Chancellor's Spring Statement

Spending review clues

Paul Johnson, director of the IFS, said that there are clues about what could be in the spending review - provided there is a Brexit deal.

Assuming Philip Hammond does not want to balance the books by 2020, he could have an extra £15bn a year on top of current plans to remain within the target of keeping the deficit below 2% of national income.

"Extra spending of that sort would, finally, allow the Chancellor to say with rather more conviction that austerity really was coming to an end. It would mean spending rising not just overall in real terms, but even for “unprotected” departments, and as a fraction of national income".

IFS on Spring Statement

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The Institute for Fiscal Studies has conducted its analysis of Philip Hammond's Spring Statement.

Paul Johnson, director of the IFS, says there needs to be a full spending review.

"Brexit matters, but it isn’t the only thing that matters. The need for an effective spending review, taking account of the public finance situation and the needs of public services, is urgent," he says.

Is austerity over? He says that the spending review - to cover the three years from 202-2021 - will "determine whether austerity really has ended and whether spending on public services will finally start to move decisively upwards after nearly a decade of unprecedented cuts".

Rich getting richer

BBC Radio 5 Live

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Philip Hammond unveiled his Spring Statement yesterday and pledged to spend a £26.6bn Brexit war chest to boost the economy, if MPs vote to leave the European Union with a deal.

Ben Zaranko, research economist of the Institute for Fiscal Studies, said that while the Chancellor had downgraded growth forecasts he had a boost from lower borrowing requirements because of higher tax receipts.

"The richest are seeing their earnings grow faster than everybody else…you might be concerned about that if you care about inequality but those people pay a lot of tax," he told Wake Up To Money.

Spring Statement: Labour's John McDonnell on UK economy
The shadow chancellor claims Philip Hammond is threatening to end austerity but only if the government's "bad deal over Brexit" is accepted.