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News | Published October 29 2018

Hammond announces final budget before Brexit

The Chancellor Philip Hammond announced the final budget before next March's Brexit deadline in a speech that run for over an hour in front of a packed House of Commons. Hammond announced a series of new spending measures throughout the speech and quoted numerous forecasts from the OBR, which he said indicated the growing strength of the British economy.

Hammond began by stating that it would be a budget for hard working families and people, those who the Conservative party were proud to represent. Referencing the cuts and austerity measures that have taken place over the last eight years since the coalition government's election in 2010, Hammond said "they were choices taken out of necessity", not ideology. He continued that they "did what needed to be done", but austerity was now coming to an end.

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  • Hammond delivers hour-long speech to MPs
  • Announces that austerity is coming to an end

Hammond went on to say that their priorities remained building new relationships with the UK's European neighbours and confounding the many people that continue to talk down the British economy. Income inequality, he said, was lower now that at any point under the last Labour government, while the Conservative government would continue to prioritise "getting people into work". With regards to Brexit, he said they would take whatever action was necessary to ensure that any economic changes that we face are dealt with.

 

Income inequality, he said, was lower now that at any point under the last Labour government, while the Conservative government would continue to prioritise "getting people into work"

Hammond announced that OBR forecasts projected the economy would grow 1.5 per cent in 2019, before claiming that the UK had met its structural borrowing targets three years early. Hammond said that today's forecast show the deficit is down to 1.4 per cent, while borrowing is just 1.2 per cent of GDP. In order to begin the process of ending austerity, he then announced his five year plan to improve public services throughout the UK.

In terms of major funding announcements, Hammond promised an additional £1 billion for the MoD, £84 million in children's social care and an extra £160 million for counter-terrorism policing. He pledged £1.6 billion to the government's new industrial strategy and promised schools across the country a one-off capital payment. Hammond then announced the abolition of PFI contracts on any new government scheme and stated that the Apprenticeship Levy would be cut in half for smaller businesses to five per cent. Hammond told MPs that the UK has been at the forefront of efforts to create international corporate tax reform, but warned that progress has been painfully slow. In response though, he announced the creation of a new digital services tax, aimed at the tech giants who are not paying tax in the UK. He then committed further funds to the Transforming Communities Fund, house building across the UK and all the devolved regions. Hammond finished his speech by claiming that he hoped to continue to build on the inherent strength of the British economy and said that although austerity is now coming to an end, discipline will remain.