Budget 2018: Fresh tension between Theresa May and Philip Hammond as Chancellor turns on spending taps
3 min read
A fresh briefing war has broken out between Number 10 and the Treasury as Philip Hammond prepares to spend billions in tomorrow's Budget to fulfil Theresa May's vow that austerity is "over".
Allies of the chancellor accused the Prime Minister of "inconsistency" and warned that the Government would shed votes if it ditches its reputation for "fiscal competence" with the spending splurge.
Among other pledges already trailed by Treasury insiders, Mr Hammond is set to announce a five-year, near-£30bn package of investment in Britain's roads; hundreds of millions of pounds' worth of investment in broadband; and a new interest-free loan scheme to help those being exploited by payday lenders.
He will also reportedly find an extra £500m for the Ministry of Defence and could pump an extra £650m into Britain's under-pressure social care system.
But allies of the Chancellor accused Downing Street of “indiscipline” after Mr Hammond was effectively bumped into the spending spree by Theresa May's Conservative conference speech promising "better days ahead" after years of austerity.
One told the Sunday Times: "The issue is that while she thinks spending is key to survival, he knows it isn’t.
"He knows that if we throw fiscal competence away to try to buy votes, a) it won’t work; and b) we will lose on the grounds of inconsistency."
Mr Hammond has reportedly told friends that he believes tomorrow's Budget could be his last as he does not expect to remain in post if the Prime Minister either makes it through the Brexit process or is ousted in a Tory leadership coup.
SPENDING PLEDGES
In an interview with the Sunday Telegraph, Mr Hammond talked up the “buoyant” state of the UK economy, and vowed to target spending "on the skills of the next generation".
He also refused to deny reports that he will unlock an extra £500m of defence spending after coming under pressure from Defence Secretary Gavin Williamson and a host of Tory backbenchers over the squeeze on Britain's armed forces.
The Chancellor said: “I do recognise that, although we will deal with the longer term strategic question in the spending review next year, as we will do for all departments, there is also an immediate challenge in defence, and I will address that in my speech on Monday.”
Mr Hammond is additionally expected to use his speech to unveil a £28.8bn road repair package - a 40% increase in Britain's spending on the highways.
Writing in the Sun on Sunday, Mr Hammond said an "immediate" £420m would be given to councils to help them fix potholes and bridges, with a further £150m on top of that to help them "improve local junctions, allowing better access to workplaces, high streets and other community facilities".
The Chancellor is meanwhile set to hand people saddled with debt 60 days of breathing space from bailiffs, and Treasury sources said he would launch a review into a new scheme offering interest-free loans to families struggling with payday lenders.
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