- Created: Tuesday, 19 December 2017 10:30
- Written by Barnaby Philips
The Chancellor of the Exchequer, Philip Hammond
Philip Hammond attempted to shrug off the huge divisions in the Tory Party by cracking a few jokes as he delivered his second Budget since becoming Chancellor, but the biggest joke was the portrayal of himself as a great moderniser putting Britain ‘at the forefront’ of the world’s imminent ‘technological revolution’. He said the Conservatives would ‘run towards change’ and make Britain ‘fit for the future’. The grim reality is markedly different. Barnaby Philips reports.
- The Resolution Foundation said that wages would not return to 2008 levels until 2025, meaning two lost decades of wage growth for workers, the longest fall in living standards since records began in the 1950s.
- The state sector continues to be stripped to levels not seen since the 1930s under the plans of the previous Chancellor, George Osborne.
- The Office for Budget Responsibility (OBR) announced its biggest downgrade for economic growth since it was set up in 2010. Growth in 2017 was reduced from 2% to 1.5% and growth through to 2021 was knocked down by between 0.2 and 0.5 percentage points; it will only creep back up to 1.6% in 2022. Even these figures are optimistic as they ignore the uncertainty of Brexit and the increasing probability of recession – Britain has suffered one in every decade since the 1970s.
- GDP per person will be 3.5% smaller in 2021 than forecast in March 2016. The loss of growth will mean the economy is £65bn smaller in 2021 than previously thought.
Despite seven years of austerity that was supposed to eliminate the budget deficit, originally by 2015, the Tories have been forced yet again to increase borrowing. The OBR rejects Hammond’s assertion that the hole in the public finances will be gone by 2025, saying it would remain until at least 2031. The Institute for Fiscal Studies added that national debt – currently standing at £1.94 trillion, with an annual servicing cost of £48bn – may not return to pre-crisis levels until the 2060s.