Hammond warns of reduction in productive capacity of the economy following no deal
Philip Hammond called on MPs to end Brexit uncertainty as he hailed the “remarkably robust” British economy today.
Hammond said the OBR projected 1.2% growth this year but warned of the dangers of no deal.
“No-deal would cause disruption in short and medium term,” he said.
“It will deliver a significant short to medium term reduction in the productive capacity of the British economy.”
Provided the UK strike a deal with the EU, Hammond pledged £37 billion productivity fund, £717 million for the housing infrastructure fund that aims to deliver 37,000 homes and £100 million to help tackle knife crime.
He also confirmed that the spending review would commence prior to the summer recess, ending austerity and assessing how the government would approach public spending over the next three years.
Hammond said the Conservative government had built “a solid foundation on which to build Britain’s future” that had “almost halved Labour’s shocking legacy of youth unemployment”.
He added that borrowing was now £3 billion less than predicted and that new forecasts suggest that public debt will reach 73 per cent of GDP by 2023/24.
Later in his speech Hammond said that the government needed to tackle the pressing issues of digital regulation and climate change.
In response to the issues, he said the government had begun work with Barack Obama’s former economic adviser Jason Furman who would help the UK to “adapt our regulatory environment for the digital marketplace”.
With regards to climate change, he said he was hoping to “apply the creativity of the market”.
He presented proposals including a programme to help small businesses cut carbon emissions and plans for consultation on new tax and regulatory measures to deal with plastic waste.
Following Hammond’s speech, the shadow chancellor John McDonnell said: "We have just witnessed a display by the Chancellor of this Government's toxic mix of callous complacency over austerity.”