Budget 2018: Labour urges Philip Hammond to ditch ‘vague promises’ and end austerity
3 min read
Philip Hammond should use next week’s Budget to make good on the Conservatives’ vow to end austerity, Labour's John McDonnell will say today.
In a speech in London ahead of the set-piece tax-and-spend statement, the Shadow Chancellor will demand that his opposite number turns on the spending taps to reverse eight years of economic “hardship”.
Theresa May told the Conservative party conference last month that the squeeze on the public finances imposed since 2010 would soon be “over” - and tried to reassure voters that “the end is in sight” after years of cuts.
But Mr McDonnell will tell an audience in London that the Government will need to pump billions of pounds back into public services in order to fulfil Mrs May’s pledge.
The Labour frontbencher will say: “In her party conference speech, Theresa May announced the end of austerity. This budget will demonstrate whether or not she is true to her word.”
The opposition says argues that Mr Hammond - who is under pressure to fund a major boost to NHS spending and plough money back into the Universal Credit welfare reform - will need to spend £19bn to stop fresh cuts to departmental spending that are already on the cards.
The party meanwhile warns that £7bn will be needed to shelve planned welfare cuts, with an addition £17bn needed to undo reductions made since the Conservatives came to power in 2010.
In his speech, Mr McDonnell will call on ministers to acknowledge “the scale of the hardship eight years of Tory austerity has inflicted on our people and our communities”.
And he will urge the Chancellor to take “large scale action” to end the spending squeeze rather than relying on “vague promises for the future or a few financial conjuring tricks”.
“The Tories have botched the Brexit negotiations and as a result are making matters even worse, putting jobs and the economy at risk,” he will say. “Vague promises of some Brexit bonus are increasingly seen as implausible.
“Our schools, councils and social care system are crying out for investment. If austerity is really over, it is time for Philip Hammond to stump up the cash.”
Despite threats from some Eurosceptic Tories and the DUP to vote against next week’s Budget over Brexit, Mr Hammond could be in for an easier-than-expected ride after being handed a multi-billion pound windfall through revision’s to Britain’s borrowing forecasts.
The Financial Times revealed earlier this week that the Office for Budget Responsibility will slash its borrowing projections by around £13bn this year alone - the biggest year-on-year change in borrowing forecasts since the data was first produced in the 1980s.
The extra money could allow Mr Hammond to plough cash into the NHS without having to raise taxes, staving off a potential rebellion by Tory MPs.
Treasury sources have already downplayed the prospect of a headline-grabbing Budget next week, however, with big bang announcements on public spending likely to be saved for next year's Spending Review.
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