Chancellor Philip Hammond declared “austerity is finally coming to an end” last night, as he unveiled a Budget for “the strivers, the grafters and the carers”.
In his final scheduled Budget before Brexit, the Tory frontbencher said the hard work of the British people was “paying off”, outlining a string of spending commitments.
His announcements included an additional £1billion for the Ministry of Defence for the Trident nuclear deterrent among other key priorities and a freeze on spirit duty.
There was also good news for the oil and gas industry with a promise to maintain headline tax rates at their current level, as revealed in the Press and Journal last week.
And he confirmed the UK Government will now begin formal negotiations with the Scottish Government and local partners on a Moray Growth Deal.
In addition, funding boosts for the NHS and social care among other devolved areas mean the Scottish Government’s budget will increase by more than £950million through to 2020-21.
Scottish Secretary David Mundell said the Budget demonstrated how the UK Government was “delivering for people in Scotland”.
But SNP Westminster Leader Ian Blackford said Scotland’s budget will have been slashed by £1.9billion since the Tories came to power.
And Labour Leader Jeremy Corbyn branded the chancellor’s offering a “broken promise Budget”.
Other measures announced yesterday include:
£500million of additional funding for departments to prepare for Brexit for 2019-20, on top of the £1.5billion already announced.
A 2% digital services tax on large social media platforms, dubbed the Google tax, from April 2020. It is expected to raise £400million a year.
An increase in the National Living Wage to £8.21 an hour from April.
An increase in the tax-free personal allowance to £12,500 from April, with the higher rate threshold going up to £50,000 from the same point.
£1.7billion to increase existing work allowances in Universal Credit.
A fuel duty freeze for the ninth year in a row.
A commemorative 50p Brexit coin to mark the UK’s exit from the EU.
Up to £19million for commemoration of the centenary of the WWI Armistice.
Mr Hammond said the public finances had reached a turning point, with the deficit and debt falling and public services growing 1.2% above inflation a year from next year until 2023-24. He also reported that employment is at a near record high.
In addition, the Office for Budget Responsibility has upgraded its forecast for GDP growth in 2019 from 1.3% to 1.6%, then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023.
Addressing the House of Commons, the chancellor said: “Austerity is coming to an end but discipline will remain.
“That is the clear divide in British politics today.
“We are at a turning point in our history and we must resolve to go forwards not backwards and work together to build a Britain that we can all be proud of.”
He added: “I present to the House a budget for Britain’s future, a budget that shows the perseverance of the British people finally paying off, a budget for hard working families who live their lives far from this place and care little for the twists and turns of Westminster politics.
“People who get up early in the morning to open up factories, shops, and building sites, to drop their kids off at school, to check on elderly relatives and neighbours.
“The strivers, the grafters and the carers who are the backbone of our communities and our economy.
“This Budget is unashamedly for you.”
Responding, Mr Corbyn insisted austerity “grinds on”.
He added: “The government claims austerity has worked so now they can end it.
“That is absolutely the opposite of the truth.
“Austerity needs to end because it has failed.”
Mr Blackford, who could be seen applauding a Women Against the State Pension Inequality (Waspi) protest in the public gallery as Mr Hammond sat down, also criticised the chancellor.
He said austerity would remain under the Tories and claimed the Budget left Britain “wholly unprepared” for Brexit.
He added: “An end to austerity, said the prime minister: Scotland’s budget will have been slashed by £1.9billion since the Tories came to power.
“This Tory Government continues to balance the books on the shoulders of the poorest and the most vulnerable, yet they continue to give away tax cuts.”
Northern Isles MP Alistair Carmichael warned the government had to “work harder to protect the economy from the devastating effects of a hard Brexit”.
Mr Hammond said agreement with Brussels would result in a “double deal dividend” for the economy.
But he also hinted an emergency Budget could take place in the spring, adding: “If the economic or fiscal outlook changes materially in-year I reserve the right to upgrade the Spring Statement to a full fiscal event.”
Downing Street has pledged that all spending announcements in the Budget will be fully funded, regardless of whether the UK secures a Brexit deal.