Brexit constraints on the public purse mean Chancellor Philip Hammond will have less money to spend in today’s Budget, it has been claimed.
Debt interest repayments have risen due to the value of the pound, tax receipts have taken a hit due to a weaker property market, both of which have been blamed on Brexit, and the UK has already set aside £500m to prepare for leaving the bloc.
All of this adds up to Hammond not being able to splash the cash, pro-EU campaigners have said, despite a growing list of demands on housing, social care and public sector pay.
Six times Philip Hammond’s hands have been tied by Brexit:
Stamp duty land tax receipts have fallen by £900 million;
The UK Government will have to spend £517 million on relocating the European Medicines Agency;
The deficit has increased by £500 million;
The Department for Exiting and the EU and the Department for International Trade will cost £412 million;ADVERTISEMENT
The Government has allocated £250 million of spending for departments to prepare for Brexit with no deal;
Government lawyers spent £1 million fighting the Gina Miller legal case.
Labour MP Alison McGovern, said: “I know what most Brits want their Chancellor to prioritise in his budget – extra money for our National Health Service, greater resources for our schools, and more housing for our young people.
“But Philip Hammond’s hands are tied by Brexit. He’s had to fork out for more bureaucrats to manage Brexit, instead of nurses in our hospitals. The plunge in the value of the pound has pushed up the price of servicing our debt. And as the economy has weakened, tax receipts have fallen.
“Nobody voted last year for our public services to have fewer resources. Indeed the likes of Boris Johnson and Michael Gove promised us £350 million more a week for the NHS. Yet Brexit has resulted in less money to go around, not more.
“As new facts emerge and as the rush to a hard Brexit continues to make Britain poorer, voters have the right to keep an open mind.”
Infrastructure spending is also set to suffer, the pro-single market group Open Britain said, as it was revealed in August that an effective “moratorium” has been imposed on loans to the UK by the European Investment Bank (EIB). The EIB loaned £6.9bn to the UK in 2016.
Yet, despite the restrictions on the public purse, Hammond is expected to unveil funding for as many as 300,000 homes a year while also lifting the public sector pay cap for nurses and making changes to Universal Credit.
He is also set to reduce the burden of debt on students, fund driverless cars and hand more than £200m to schools to boost maths, science and teacher training.