Philip Hammond signals end of Tory austerity ahead of Spring Statement
2 min read
Philip Hammond has signalled the age of Conservative austerity could be at an end as he declared there was “light at the end of the tunnel”.
The Chancellor - who will deliver his Spring Statement on Tuesday - insisted the economy was “at a turning point” and suggested the spending taps could be turned back on.
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.
Last night Mr Hammond said 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.
“Over the last two quarters we have seen the first signs that productivity growth — the key to higher wages — may be increasing and this year we are forecast to see the beginning of the first sustained fall in debt for a generation.
“It has been a long road and there is still work to be done, but I am confident that there is light at the end of the tunnel.”
It was revealed ten days ago that everyday government spending has finally been balanced by tax receipts, with the Chancellor expected to announce that borrowing will be some £10bn lower this year than previously thought.
In other news ahead of the Spring Statement:
- The Chancellor is expected to launch a consultation on taxing plastic waste including chewing gum, coffee cups and crisp packets, according to the Times.
- He is considering cutting the sales threshold at which VAT is paid by small firms from £85,000 to as low as £25,000 - which could generate £1bn for the Treasury - according to the Sun.
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