PHILIP Hammond promised the country that austerity was coming to an end, as he delivered his last budget before Britain leaves the EU next March.
But the SNP’s Ian Blackford warned that the Chancellor was woefully under-prepared for the “Brexit bombshell”.
READ MORE: Budget 2018: Stooshie over Scots Tories whisky duty freeze credit
“The storm is coming, and the Government have not even brought an umbrella, never mind the shelter that we need,” the MP said.
Brexit was notable by its near absence in Hammond’s speech. His earlier warnings that the measures announced could be voided if no deal could be reached with Brussels were dismissed by Number 10 just hours before he was due in the Commons.
READ MORE: Budget 2018: Looking at Philip Hammond's vision at a glance
There were big spending pledges from the Chancellor, including, a £1 billion package to Northern Ireland. Last month, the DUP, whose 10 MPs prop up Theresa May’s government, threatened to vote against the budget as the row over Brexit and the Irish border raged on.
READ MORE: Budget 2018: ‘No end to Tory austerity in Scotland’ warns SNP’s Mackay
Yesterday, with the Treasury offering up £350 million for a Belfast city deal, £320m in Barnett Consequentials, £2m investment in Belfast city centre, and £350m for shared housing and education projects, they backed down.
The other big spending pledge from the Chancellor was £1bn to ease the stress of the introduction of Universal Credit. But, despite widespread criticism, Hammond insisted Universal Credit was here to stay.
READ MORE: Hammond's meaningless Budget hasn't brought an end to austerity
He announced a raise in allowances in by £1000 a year at a cost of £1.7bn annually. “That will benefit 2.4 million working families with children and people with disabilities by £630 per year,” the Tory money man said.
“Universal credit is here to stay, and we are putting in the funding it needs to make it a success because, on this side of the House, we believe that work should always pay.”
Hammond had far more available to him than anticipated thanks to better than expected tax receipts and forecasts by the independent Office for Budget Responsibility (OBR) that showed debt continuing to fall in each of the next five years.
Borrowing this year will be £11.6bn lower than forecast at the spring statement and is set to fall in cash terms from £31.8bn in 2019-20 to £19.8bn in 2023-24.
However, he managed to find an additional £1bn to spend in the next two years on the Ministry of Defence, especially to allow for nuclear submarine upgrades.
As expected the chancellor froze fuel duty for an eighth year, at a cost of about £800m to the exchequer, and he retained entrepreneurs’ relief.
There was also the much trailed digital services tax, targeting companies like Amazon and Google, who make millions and pay little in taxes.
Hammond said his 2% digital services tax would raise about £400m by 2020, and will only be paid by profitable companies generating at least £500 million a year in global revenues. “The rules have simply not kept pace with changing business models, and it is clearly not sustainable or fair that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.”
He added that the levy would be “carefully designed to ensure it is established tech giants, rather than our tech start-ups, that shoulder the burden of this new tax.”
There was also a promised of a £2bn crackdown on tax avoidance.
Hammond put a further £500m aside to prepare for the possibility that Britain might crash out of Europe with a deal. He said an agreement with the EU would lead to a “dividend” for the country, as this money and more, currently held as “fiscal headroom,” would be released back into the country.
“Under this Conservative Government, austerity is coming to an end, but discipline will remain,” Hammond said. “That is the clear dividing line in British politics today: between a Conservative Government delivering on the British people’s priorities, supporting our public services, investing in Britain’s future, keeping taxes low and getting our debt down; or the Corbyn party, whose idea of ending austerity is to raise taxes to their highest level in peacetime history, which would send our debt soaring, squander the hard-won achievements of the past eight years and take this country back to square one. “
Jeremy Corbyn called it a “broken-promise Budget”. “What we have heard today are half-measures and quick fixes, while austerity grinds on,” he said.
Blackford, responding for the SNP was furious when he stood up and realised that Hammond had scarpered from the chamber.
Blackford added: “This Budget is a typical Tory offering: giving with one hand and taking with another. The Budget exposes to the people of Scotland that there is a choice to build a better future – to turn away from the isolated, economically failed UK and instead look to a more prosperous Scotland in the European Union.
“Only with independence can we secure a strong future for the Scottish economy, and deliver for our communities and families”.
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