UK eyes higher growth and spending in budget for Brexit year

British finance secretary revealed plans to increase spending if Brexit deal agreed and introduce tax on tech giants.

Hammond said the nation's 'resolute' focus was to prosper outside the EU [Henry Nicholls/Reuters]
Hammond said the nation's 'resolute' focus was to prosper outside the EU [Henry Nicholls/Reuters]

The United Kingdom has raised its economic growth outlook for next year, when the country is set to exit the European Union, and vowed to increase spending after a decade of austerity.

The UK economy would grow by 1.6 percent in 2019, up from a previous government estimate of 1.3 percent, finance minister Philip Hammond said in his final annual budget before Brexit.

Hammond also downgraded the UK’s 2018 growth estimate from 1.5 percent to 1.3 percent, amid uncertainty over the terms of Britain’s withdrawal from the European bloc.

He said the nation’s “resolute” focus was to prosper outside the EU following its departure on March 29 next year, adding that the austerity era that began at the height of the global financial crisis in 2008 was “finally coming to an end”.

“Our economy continues to confound those who talk it down – and we continue to focus resolutely on the challenges and opportunities that lie ahead, as we build a new relationship with our European neighbours; a new future outside the European Union,” Hammond told parliament.

However, opposition Labour party leader Jeremy Corbyn attacked the finance minister for delivering a “broken-promise budget”.

“Whatever the chancellor claims today, austerity is not over,” Corbyn told rowdy legislators, following Hammond’s speech.

With much uncertainty surrounding Britain’s EU exit, Hammond said the government was increasing its Brexit preparation fund to 4.2bn pounds ($5.4bn), a hike of 500m pounds ($639m).

Talks between London and Brussels have stalled and it is uncertain whether British Prime Minister Theresa May will strike a deal acceptable to British members of parliament.

On the domestic front, Hammond announced a multibillion-pound increase in funding for the state-run National Health Service (NHS) over the next five years.

At the same time, he plans to introduce a new digital services tax aimed at tech giants from 2020, responding to public outrage over low tax payments by US tech giants.

“It is only right that these global giants with profitable businesses in the UK pay their fair share,” Hammond told legislators in a move aimed at also helping British businesses struggling against fierce online competition.

Prior to the budget, Hammond had already announced 900m pounds ($1.1m) in relief for the annual fees small store owners pay on their retail space.

Source: News Agencies

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