Philip Hammond pours billions into the NHS as UK growth forecasts plummet
2 min read
Philip Hammond has unveiled a major funding boost for the cash-strapped NHS - as the nation's finances were hammered by sluggish economic growth.
In an hour-long, steady-as-she-goes Budget, the Chancellor revealed the health service will receive an "exceptional" £2.8bn over the next three years to help NHS trusts make ends meet.
That means the NHS will receive an extra £3.75bn in total next year, and an additional £7.5bn by 2018/19.
However, Mr Hammond also revealed that the Office for Budget Responsibility has massively downgraded its forecasts for economic growth over the next five years.
GDP is now expected to grow by 1.5% this year - down from the 2% they had forecast in March.
Economic growth is now expected to be 1.4% in 2018 (down from the 1.6% forecast), 1.3% in 2019 (1.7%), 1.5% in 2020 (1.9%) and 1.6% in 2021 (2%).
The figures are a hammer blow to the Chancellor as it means tax revenues are set to be far lower than previously thought, meaning he will either have to increase borrowing or increase taxes to fill the financial black hole.
However, Mr Hammond insisted that the Government was winning the battle to bring the UK's colossal debts under control.
He said: "The OBR forecast the structural deficit to be 1.3% of GDP in 2020-21, giving £14.8bn headroom against our 2% target. Debt will peak at 86.5% of GDP this year; it will then fall to 86.4% next year; then 86.1; 83.1; 79.3, and finally 79.1% in 2022-23 - the first sustained decline in debt in 17 years."
Elsewhere, Mr Hammond announced that first-time buyers will pay no stamp-duty on properties worth up to £300,000, in a move designed to help young people onto the housing ladder
He also said that duties on beer, wines and sprits will all be frozen, as will petrol duty.
The Chancellor also confirmed that 26-30-year-olds will now be entitled to discounted rail travel, and announced extra cash for schools and housing.
Teachers in some of the country's failing schools will get a £200m funding boost in order to improve classroom skills, whilst first-time buyers will get a stamp-duty cut designed to help young people onto the housing ladder.
Mr Hammond also pledged to end a VAT row caused by the creation of national police and fire services in Scotland.
As was first revealed by PoliticsHome, the UK government will provide an estimated £35 million a year needed to cover the disputed bill.
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