Britain’s Chancellor of the Exchequer, or Finance Minister, raised public spending as he unveiled the UK’s 2018 budget on Monday, bidding to convince his divided Conservative Party to back his plans to manage growth through the threats of Brexit.
In the last budget speech before Britain exits the European Union next year, Philip Hammond said that austerity, a spending policy designed to reduce national debt implemented after the global financial crash, was coming to an end.
“We have reached a defining moment on this, long, hard journey, opening a new chapter in our country’s economic history, where we can look confidently to the future.
“I can report to the British people that their hard work is paying off and the era of austerity is finally coming to an end,” he told parliamentarians.
Mr Hammond said the drop in Britain’s borrowing between now and the 2022/2023 financial year had allowed spending to increase. According to the Office for Budget Responsibility, borrowing was forecast to be £18.5 billion lower for the same period than predicted in March this year.
Britain’s budget deficit is now at around 2 per cent of GDP in comparison with 10 per cent in 2010 when the Conservatives came to power following a decade of spending cuts focused on welfare. By the 2023/2024 financial year, the deficit is forecast to be down to 0.8 per cent.
The chancellor said he would give an extra £2bn to mental health services as well as confirming a previous government pledge to provide an extra £20.5bn for the NHS over the next five years.
Other notable increases included an extra £1bn of funding to the defence budget to boost cyber capabilities and anti-submarine warfare capacity and £160 million for counter terrorism police funding in 2019 and 2020.
Leader of the opposition Jeremy Corbyn accused Mr Hammond of delivering broken promises, referencing a speech made earlier this month by prime minister Theresa May, who said austerity was “over” rather than “coming to an end”.
Socialist Mr Corbyn, who has promised to dramatically increase public spending if elected, is currently tied with the Conservative Party in the polls.
Meanwhile, sterling slipped close to a near two-month low against the dollar on Monday amid ongoing uncertainty about Britain’s likelihood of reaching a trade agreement with the world’s largest trading bloc.
The pound was valued at $1.2817 and failed to improve against the euro since last week, trading flat at €1.126.
Despite planning to have a deal agreed by the autumn, Brussels and UK Prime Minister Theresa May’s government are still at the negotiating table trying to make progress on major sticking points such as the Irish border.
During his budget speech, Mr Hammond said he was allocating an extra £500m to prepare for a no deal scenario.
The chancellor had previously warned rebellious Brexiteers in his party who favour leaving that the spending increase will be dependent on London agreeing a Brexit deal with the EU before March 29, 2019. In the event of a “no-deal” divorce, an emergency budget would replace the current spending plans.
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OPINION: In Ireland, and Europe at large, housing is the big issue
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Speaking to the BBC on Sunday, Mr Hammond said if no agreement was reached "frankly, we'd need to have a new budget that sets out a different strategy".
But on Monday Mrs May seemed to contradict her minister when she said that spending announcements in the budget would go ahead even if Britain leaves without a deal.
“We’ve been clear that people need to know that their hard work has paid off and that the austerity that followed the financial crash is coming to an end. That’s why we are focused on delivering irrespective of Brexit, starting with today’s budget which locks in the progress we have made and sets us on a path for the spending review, where we will set out our long-term approach.
"All of the spending commitments that the Chancellor will set out today are funded irrespective of a deal," the prime minister’s official spokesman said.
SANCTIONED
- Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
- Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB.
- Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.
- Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
- Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
UAE v Ireland
1st ODI, UAE win by 6 wickets
2nd ODI, January 12
3rd ODI, January 14
4th ODI, January 16
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
UAE currency: the story behind the money in your pockets
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company%20profile
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Our legal advisor
Rasmi Ragy is a senior counsel at Charles Russell Speechlys, a law firm headquartered in London with offices in Europe, the Middle East and Hong Kong.
Experience: Prosecutor in Egypt with more than 40 years experience across the GCC.
Education: Ain Shams University, Egypt, in 1978.
Teenage%20Mutant%20Ninja%20Turtles%3A%20Shredder's%20Revenge
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MATCH INFO
Champions League last 16, first leg
Tottenham v RB Leipzig, Wednesday, midnight (UAE)
HWJN
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The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
COMPANY%20PROFILE
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
The Orwell Prize for Political Writing
Twelve books were longlisted for The Orwell Prize for Political Writing. The non-fiction works cover various themes from education, gender bias, and the environment to surveillance and political power. Some of the books that made it to the non-fiction longlist include:
- Appeasing Hitler: Chamberlain, Churchill and the Road to War by Tim Bouverie
- Some Kids I Taught and What They Taught Me by Kate Clanchy
- Invisible Women: Exposing Data Bias in a World Designed for Men by Caroline Criado Perez
- Follow Me, Akhi: The Online World of British Muslims by Hussein Kesvani
- Guest House for Young Widows: Among the Women of ISIS by Azadeh Moaveni
