LONDON — Chancellor Phillip Hammond is warning ministers that they will have to cut their budgets or stomach tax rises if they want to see increased spending on things like social care or business rate relief in the upcoming budget, according to reports.
The Financial Times says that Hammond is unwilling to spend the £27 billion he has set aside in last year’s Autumn Statement to deal with possible Brexit headwinds, preferring to save it for the two-year negotiating period that begins once Article 50 is triggered. The FT quotes the Chancellor as telling ministers: “There is no pot of money under my desk.”
Hammond will deliver his first budget as Chancellor on March 8. The NHS, social care, prisons, schools, and business rate relief are all pressing issues that could do with extra spending as the budget looms.
However, the Chancellor is understood to be cautious about drawing conclusions before Brexit negotiations have officially begun and is keen to retain some budgetary room to manoeuvre.
This is despite the UK economy consistently performing better than expected since last June’s vote to leave the European Union. Figures this week show Britain is on track to borrow less than forecast this year.
Lobby group TheCityUK this week called for a “stability budget” from the Chancellor, saying that certainty and continuity must be continued ahead of uncertainty in looming Brexit talks.