’ll be paying money to the EU until 2064 and there won’t be an extra penny for our heath service.

"As the economic cost of Brexit continues to bite, with falling real wages, slow growth and high inflation, and a huge divorce bill in return for a worse relationship with the EU, we are all entitled to ask whether this is the right path for the country."

13:38 Not much forecast change in borrowing since November

13:27 £20bn improvement in borrowing and stronger productivity

13:25 UK forecast to pay into EU coffers until 2063

13:25 Brexit planning spend revealed 
 
13:23 Shadow chancellor bemoans 'another missed opportunity'

McDonnell continues: "Today’s statement could have been a genuine turning point but it is – depressingly - another missed opportunity.

"People know that austerity was a political choice - not an economic necessity.

"The Conservatives chose to cut taxes for the super-rich, corporations and bankers - paid for by the rest of our society.

"They even cut the levy on the bankers in last month’s Finance Act. We were never all in this together as they claimed.

"They cut investment at the very time when we should have been developing the skills and infrastructure needed to raise productivity and grasp the tech revolution with both hands.

"And when they have a responsibility to meet the challenge of Brexit, we have a Chancellor who this weekend admitted he hasn’t even modelled the government’s Brexit options.

"Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while refusing to lift a finger as Councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled, and wages are falling.

"This isn’t a Government that’s preparing our country for the future."

13:20 Labour's McDonnell responds to Hammond 

13:19 Hammond: 'We're building a country we can all be proud to pass on to our children'

Ending his statement, Hammond says: "We are delivering on our plan with a balanced approach, restoring the public finances, investing in our economy and our public services, raising productivity through our modern industrial strategy, building the homes our people need, tackling the environmental challenges that threaten our future, embracing technological change, seizing the opportunities ahead as we build our vision of a country that works for everyone.

"An economy where prosperity and opportunity are in reach of all, wherever they live, whatever their gender, colour, creed or background.

"Where talent and hard work alone determines success. A beacon of enterprise and innovation. An outward-looking free trading nation.

"One that is confident our best days lie ahead. A force for good in the world. A country we can all be proud to pass on to our children."

13:10 Full borrowing forecasts

The Chancellor didn’t give all the borrowing number forecasts in his speech.

Here they are…

2017/18 £45.2bn (down from £49.9bn forecast in November)

2018/19 £37.1bn (£39.5bn)

2019/20 £33.9bn (£34.7bn)

2020/21 £28.7bn (£32.8bn)

2021/22 £26.0bn (£30.1bn)

2022/23 £21.4bn (£25.6bn)

13:09 Government announces allocations for Brexit planning and apprenticeship funding

13:06 Hammond tries to tackle productivity

The Chancellor announces he will bring forward the next business rates evaluation to 2021.

He also says the Government will launch a "call for evidence to understand how best to help UK's least productive businesses" and to tackle the "continuing scourge of late payments".

13:02 GDP growth over next five years
13:00 Hammond hopes for public spending boost in autumn

Confirming there will be a "detailed spending review in 2019", the Chancellor says: "That is how responsible people budget. First you work out what you can afford, the you decide what your priorities are, and then you allocate between them.

"If, in the autumn, the public finances continue to reflect the improvements that today's report hints at then, in accordance with our balanced approach, and using the flexibility provided by the fiscal rules, I would have capacity to enable further increases in public spending and investment in the years ahead."

12:56 Chancellor sees light at end of the tunnel

12:55 Hammond hopes for pay rise for NHS staff

The Chancellor repeats his Budget promise of a pay rise for NHS staff "if management and unions reach pay modernisation deal".

12:54 Hammond: Judge me by record

Hammond says the Government will continue to pursue a "balanced approach".

He says he will ignore those who say "every available penny must be used" to reduce the debt, but also will resist those who say money should be "spent immediately".

Hammond says: "Judge me by my record."

12:51 Hammond's good news 

12:47 GDP growth still very sluggish
 
12:46 Hammond: 'Light at the end of the tunnel'

Hammond says: "There is indeed light at the end of the tunnel. But we’ve got to make absolutely sure it isn’t the shadow chancellor’s train hurtling out of control in the other direction."

12:44 Hammond says debt and borrowing revised down

Hammond says the OBR "expect inflation, which is currently above target at 3% to fall back to target over the next 12 months."

He adds the OBR also "further revises down debt and borrowing in every year".

