Spring Statement: UK growth revised upwards by Philip Hammond

The UK economy growing at a slightly faster rate than predicted in November and borrowing is down, Philip Hammond has said in his spring statement.

Growth will be 1.4% this year, 0.1% higher than forecast, with the forecast for 2019 and 2020 unchanged at 1.3%.

The chancellor said borrowing was due to fall in every year of the forecast – and told the House of Commons debt will fall as a share of GDP from 2018-19.

He added there was “light at the end of the tunnel” for the UK economy.

But Labour’s shadow chancellor John McDonnell accused him of “astounding complacency” by failing to address the “crisis on a scale we have never seen before” in the UK’s public services.

He said “austerity was a political choice not an economic necessity”, adding: “We were never all in this together as they claimed.”

UK economy grew by 1.7% in 2017- @PhilipHammondUK delivers #SpringStatement http://bbc.in/2FEod8V 

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The chancellor is resisting calls from Labour and some Tories to use the extra cash from tax receipts to ease the spending squeeze they say is pushing the public sector to breaking point.

But he hinted at possible spending increases to come, in his autumn Budget, when he will “set an overall path for public spending for 2020 and beyond” with a detailed spending review in 2019.

The next revaluation for business rates has been brought forward to 2021, after which the Government will move to revaluations every three years, the chancellor said.

Mr Hammond also announced that London would receive an additional £1.7bn to deliver 26,000 affordable homes – including homes for social rent, taking the total number to more than 116,000 by the end of 2021/22.

He unveiled a series of consultations on future policies:

A reduction in tax on for the least polluting vans to “help the great British white van driver go green”A possible tax on single use plasticA new VAT collection mechanism for online sales to ensure that the VAT that consumers pay “actually reaches the Treasury”How online platforms can help their users to pay the right amount of taxA call for evidence “on whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas”Inviting cities across England to bid for a share of £840m to deliver on “local transport priorities”.A plan to make the least productive businesses learn from the most productiveMeasures to end late payments for firmsThe future of cash and digital payments

The BBC understands the government has been discussing how to direct more money to the NHS in future.

Senior government figures have told the BBC’s political editor Laura Kuenssberg that cabinet ministers have been discussing ways to funnel more money to the NHS in England, including potential future tax rises or a specific tax for health.

While No 10 has publicly maintained the service has what it needs, one senior minister told Kuenssberg “we all accept” more cash is needed, while another said “it’s hard to see” how current funding levels could remain.

In a break with recent tradition, the chancellor did not use the financial statement midway between Budgets to present a “mini-Budget” or pre-Budget report.

Mr Hammond began his speech with a joke about Mr McDonnell:

“I won’t be producing a Red Book today, Mr Speaker, but of course I can’t speak for the Rt Hon Gentleman opposite” @PhilipHammondUK“I am pleased to report today to the House on a UK economy that has grown every year since 2010” #SpringStatement

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And he accused Labour of talking the economy down, comparing them to the gloomy character from Winnie the Pooh he has himself been likened to in the past.

“If there are any Eeyores in the chamber they are over there. I meanwhile am at my most positively Tiggerlike today, as I contemplate a country which faces the future with unique strengths.”

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Ahead of his speech Mr Hammond had faced calls from his own side to call a halt to the public spending squeeze.

Conservative MP and former minister Gary Streeter said the government could afford to be “more generous” to well-organised councils as their funding has been “cut to the bone”.

Tory Brexiteer John Redwood has also argued that the chancellor can afford to borrow to invest in schools, defence and the NHS, and “start to think about how we spend that Brexit bonus that comes as soon as we stop sending so much money to the EU as contributions”.”

Source – BBC News (http://www.bbc.co.uk/news/uk-politics-43380212)