Borrowing is down and investment up so Phil Hammond will signal that public sector pay rises and tax cuts are on the way after eight-year squeeze
PHILIP Hammond will signal an end to austerity this week as he tells the nation: “There is light at the end of the tunnel.”
The Chancellor is ready to take his foot off the spending brake ending an eight-year pay squeeze for millions of workers.
He will reveal that Britain is at a turning point when he delivers an upbeat Spring Statement to MPs on Tuesday.
His words are cautious but uttered by a gloomy Chancellor – dubbed Victor Meldrew by MPs – they will be seized as a sign of optimism.
Mr Hammond cheerful message was backed by economists who predict he will have a £25billion surplus to splash out a Brexit bonanza by 2020.
Mr Hammond will admit for the first time that leaving the EU will not be the disaster long predicted by his officials.
The Chancellor will soon ditch austerity imposed by his predecessor George Osborne[/caption]
And he will give the clearest hint yet that – with borrowing down and investment up – public sector pay rises and tax cuts are on the way.
Writing exclusively in The Sun on Sunday today, he declares: “It has been a long road – and there is still work to be done – but I am confident there is light at the end of the tunnel.”
He tells our army of readers: “Thanks to the hard work of people like you, we’re at a turning point.
“Over the last two quarters we have seen the first signs that productivity growth – the key to higher wages – may be increasing and this year we are forecast to see the beginning of the first sustained fall in debt for a generation.”
Mr Hammond will tell MPs that the sustained belt-tightening has led to the first sustained falling of debt in a generation – with the deficit cut from 10 per cent of wealth to 2.5 per cent.
It will raise hopes that easing of pay restraint for five million public sector workers, including nurses, is in sight.
Experts said the Chancellor will soon ditch austerity imposed by his predecessor George Osborne to boost spending on schools and hospitals.
A report by Economists for Free Trade says predicts a surplus of £25 billion a year by 2020.
It is enough to cut the 45p tax rate and invest £14 billion on key public services.
The report says: “A Brexit dividend from 2020 would begin to reduce the strains in the public sector and also give a useful boost to competitiveness.”