Chancellor Philip Hammond took the chance to stamp his authority on the economy with his first Autumn Statement.
He has swept away living under austerity to back investment in infrastructure and innovation to improve productivity, wages and living standards.
Although many of his giveaways were leaked on the days before the statement, Hammond still spoke for an hour explaining his plans for a more prosperous nation.
He blamed the uncertainty of Brexit for impending higher inflation and slower growth forecasts.
After an independent audit of his figures by the Office of Budget Responsibility he confirmed Brexit will make the nation poorer in the short term and that leaving the European Union will slash growth in half over at least the next five years.
But if anything is certain, the fact that his forecasts are probably fiction is worth betting on.
Infrastructure and innovation
The government has missed every forecast for growth and promise to reduce borrowing in the past six years, and with the spectre of Brexit looming over the economy, many more are likely to be brushed aside.
Hammond confirmed growth of 1.4% this year, growing to around 2% for 2019 until 2021.
“Our task now is to prepare our economy to be resilient as we exit the EU and match-fit for the transition that will follow,” he said.
To do that, the government proposes to increase borrowing to fund several billions of pounds of infrastructure and innovation projects over the next few years.
“We choose in this Autumn Statement to prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain’s productivity,” said Hammond.
“While funding all other new policies announced in this Autumn Statement through additional tax and spending measures. That is the responsible way to secure our economy for the long term.”
All change for future Budgets
Hammond also abolished the autumn statement from now on – instead switching to an Autumn Budget and Spring Statement to give businesses and taxpayers more time to catch up with policy changes before the start of the financial year.
Labour’s Shadow Chancellor John McDonnell slammed the statement as ‘abject failure’.
“What the Chancellor has said is we have had six wasted years and no hope for the future,” he said.
“All we have to look forward to are more taxes, more debt and more borrowing.”
