Philip Hammond rows back on suggestion he could end austerity this week
2 min read
Philip Hammond today rowed back on suggestions he could put an end to austerity at the upcoming Spring Statement.
The Chancellor said there was “light at the end of the tunnel” on soaring debt but added: “We are still in the tunnel at the moment.”
He is expected to unveil the smallest budget deficit since 2002 at the fiscal event on Tuesday - but insisted he was not going to make any spending announcements.
Mr Hammond told the Sun on Sunday that the last near-decade of cutbacks meant “we can spend more on public services instead of debt interest, and enabled people to keep more of what they earn”.
He added: "Thanks to the hard work of the British people, we’re now at a turning point.”
But appearing on the BBC Andrew Marr show today he rejected calls from Labour to end the “pain and misery” of spending cuts on Tuesday.
"I think most people in this country would be horrified to be reminded that we have £65,000 worth of public debt for every household in this country," he said.
"If there is the flexibility and the space to do something, then we will decide in the autumn how we are going to use that."
Appearing on the same show, Shadow Chancellor John McDonnell said his counterpart had "shifted the deficit onto the shoulders" of NHS managers, headteachers and councils.
He added: "They're facing a financial crisis because of government cutbacks.”
'CLOSE TO END' OF AUSTERITY
His calls echo Tory figures like former minister Nick Boles and ex-adviser to Theresa May Nick Timothy, who have urged Mr Hammond to pump more cash into public services.
Tory former minister Mark Garnier today said he agreed that cutbacks could not last for much longer.
"We are getting close to the end of austerity. Maybe a few months, maybe a year," he told ITV show Peston on Sunday.
EU GLOOM
It was revealed ten days ago that everyday government spending has finally been balanced by tax receipts.
But an EU assessment of the economy leaked to The Sunday Times has piled pressure on ministers after it predicted lower levels of growth than official Government figures.
The European Commission paper - set to be published soon - said GDP growth had “slowed markedly since the start of 2017” and was “expected to remain subdued”.
It said growth would be 1.3% in 2018 and 1.1% in 2019 - compared with estimations from the Office for Budget Responsibility of 1.4% and 1.3% respectively.
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