Chancellor Philip Hammond said there was “no room for complacency” despite improved economic forecasts as he delivered his first Budget.
It is expected to be the last Budget before the UK formally gives notice of its departure from the EU and with Mr Hammond’s opening statement, he said the UK economy “continued to confound the commentators with robust growth”.
He said the Office for Budget Responsibility had revised up its growth forecasts from 1.4% to 2% for the current year, and that borrowing would be £16.8bn lower.
Several spending announcements were made ahead of Mr Hammond’s Commons statement which include:
- A £5m fund to mark the centenary of female suffrage next year
- An extra £500m for vocational and technical education in England
- A one-off £320m for 140 new schools in England, which could include grammars
- Measures to protect people who inadvertently end up subscribing for services after signing up for free trials
- Plans aimed at helping the North sea oil and gas industry
- £500m support for electric vehicles, robotics and artificial intelligence
- Extra money is expected for social care in England and to help firms facing steep business rate rises.
In the build-up to his speech, Mr Hammond spoke of his need for the UK to reduce borrowing in the long term and to ensure the country is prepared for future global economic uncertainty and any short-term turbulence arising from its withdrawal from the EU.
Mr Hammond promised to give the UK a “strong and stable platform” for the Brexit negotiations .
He unveiled forecasts for higher growth and lower borrowing but said the UK’s deficit was still high, and productivity “stubbornly low”.
The government has been under pressure to offer more resources for social care budgets.
Labour is demanding a break from the Tories’ “failed economic policies”, with the Local Government Association saying councils with responsibility for social care are facing a funding gap of £2.6bn by 2020 and the entire system stands on the “brink of collapse” without an immediate cash injection and a commitment to a long-term solution.
The chair of the LGA’s Community Wellbeing Board said;
“The measures taken by government, such as the ability for councils to raise council tax to pay for social care, will not bring in enough funding to solve the social care funding crisis,” said
“Genuinely new government money is now the only way to protect the services caring for elderly and disabled people.”
Prime Minister Theresa May has acknowledged acute pressures in social care and across the health service as a whole, but she has rejected Labour claims that the NHS is facing its worst financial crisis since its inception.
Mr Hammond is also expected to find money to alleviate the impact of increased business rates on many of the 500,000 firms facing them, following the government’s first re-valuation of commercial property values since 2010.
Business groups have called for a hardship fund for firms facing, in some cases, increased bills of more than £1,000 a year and for more small business to be excluded entirely from having to pay rates.
The prime minister said last month that those set to be “particularly adversely affected” deserved assistance.
For Labour, shadow chancellor John McDonnell said the UK was “at a crossroads” ahead of Article 50 and called on Mr Hammond to deal with rising living costs.
“It cannot be a Budget, where like his predecessor, he over-claims on the government’s economic record, and under-delivers on its promises,” he said.
Mr McDonnell said “adequate” funding was needed for the NHS and social care, and that women should no longer “bear the brunt of Tory tax giveaways for a wealthy few”.
For the SNP, Scottish Finance Secretary Derek Mackay called on the chancellor to provide some “financial relief” for struggling families and public services, and said extra spending cuts could be “disastrous”.
Aside from the Budget, several previously-announced changes come into force in April, including an increase in the personal tax allowance to £11,500, a new inheritance tax allowance, a rise in the annual ISA limit to £20,000 and the introduction of a levy to fund apprenticeships.