Spring Statement: Chancellor Philip Hammond reveals stronger borrowing forecasts

SPRING STATEMENTMarch 12 2018 12:00pm The Times Spring statement Chancellor will get stuck into chewing gumnew Oliver Wright Policy Editor

SPRING STATEMENTMarch 12 2018 12:00pm The Times Spring statement Chancellor will get stuck into chewing gumnew Oliver Wright Policy Editor

Government borrowing will be £45.2 billion this year - some £4.7 billion lower than predicted in November and £108 billion lower than in 2010.

The Chancellor used his first Spring Statement today (13 March) to announce the call for evidence, which will examine the potential for charge on items such as plastic plates, takeaway boxes and polystyrene packaging, building on the success of the existing plastic carrier bag charge.

Matt Tooth, chief commercial officer, LendInvest, said: "The absence of a major policy shakeup in the chancellor's statement today is precisely what the industry needed".

Government borrowing and national debt will also be covered in today's statement, as well as a quick overview of possible consultations for tax changes.

John McDonnell, the shadow chancellor, gave a robust response to the speech, criticising the "indefensible spectacle" of a chancellor "failing to lift a finger" to help struggling local authorities and the NHS.

Mr Hammond said it is expected to be "the first sustained fall in debt for 17 years, a turning point in the nation's recovery from the financial crisis of a decade ago".

But wait. isn't Hammond forgetting the looming economic disaster of Brexit?

The Chancellor talked up "substantial progress" on the Brexit talks so far and said he looks forward to "another important step forward next week at the European Council", when negotiating teams meet.

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Inflation hit 3.1% in November 2017, but the OBR predicted it had reached its peak.

Debt is forecast to be 1% lower than expected at the time of last autumn's Budget, peaking at 85.6% of GDP in 2017/18, before falling gradually to 77.9% in 2022/23.

Amid a clear political warning against "Labour's economic train wreck" (paired with his "light at the end of the tunnel" metaphor), the chancellor announced that growth for 2017 had been revised up by the Office for Budget Responsibility (OBR) to 1.7 per cent - up from 1.5 per cent at the Budget in November.

Mr Hammond has said he will not make tax and spend announcements in the statement, which he insists is no longer a "fiscal event" after he shifted the Budget from its traditional springtime slot to the autumn.

By 2021 the growth forecast was 1.4 percent, compared with a previous forecast of 1.5 percent.

Hammond's Treasury deputy Liz Truss said there would be "no red box, no rabbits out of the hat and no tax changes".

In order to facilitate a shift away from plastics, Hammond will also announce a support fund of £20 million for businesses and universities investing in research around alternatives to single-use plastics.

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