Hammond offers more spending, lower taxes if a Brexit deal is done

Lloyd Doyle
March 16, 2019

In documents released alongside Chancellor Philip Hammond's Spring Statement, the Office for Budget Responsibility (OBR) said growth in the United Kingdom and global economies had slowed since October's Budget, leading to a downgrade in its short-term forecasts.

The OBR's estimate of 1.4% growth for 2020 remains unchanged, but 2021 and 2022 are now expected to deliver slightly higher growth, with 1.6% forecast for both years.

Mr Hammond should also be praised for other short-term measures - like the £100m being made available to the police this year for additional patrols, albeit on the back of overtime, to combat the epidemic of knife and violent crime.

"Last night's vote leaves a cloud of uncertainty hanging over our economy", Hammond said in Parliament.

The projections allowed Philip Hammond, the chancellor, to bank £26.8 billion in lower borrowing over the next five years, which he pledged to use to cut taxes and raise public spending if parliament agreed a Brexit deal.

"Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal", he said.

He added though that the "economy itself is remarkably robust".

British Prime Minister Theresa May stressed on Tuesday that parliament's approval of the withdrawal agreement she has reached with Brussels will deliver a fiscal "Brexit dividend".

Lawmakers were expected to vote later on Wednesday against a leaving the European Union without a transition deal, then vote on Thursday on seeking a delay to Britain's departure, now scheduled for March 29.

"In recent weeks survey indicators of current activity have weakened materially, in part reflecting heightened uncertainty related to Brexit", the OBR said.

Strong income tax receipts, reflecting Britain's lowest unemployment rate since the 1970s despite the economic slowdown, lay behind the improved outlook for the budget. "That is not what the British people voted for in June 2016".

MPs were expected to vote later today against a no-deal Brexit and then vote on Thursday in favour of the government seeking a delay to Britain's departure, now scheduled for March 29.

Hammond revealed in his Spring Statement that the forecast for the country's growth in 2019 was 1.2 percent, the weakest since 2009, a sharp drop from the 1.6 percent predicted in the his budget last October.

Later in the day, the United Kingdom parliament voted down a no-deal Brexit but May warned the legal default in European Union law remains that "the United Kingdom will leave without a deal unless something else is agreed".

Other reports by Iphone Fresh

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