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Philip Hammond to spend his way out of Brexit fallout Philip Hammond to spend his way out of Brexit fallout
(about 3 hours later)
A Tory government will bridge regional divides, give young people a foot on the housing ladder and raise workers’ productivity. And that is just an hors d’oeuvre, according to Philip Hammond, who argued government intervention was needed to protect everyone from the Brexit fallout, especially when they neither voted to be poorer nor to face an uncertain future.A Tory government will bridge regional divides, give young people a foot on the housing ladder and raise workers’ productivity. And that is just an hors d’oeuvre, according to Philip Hammond, who argued government intervention was needed to protect everyone from the Brexit fallout, especially when they neither voted to be poorer nor to face an uncertain future.
The chancellor promised “a new plan for the new circumstances Britain faces” as he junked George Osborne’s austerity programme in favour of pragmatism.The chancellor promised “a new plan for the new circumstances Britain faces” as he junked George Osborne’s austerity programme in favour of pragmatism.
Revealing his soft Brexit sympathies, he made it clear that quitting the European Union posed the biggest threat to the economy and he was ready to use it as an excuse for significant spending plans.Revealing his soft Brexit sympathies, he made it clear that quitting the European Union posed the biggest threat to the economy and he was ready to use it as an excuse for significant spending plans.
Not on his watch would the economy nosedive, wiping out many of the gains made in employment and rising wages over the last couple of years.Not on his watch would the economy nosedive, wiping out many of the gains made in employment and rising wages over the last couple of years.
He left the Conservative party audience in no doubt that while those ministers negotiating Brexit might be happy to wave goodbye to the single market, the chancellor wants to retain full access. For that reason he was clear the referendum vote regained control over Britain’s borders and courts, but could not be a deterministic influence on immigration.He left the Conservative party audience in no doubt that while those ministers negotiating Brexit might be happy to wave goodbye to the single market, the chancellor wants to retain full access. For that reason he was clear the referendum vote regained control over Britain’s borders and courts, but could not be a deterministic influence on immigration.
He also explained that Brexit meant abandoning Osborne’s pursuit of a balanced budget by 2020. Between several passages of praise for his predecessor, he conceded that the chase was over. Worse for the audience, one that only last year cheered the prospect of a budget surplus in 2021, no new date was set.He also explained that Brexit meant abandoning Osborne’s pursuit of a balanced budget by 2020. Between several passages of praise for his predecessor, he conceded that the chase was over. Worse for the audience, one that only last year cheered the prospect of a budget surplus in 2021, no new date was set.
Then came the end of laissez faire, with Hammond following hard on the heels of communities secretary Savid Javid and business secretary Greg Hands, making the case for ministers to take an active role in the economy.Then came the end of laissez faire, with Hammond following hard on the heels of communities secretary Savid Javid and business secretary Greg Hands, making the case for ministers to take an active role in the economy.
Earlier, Hands said Britain would never win a race to the bottom and had no option but to support hi-tech, low carbon future to attract major employers and big-paying jobs. Javid added some cheer to the proceedings with a £3bn package to support house building by 2020. Earlier, Hands said Britain would never win a race to the bottom and had no option but to support a hi-tech, low carbon future to attract major employers and big-paying jobs. Javid added some cheer to the proceedings with a £3bn package to support house building by 2020.
Hammond’s hand-outs were more modest by comparison – £220m for research and business start-up funding – and the chance for firms that win EU grants to get a replacement grant from HM Treasury.Hammond’s hand-outs were more modest by comparison – £220m for research and business start-up funding – and the chance for firms that win EU grants to get a replacement grant from HM Treasury.
However, these figures, whichever way they are accounted for, are rounding errors in the budget and reflect the balancing act between the public’s appetite for public spending and the demand for continued austerity.However, these figures, whichever way they are accounted for, are rounding errors in the budget and reflect the balancing act between the public’s appetite for public spending and the demand for continued austerity.
And that while this balancing act might mean ministers giving the go-ahead to long term projects like a third runway at Heathrow and HS2 – the high speed rail link between London and Birmingham – it will also mean a continuing squeeze on local authority budgets and the welfare bill.And that while this balancing act might mean ministers giving the go-ahead to long term projects like a third runway at Heathrow and HS2 – the high speed rail link between London and Birmingham – it will also mean a continuing squeeze on local authority budgets and the welfare bill.
Hammond said nothing about the huge shortfalls in schools and health funding or how he plans to tackle the current squeeze on average incomes from rising inflation and declining wages growth.Hammond said nothing about the huge shortfalls in schools and health funding or how he plans to tackle the current squeeze on average incomes from rising inflation and declining wages growth.
At the moment, consumers are confident the government can negotiate a smooth and painless exit. Hammond’s speech is the first to make it clear that without full access to all tools in the Treasury’s kit bag, from higher spending to business-friendly immigration, there are senior Tory ministers who believe smooth and painless is a pipe dream.At the moment, consumers are confident the government can negotiate a smooth and painless exit. Hammond’s speech is the first to make it clear that without full access to all tools in the Treasury’s kit bag, from higher spending to business-friendly immigration, there are senior Tory ministers who believe smooth and painless is a pipe dream.