In the Autumn Statement today the new Chancellor of the Exchequer, Philip Hammond, performed an about turn on the government’s economic strategy, loosening fiscal rules to allow the government to borrow more.
In what has been seen as a drastic change from George Osborne’s economic priorities Philip Hammond today confirmed the government will be borrowing more than ever before, increasing the national debt to nearly £2 trillion (£1,945,000,000,000) by 2020.
The Chancellor also altered his fiscal targets and rules. Mr Hammond’s predecessor promised to clear the national debt by 2015 and pushed that back to 2020, Mr Hammond today changed the deadline to the notable vague ‘as soon as possible’ after the year 2020.
While the Autumn Statement was trailed as a budget for those ‘just about managing’ it appears that the increases in the national living wage and changes in tax will be outweighed by freezes in wages and benefits and increases in costs of living due to inflation.
Mr Hammond also confirmed corporation tax would be cut to 17% – the lowest in the Western world, despite the fact business investment in the UK will be ‘permanently lower’ than previously anticipated.
Many of my constituents who voted Conservative at the last election told me they did so because they believed the Tories had a ‘long term economic plan’. Today’s statement has completed blown the Tories’ ‘long term economic plan’ out of the water. The Chancellor hasn’t even tried to meet Osborne’s targets – he’s just removed them.
As inflation increases after the post-Brexit crash in the pound the cost of living will become higher for my constituents. The government’s feeble measures to support working families will be outweighed by changes in the economy, falling business investment and reduced in-work-support.
The public finances face a new crisis and working people will feel the hurt. Today’s forecast and statement don’t seem to be good news for anyone.