TORY Chancellor Philip Hammond ditched predecessor George Osborne’s promise to attain a budget surplus by 2019-20 and claimed to be ready to invest in infrastructure and skills to raise productivity.
Mr Hammond acknowledged that the vote to leave the European Union showed “that large parts of our country feel left behind” and that “a dangerous divide is opening up between those who believe they have a stake in the success of our economy and those who do not.”
The Chancellor promised that the government would guarantee to continue payments of multi-year EU grants secured before Britain quits the bloc.
He announced a £220 million injection of cash into the technology sector, approved Sajid Javid’s £2 billion accelerated construction scheme for housing and said the state would “support businesses as they adjust to life outside the EU.”
The declaration marks a dramatic departure from the Cameron-Osborne government’s fixation on tackling the deficit, which proved a miserable failure, with Britain piling up an extra £555bn of debt since 2010 as Tory cuts killed off a budding economic recovery.
And it echoed the priorities set out in shadow chancellor John McDonnell’s address to the Labour Party conference last week.
But Mr McDonnell said that while his opposite number “may have performed a U-turn on investment spending, admitting that the failed ‘long-term economic plan’ never really existed, he still intends to go ahead with cuts to in-work benefits and local authority funding.
“It’s clear that Philip Hammond is now borrowing from Labour to invest in his own speech,” he quipped.
“The dangerous divide the Chancellor mentioned has come about as a direct result of the policies he has voted for since 2010.”
The Tory about-turn will wrongfoot opponents of Jeremy Corbyn and John McDonnell in the Labour Party who argued that the party should support George Osborne’s catastrophic spending cuts.
But Civil Service union PCS union general secretary Mark Serwotka warned that people should look beyond the rhetoric.
“The Tories are still wedded to billions of pounds of cuts from central and local government that will cause more damage to our public services and communities,” he said.