UK's May denies good-news budget signals an early election

Roman Schwartz
October 31, 2018

The new United Kingdom budget for this fiscal year is a gamble on public finances, with a one in three chance of raising the nation's debt load, the head of a prominent economic research institute in London warned on Tuesday.

Credit agency Moody's, which stripped Britain of its AAA rating in 2013, said the new budget plan did not change its view that public debt would remain high for a long time, a reminder of the constraints facing Hammond.

The Institute for Fiscal Studies said that the Chancellor may have "painted himself into a corner" by using a windfall from revised borrowing forecasts to fund increased spending on the NHS.

The United Kingdom is moving ahead of the European Union as it will introduce a new digital levy that has been dubbed the "Google tax", which was part of Chancellor of the Exchequer Philip Hammond's presentation of Britain's 2019 budget - the first "Brexit budget " - which hopes to raise £400 million.

Johnson described the budget as a gamble for Hammond, given the possibility that the public finances could deteriorate next year. The Treasury calculated the cumulative effect of increases in tax thresholds since 2010 at £1,200 for basic rate payers and £1,800 for those paying the higher rate.

While most of his Budget involved loosening the purse strings, Mr Hammond announced the new tax on tech giants to make sure they "pay their fair share towards supporting our public services". This means the income tax rate paid ont the slice of pay between £46,350 to £50,000 will drop from 40% to 20%.

Theresa May responded to the backbencher: "Can I say to my honourable friend that I'm pleased to see the support my honourable friend shows for the chancellor".

In his last tax and spending plan before Britain leaves the European Union in five months' time, Hammond tried to help May overcome resistance in her party about how close Britain should stay after Brexit to the bloc that buys almost half its exports. "Cuts are not about to be reversed".

'If I were a prison governor, a local authority chief executive or a headteacher I would struggle to find much to celebrate.

Bodies of two sisters found taped together on NY river bank
Tala was last seen Aug, 24, according to a posting on the website of the National Center for Missing and Exploited Children . A police official tells the Times that they are still seeking "what might have been their entry point into the water".

Meanwhile, spending outside the protected areas of health, defence and aid looks set to rise only in line with inflation - and will fall on a per capita basis.

But with Jeremy Corbyn's Labour pushing for major increases in public spending, Mr Osborne warned it would be a political mistake to be drawn into a fight on those terms.

This lost output will not be recovered before year-end according to the OBR although the independent body does project the economy will then pickup once into the 2019 year with GDP growth rising by 1.6%. 'There is one stand-out example of where the rules of the game must evolve now if they are to keep up with the emerging Digital Economy, ' Hammond told Parliament. "What will he do then?"

"Any idea that there is a serious desire to eliminate the deficit by the mid 2020s is surely for the birds", IFS director Paul Johnson said. So we will now introduce a United Kingdom digital services tax.

Speaking to the media about how #Budget2018 is helping families and business across the country on my visit to @EminoxLtd in Gainsborough.

Philip Hammond's giveaway Budget has increased speculation about the possibility of an early general election.

After weeks of turmoil over Brexit, Tory MPs will be looking to the Chancellor to raise party morale with his annual financial statement on Monday - expected to be the last Budget before Britain leaves the EU.

He said: "I think people will be crushingly disappointed at yesterday because it certainly wasn't the end (of austerity)".

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