Budget 2019

Budget delayed

Sajid Javid
Getty Images

In case you were planning round this: Sajid Javid's first budget as Chancellor has been delayed, the Treasury has confirmed:

"Parliament has voted for a Brexit delay. We're calling for an election so we won't be delivering the Budget on 6 November."

The Chancellor will be on the BBC's Today programme after 08:00.

Hammond denies abandoning goal of eliminating UK deficit

Philip Hammond
PA

Philip Hammond's evidence to MPs is over now.

The chancellor has rejected suggestions he has abandoned a target to eliminate the budget deficit by the middle of the next decade.

Questions over Philip Hammond's commitment to the target were raised after his Budget last week which promised a big increase in spending.

But he told the Treasury Committee on Monday that the target, set in autumn 2016, "hasn't been abandoned".

There would, though, be a "balanced approach" to cutting the deficit.

Read the full story.

Money in no deal Brexit

Even if there is a no deal Brexit, the UK will still have to make payments to Brussels, the Chancellor has told MPs on the Treasury Committee.

The UK has agreed a formula with the EU about payments post-Brexit, Mr Hammond said, but that this was on the assumption there would be a deal.

If there was not a deal that might change but it was "not plausible" that if there was not a deal no money would be paid.

But, he said, that the EU would rather not receive a payment in a lump sum so this could be a point of leverage in negotiations.

Brexit deal dividend ?

Philip Hammond has been asked by the Treasury Committee about whether there will be a Brexit deal dividend.

If there is a "good deal" business confidence could rise and consumers have the confidence to spend, the Chancellor said.

" It would be choice, say in 2021 if we had a deal agreed, signed and sealed everybody was happy, business confidence was rising, it would be a choice.. in 2021 whether to maintain £15bn of headroom to the fiscal rule or whether to borrow a little more and put a little more into the spending review. That would be a choice we could make".

He added that the UK would not be sending £9bn or £10bn a year to Brussels and the OBR had assumed this would be spent on items that the EU would be doing, such as agriculture.

He defined a good deal as one that involved frictionless trade continuing.

Digital trangressions

amazon
Reuters

Philip Hammond has been asked by the MPs on the Treasury Committee about the digital tax announced in last week's budget.

The 2% tax is on sales - not profits - by large social media platforms, internet marketplaces and search engines from April 2020.

The US has warned it could retaliate as it hits US companies, such as Amazon.

Mr Hammond said that ensuring the tax was proportionate and "does not transgress our obligations under international tax laws" was very important.

He added that the tax was not an on-line sales tax.

While it was reasonable to argue that an on-line sales tax should be considered, he said that high street stores also had on-line sales.

Growth v surplus

Philip Hammond has also touched on ways to reduce the UK's debt during his evidence session with the Treasury Committee.

The "smart way" to shrink debt as a proportion of GDP was faster economic growth, rising living standards and growth in wages, the Chancellor said.

The harder way was trying to run a budget surplus and pay off debt.