[ad_1]
LONDON (Reuters) – British Finance Minister Philip Hammond on Monday raised the possibility of ending austerity if the government reached a Brexit deal with the EU, putting pressure on the country's rebels. conservative party to support Prime Minister Theresa May.
Chancellor of the British Exchequer Philip Hammond in front of 11 Downing Street before presenting his budget in the House of Commons in London on October 29, 2018. REUTERS / Henry Nicholls
In his annual budget speech to Parliament, Mr Hammond announced a reduction in UK borrowing requirements by the mid-2020s, as well as a series of measures to increase public spending and reduce household taxes.
"When our negotiations with the EU come to an agreement, and I am confident, I hope the" transaction dividend "will allow us to provide additional financing," Hammond said.
"The hard work of the British people is paying off. Austerity is coming to an end.
May said earlier this month that the government's austerity measures were about to end.
Hammond said that an agreement would dispel uncertainty over Britain's ties with the European Union and that it could use the money it put in. aside to help the economy by the shock of a Brexit without agreement.
"We are confident that we will get an agreement offering this dividend," he said. "Confident, but not complacent. We will continue to plan for all eventualities. "
Hammond – who regularly irritates many Conservative MPs by calling for close ties with the EU – said Sunday that he should reverse the plan to increase spending in the event an economically damaging Brexit in March.
Until then, May has failed to rally the conservatives to his Brexit strategy, raising fears that Britain will leave the EU without a transition deal.
The UK economy has slowed since the 2016 referendum, when the British voted in favor of leaving the EU, but not as much as economists had feared. However, the level of debt remains high, limiting Hammond's ability to relax its efforts.
He said the biggest increase in spending on his budget was announced when May announced four months ago that more money would go to the health service.
HELP FOR RETAILERS, TAX FOR LARGE COMPANIES
Hammond announced Monday a new digital technology tax on revenues of large technology companies, which would raise 400 million pounds ($ 510 million) annually from 2020, as well as measures to help small businesses retailers.
He also said that he was taking steps to mitigate the impact of welfare reforms on working households.
The budget deficit is expected to stand at 1.2 percent of gross domestic product for the current fiscal year, compared with 1.8 percent in March, he said.
In total, borrowings are expected to be 18.5 billion pounds lower by fiscal year 2022/23 compared to the March forecast of the independent budget office responsible for finance, which under -tenders the budget.
Hammond and his predecessor, George Osborne, have made fiscal consolidation their priority.
The deficit was reduced by almost 10% of GDP in 2010, largely as a result of the cuts in spending by many departments and cuts in social assistance spending.
However, economists have said that Hammond would struggle to reach his goal of completely eliminating the deficit by the mid-2020s when he was not raising taxes.
He told Parliament that by 2023-2024, the deficit is expected to reach 0.8% of GDP.
Hammond also set a goal of reducing public debt, which doubled as a percentage of GDP compared to the period before the global financial crisis, with the government heavily borrowing.
Hammond said the OBR forecasts indicated that debt was a declining ratio of GDP each year.
The OBR has raised its economic growth forecast for next year to 1.6% from 1.3% in March. The growth forecast for 2020 has been raised less sharply to 1.4% and maintained at 1.4% for 2021.
