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Budget 2017: Hammond to outline 'significant investments for the future'

Philip Hammond leaves 11 Downing Street ahead of The Budget.

Philip Hammond's Budget will include "significant investments for the future in skills, infrastructure and research and development", Downing Street has said.

The Chancellor briefed senior colleagues, including Prime Minister Theresa May, at Downing Street ahead of the second Budget of the year, with a traditional banging of the table to demonstrate their approval.

Mrs May's official spokesman said The Budget would "adopt a balanced approach, continuing to restore the public finances to health while investing in the NHS and public services and tackling the chronic shortage of housing".

Mr Hammond told colleagues the Budget would set out "a vision for post-Brexit Britain", showing how the UK can "grasp the opportunities which leaving the European Union provides", said the PM's spokesman.

In his keynote statement on Wednesday, the Chancellor is expected to respond to intense pressure for Government spending to boost industrial productivity and ease the housing crisis, as he promises to build "a Britain fit for the future".

But his room for manoeuvre has been limited by surprise figures showing that state borrowing jumped to £8 billion last month, adding to pressure from the Office for Budget Responsibility's expected downgrade of productivity projections.

The director of the Institute for Fiscal Studies, Paul Johnson, said Mr Hammond was caught "between a rock and a hard place" and may be forced to abandon his target of balancing the nation's books by the middle of the next decade.

Philip Hammond preparing his speech in his office in Downing Street Credit: PA

Meanwhile, Labour was demanding large-scale investment in infrastructure to boost a "sluggish" manufacturing industry, along with new cash for public services, a major house-building programme and a pause in the Government's flagship Universal Credit welfare reform.

The Budget is expected to include proposals to increase house-building and measures to help young people buy their own homes and there is speculation that stamp duty could be cut, while motorists are fearful of a hike in diesel duty to support air quality. Here are some of the measures the Chancellor is due to announce:

  • Hammond confirmed in a recent interview that the Budget would include plans to build 300,000 new homes a year in England.
  • The chancellor has said the Government will announce a fix to the glitch that forces former students to overpay their student loan debt.
  • A new railcard will be announced that offers discount fares for people under aged 26 to 30, benefitting up to 4.5 million young adults.
  • The budget speech will include a review of consumer protections for airline passengers in the wake of the Monarch collapse, which led to an enormous repatriation of stranded British holidaymakers earlier this year.

As he finalised preparations for his second Budget statement, Hammond sought to damp down expectation of a full-blown turn away from the austerity agenda which has dominated economic policy for seven years, insisting his package would be "balanced".

But addressing MPs in the House of Commons, he will leave no doubt that increased investment is at the heart of his programme.

"In this Budget, we express our resolve to look forwards, to embrace change, to meet our challenges head on, and to seize the opportunities for Britain," Mr Hammond is expected to say.

"Because for the first time in decades, Britain is genuinely at the forefront of a technological revolution, not just in our universities and research institutes, but this time in the commercial development labs of our great companies and on the factory floors and business parks across the land.

"So we must invest to secure a bright future for Britain, and at this Budget that is what we choose to do."

Credit: PA

In an apparent bid to shake off the "Eeyore" tag attached to him by Brexit-backing Tories frustrated by his cautious approach to EU withdrawal, Mr Hammond will paint an optimistic vision of a future "global Britain".

This could mean "a prosperous and inclusive economy" for everyone, no matter where they live.

As part of the effort to boost the country's skills for the future, Mr Hammond will set out a £177 million plan to give schools and sixth forms £600 for every additional student who takes A-level maths or core maths qualifications.

A £42 million fund will also support £1,000 of training for every teachers in selected schools in areas that have "fallen behind".

Jeremy Corbyn wants the government to invest in infrastructure Credit: PA

Labour leader Jeremy Corbyn, who visited the Aston Martin car factory near Warwick in the run-up to the Budget, said it was time for the Government to support business by investing in infrastructure.

Mr Corbyn said: "It is a crucial time for businesses across our country.

"Companies and work forces need clarity and certainty from the Government, but the Tories' chaotic handling of the Brexit negotiations is putting jobs and living standards at risk.

"Our manufacturing sector has had notable successes, but it has been held back for too long: investment has stalled and productivity lags behind many of our European neighbours. Despite the fall in the value of the pound, UK manufacturing growth remains sluggish.

"The Chancellor must use the Budget to invest in infrastructure to give our economy the boost it so badly needs, invest in our public services and the people who provide them, halt the disastrous roll-out of Universal Credit and begin a major new house-building programme."

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