All spending commitments to be set out in the Budget later will be delivered “irrespective of a deal” on Brexit, Downing Street has said.
Chancellor Philip Hammond has said if the UK left the EU without a deal he would need “a new Budget that set out a different strategy for the future”.
But No 10 said that was about using “fiscal firepower” – which could be tax or borrowing measures – if necessary.
And it would not change anything announced in the Budget.
“The austerity that followed the financial crash is coming to an end,” the prime minister’s official spokesman said, and the government was focused on delivering that “irrespective of Brexit”.
That process would start with the Budget, the PM’s spokesman added, which “sets us on a path to the spending review where we’ll set out our long-term approach”.
All Mr Hammond’s expected promises – such as more cash to fix roads and improve mental health services – would go ahead but “if economic circumstances change then he would consider economic interventions”.
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Earlier this month, Prime Minister Theresa May promised that the years of “sacrifice” and public spending cuts, known as austerity, were coming to an end and she has also pledged an extra £20bn for the NHS in England by 2023.
Mr Hammond is under pressure to spell out where the money for these promises is coming from and what ending austerity will mean in practice.
The chancellor is also expected to to use his Budget statement to announce that a commemorative 50p coin will be issued to mark the UK’s departure from the EU, according to The Sun newspaper.
The Budget, which will be delivered at 15:30 GMT, is the government’s annual announcement about how it will impose taxes and spend public money – and what state the nation’s finances are in.
Most of it is kept under wraps until the chancellor presents it to MPs, but some things have been announced ahead of the speech, including:
- An increase in spending on mental health services in England by at least £2bn a year
- A £30bn package for England’s roads, including repairs to motorways and potholes
- £900m in business rates relief for small businesses and £650m to rejuvenate high streets
- £60m on planting trees in England
- Plans to cut the cost of weddings in England and Wales
- Another freeze in fuel duty
Speaking to the BBC on Sunday, Mr Hammond said the public finances were “performing well” but that detailed information on the government’s austerity pledge would have to wait for next year’s spending review.
The review will take place after the UK’s scheduled departure from the EU on 29 March 2019.
BBC Editors: What to expect in the Budget
Political Editor Laura Kuenssberg
The chancellor’s motivation for holding the Budget in October was to get it out of the way, before the last moments of the Brexit process create a Parliamentary rollercoaster.
It was – in a period of political peril for the government – meant to be non-controversial, “slimline”, almost a “holding Budget”, according to senior government figures.
So far, so non-controversial. Except at the Tory conference the prime minister decided to charge the politics around the Budget by suggesting that the era of the squeeze on public spending was at an end.
Economics editor Kamal Ahmed
The chancellor has a number of competing challenges.
Some of them are economic – can he really “end austerity” by spending more and at the same time keep his promise to control the government’s £1.8tn debts?
Some of them are political – don’t forget the government does not have a majority and pushing any big tax rises, for example, through Parliament would be very difficult. Mr Hammond is also being lent on to be “more positive” on the economy by his next door neighbour at Number 10, Theresa May.
If the UK gets a Brexit good deal from the EU, Mr Hammond said: “We will be able to show the British people that the fruits of their hard work are now at last in sight.”
The two sides have not yet reached agreement, and both the UK and the EU are making contingency plans for what happens if there is no deal.
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Mr Hammond told Sky News that in this scenario: “We would need to look at a different strategy and frankly we’d need to have a new Budget that set out a different strategy for the future.”
He said the government had a “fiscal buffer” to provide protection for the economy if needed.
The Budget will be based on the assumption of an “average-type free trade deal” being agreed between the two sides, he added.
Follow the Budget on the BBC
- Andrew Neil presents live coverage of the Budget from 15:00 GMT on BBC Two
- BBC Radio 5 Live has live coverage from the House of Commons from 15:30
- There will also be live updates and analysis on the BBC website and apps
The chancellor has been under growing pressure – including from some Tory MPs – to provide more money to protect people losing out from the switch to universal credit, which merges six working-age benefits.
Asked about this, Mr Hammond told the BBC “judge me by my record” – saying he had committed extra money to the scheme in each of his previous two major financial statements.
“When we see things that need addressing, we address them,” he said.
Labour said the entire Budget should be voted down unless the government agrees to halt the roll-out of universal credit.
“The callous complacency of the chancellor who has refused to make good on the Tories’ promise to end austerity is shocking,” said shadow chancellor John McDonnell.
“Nothing less than an end to failed austerity in tomorrow’s budget will be acceptable.”
The chancellor is expected to announce an extra £2bn for mental health services in England.
The pledge is included in a £20bn boost to the NHS announced by the government in June. The current annual mental health spend is about £12bn.
The new funds will go towards ensuring round-the-clock mental health support in major A&E centres and providing more mental health ambulances.
People calling the non-urgent 111 number will be directed to the right support thanks to the investment, the government promised.
Health Secretary Matt Hancock acknowledged there would be no overnight transformation, telling BBC Radio 4’s Today that putting mental health services on the same financial footing as physical services was the “work of a generation”.
But he promised the extra resources would come “irrespective” of what happened with Brexit.
Labour responded: “If this announcement is simply money that’s already been promised, it will do little to relieve the severe pressures on mental health services that have built up because of this Tory government’s relentless underfunding of the NHS.”
Brexit won’t affect Budget plans to ‘end’ austerity, says No 10}