Autumn Statement: UK economy must be ‘match fit’ for Brexit

Chancellor Philip Hammond has said he aims to make the economy “match fit for the opportunities and challenges ahead” as the UK approaches Brexit.

Ahead of his first Autumn Statement, he said the economy was facing “a larger degree of uncertainty than usual” and he intended to make it “water-tight”.

The Treasury has confirmed an extra £1.3bn will be spent on UK roads to cut congestion and upgrade local routes.

Labour has urged Mr Hammond to reverse cuts to in-work benefits.

Mr Hammond told BBC One’s Andrew Marr Show the UK economy was facing a “sharp challenge”, but he wanted to support people who “work hard and by and large do not feel that they are sharing in the prosperity that economic growth is bringing to the country”.

What is the Autumn Statement?

£1.3bn to target congested roads

Financial upheaval ahead for families

Dear Mr Hammond…

He said his Autumn Statement – one of two big economic statements of the year – would “focus on making sure that our economy is match-fit for the opportunities and the challenges that lie ahead.”

But he said the UK had to “maintain our credibility” as it still had a significant deficit: “I want to make sure that the economy is watertight.

“That we have enough headroom to deal with any unexpected challenges over the next couple of years and most importantly, that we’re ready to seize the opportunities of leaving the European Union.”

His comments come amid reports that the UK is facing a projected £100bn “black hole” in its finances due to the UK vote to leave the European Union.

Asked about continued calls for the government to say more about its aims in Brexit negotiations with the other EU states, Mr Hammond pointed to the “commendable discipline” from other European leaders regarding their opening position.

He said Prime Minister Theresa May must be given the same “flexibility” to go in to the talks without revealing all her cards in advance.

He added that he was “surprised by the degree to which the cabinet is coming together around a view of the opportunities and the challenges ahead”.

Earlier it was revealed that an extra £1.3bn would be spent on improving UK roads, as part of a package of investment in infrastructure and innovation to boost long-term economic growth.

The roads investment will include £220m to tackle “pinch-points” on Highways England roads.

There will also be £27m of funding for an expressway connecting Oxford, Milton Keynes and Cambridge, following the National Infrastructure Commission’s recommendation to back the project.

‘Gimmicks’

Mr Hammond is expected to take a different approach to the Autumn Statement than his predecessor George Osborne, by announcing top-level spending decisions rather than full details of individual projects.

“He believes the Treasury should be focused on its core job of economic policy, managing the public finances, and not doing spending departments’ jobs for them,” a spokesman said.

But shadow chancellor John McDonnell told the BBC that the government was “going back to giveaways and gimmicks again”.

“A lot of the infrastructure the government is supposed to be announcing are press releases we’ve had already,” he said.

Mr McDonnell said Labour would invest an extra £500bn in the economy over 10 years to boost economic growth by 1-2%, half of which would be leveraged from the private sector through a national investment bank.

And he vowed that a future Labour government would halt tax cuts to the rich and big corporations, and would reverse cuts to Universal Credit and Employment Support Allowance.

But Mr McDonnell admitted that Labour has “been behind on fiscal credibility” since the financial crash of 2008.

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