The Chancellor says: "Borrowing is now forecast to be £45.2bn this year, £4.7bn lower than forecast in November. And £108bn lower than in 2010."

He adds: "As a percentage of GDP, borrowing is forecast to be 2.2% in 17-18, falling to 1.8% in 18-19, 1.6% in 19-20, then 1.3%, 1.1% and finally 0.9% in ‘22-‘23."

Hammond says this means in 2018/19 "we will run a small current surplus, borrowing only for capital investment".

12:39 Hammond sets out growth figures

He says: "The economy grew by 1.7% in 2017, compared to 1.5% forecast at the Budget.

"And the OBR have revised up their forecast for 2018 from 1.4% to 1.5%.

"Forecast growth is then unchanged at 1.3% in 2019 and 2020, before picking up to 1.4% in 21 and 1.5% in 2022."

The Chancellor notes these are Office for Budget Responsibility forecasts, and adds: "forecasts are there to be beaten".

12:36 Hammond: I am Tiggerish today

Hammond adds another joke, as he mocks his nickname of "Eeyore" among Tory MPs.

Pointing to the Labour benches, he says: "If there are any Eeyores in the chamber, they are over there.

He adds: "I am Tiggerish today."

12:32 Hammond begins his spring statement

The Chancellor opens with a joke, saying he won't be presenting a red book today... but "can't say the same for the shadow chancellor".

John McDonnell once famously produced Chairman Mao's Little Red Book in response to George Osborne's Autumn Statement.

12:31 Fiscal outlook 'deteriorated a lot' since March 2016

Paul Johnson, director of the Institute for Fiscal Studies, provides some caution over borrowing figures...

12:25 Hammond: 'Light at the end of the tunnel'

Before heading to the House of Commons, the Chancellor told this morning's Cabinet meeting: "Thanks to the hard work of the British public there is light at the end of the tunnel."

12:22 UK in the slow lane for economic growth forecasts
12:20 Hammond leaves Number 11 for the House of Commons
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12:05 Labour call on Hammond to 'end austerity'

Shadow chancellor John McDonnell has said: "Today the Chancellor has a choice. He can choose to act and end the misery faced by many, or he can do nothing and continue to favour a privilege a few.

"Our public services are at breaking point and many of our local councils are near bankruptcy.

"He needs to listen to the calls from across the political spectrum, including the Tory council leader in his own constituency - to end the financial crisis in our public sector.

"Philip Hammond must use today to act and end austerity. Our country cannot afford for him to continue to ignore the problems facing working households in our country.

"If his statement is one of boastful self-praise and not a recognition of the devastation faced by many in our country then he will have failed.

"If the Chancellor refuses to act, then the next Labour government will end austerity and build a high wage, high skill economy for the many, not the few."

11:56 Back in the black - but Hammond wants more belt-tightening

Sky News' Economics Editor Ed Conway has looked at how the Chancellor will try to resist his colleagues' calls for more public spending.

Read his full preview of the spring statement and how Hammond is attempting to manage the UK's debt...

11:52 But Chancellor already facing 'shambles'...

The launch of the new "millennial railcard" has been described as a "shambles" after the website for purchases crashed.

The card, which gives discounted rail travel to passengers aged 26 to 30, was announced by Philip Hammond in his Budget speech in November.

Although 4.5 million people could benefit, just 10,000 railcards are being offered on a first come, first served basis - meaning only about one in 500 people in this age range will have one.

Demand for the railcard has been high since it went on sale this morning, with the official website crashing under the strain.

11:50 Hammond to offer good news?

The Chancellor is expected to offer some good news when he gives his first spring statement today.

Lower than expected borrowing and higher than predicted GDP growth last year will bring a note of optimism, but Philip Hammond has already suggested it is too early to take his foot off the austerity brake.

At the weekend he said: "There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years.

"That is a very important moment for us but we are still in the tunnel at the moment."

The Office for Budget Responsibility's forecasts for the deficit, debt, GDP and productivity will form the backbone of the statement.

Last month the OBR said 2017/18 borrowing would be around £43bn rather than the £49.9bn forecast last November.

Mr Hammond has said he will not use the statement to announce any tax or spending plans, but Labour has called on him to "end the financial crisis in our public sector".

KEY POINTS:
  • Philip Hammond delivers spring statement
  • Upgraded growth forecasts
  • Predicted falling debt and borrowing
  • Chancellor declares 'light at end of tunnel'

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