Chancellor Warned Of 'Brexit Austerity' Danger Ahead Of Autumn Statement

Chancellor Warned Of 'Brexit Austerity' Danger Ahead Of Autumn Statement

Labour MPs have warned the country is facing "Brexit austerity" if the Chancellor fails to take significant action to deal with the fall-out from the vote to quit the European Union (EU) in next week's mini-budget.

Senior figures in the party called for major investment in infrastructure outside London, moves towards free universal childcare for families with pre-school children and support for business in the autumn statement.

The paper also takes a clear swipe at Jeremy Corbyn's leadership of the Labour Party.

Former shadow chancellor Chris Leslie warned against "denigrating" the financial services sector.

He wrote: "The tragedy for Labour is that a confident centre-left approach, willing to champion a successful financial services industry but in a framework of robust regulation, could reap great popularity among the business community and beyond."

Philip Hammond is reportedly planning some modest give-aways for families that are "just about managing", referred to by some in Westminster as "jams", when he sets out his plans to MPs.

He is likely to have little room for manoeuvre in the first financial statement since the vote to leave the EU.

Conservative former minister Stephen Hammond said he did not believe there would be any "rabbits out of the hat".

He told BBC Two's Newsnight: "Given the uncertainty of this economy, I'm not sure even if we had a whole panoply of measures for the jams this would be the right time to do it.

"This is the time, I think, for a steady-as-she-goes autumn statement."

In a report, Moving On: A Labour Approach To The Post-Brexit Economy, Mr Leslie, along with Alison McGovern, Chuka Umunna, Shabana Mahmood and Rachel Reeves warned of the "corrosive" economic divisions that exist in the country.

They called on Mr Hammond to use the autumn statement on November 23 to reverse the economic "stagnation" affecting many areas outside London.

Mr Leslie said the Chancellor had risen to high office "with barely any trace" and "has an opportunity to make his name" with the measures he takes next week.

"The truth is, Philip Hammond doesn't really know yet how to handle this Brexit scenario," he wrote.

Mr Leslie warned that unless moves are taken to offset pressures on earnings and wavering business confidence, there will be "severe consequences" in the long run for vital public services like the NHS.

"Steadily degrading economic performance relative to the rest of the world risks creating a Brexit austerity, a mutant strain of the Conservative austerity variant," he added in the paper published by the Social Market Foundation.

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