Budget 2018: Jeremy Corbyn lambasts 'broken promise budget' – Politics live

Andrew Sparrow and Graeme Wearden

from on 2018-10-29 20:05 (#41STJ)

Chancellor says 'austerity finally coming to an end', announcing 400m for 'little extras' for schools and 1.7bn for universal credit work allowances

7.01pm GMT

That's it is from us for tonight.

Here is the start of our main website story about the budget.

Philip Hammond claimed that "austerity is coming to an end" as he took advantage of better-than-expected tax revenues to promise a 30bn boost in public spending by 2024.

The chancellor used a 71-minute budget speech to announce immediate short-term increases in spending on universal credit, defence and equipment for schools.

In today's budget, the chancellor has significantly eased - but not ended - austerity for public services. However, tough times are far from over.

The chancellor has set out plans to spend almost all of a very significant fiscal windfall on extra spending for the NHS, bringing to a close the era of falling overall public service spending. But unprotected departments are still on course for spending cuts into the 2020s - averaging 3% between 2019 and 2023.

6.48pm GMT

Britain's wine drinkers might feel a little bitter tonight; wine duty is going up, while other 'sin taxes' are frozen.

Daniel Lyons, Head of Tax Policy at Deloitte, explains:

"Wine drinkers will be disappointed to note that the duty on their preferred tipple will increase by 8p per bottle (effective 1 February 2019), whereas drinkers of beer, ciders and spirits will benefit from the freeze."

"Most Brits will be pleased to see the freeze on duty to pints of beer, cider and spirits. There is an argument that an increase in tax could have raised more funds for other causes, but there is also no denying that we currently pay more than most countries for a local pint.

Our research of the most populated cities from each country in the world found that a London pint costs 82 percent more than the global average and was the 22nd most expensive city."

6.45pm GMT

This is from ITV's Robert Peston.

By the way, the accelerated increase in personal tax allowances - for zero-tax and top rate - has a smell of planning (insurance) for a possible Brexit-crisis snap election. Absolutely no reason in normal electoral cycle to do now #Budget2018 https://t.co/qqB2xSFEiX

6.42pm GMT

Here is the budget in five charts.

6.35pm GMT

Robert Chote, the head of the OBR, has told Sky News that Theresa May spent most of Philip Hammond's windfall four months ago.

OBR's Robert Chote on @skynews now: "Chancellor was given a relatively large fiscal windfall. He had a choice: whether to save this money or spent it. And he's spent it. In effect the PM spent it in June with her NHS pledge"

6.35pm GMT

Here is Alison Garnham, chief executive of the Child Poverty Action Group, on the budget.

The work allowance increase is unequivocally good news for families receiving universal credit but a bigger salvage operation is still needed for the benefit. And bringing forward higher tax allowances - which will cost much more than the universal credit change - will mainly benefit the richest half of the population. We look forward to hearing more detail on how the secretary of state will use the extra 1bn to ease the migration of people on existing benefits to universal credit.

This is crunch time for universal credit. We hope the chancellor's positive announcements on work allowances will be followed by a pause in the roll-out to allow for a fundamental review of its design and, crucially, for a commitment to restoring all the money that's been taken out of universal credit.

6.33pm GMT

Here is Derek Mackay, the Scottish government's finance secretary, on the budget.

According to this budget, the Scottish government's resource block grant from the UK government - the money we are able to invest in day to day public services - remains almost 2bn lower next year compared with 2010-11. This budget falls a long way short of delivering for Scotland.

The changes announced to universal credit do not go far enough. They are just a drop in the ocean compared to the impact the roll-out of universal credit will have. I continue to call for the roll-out of universal credit to be halted - and halted straight away.

6.27pm GMT

Women protesting against changes to their pensions shouted "shame" and jeered from the public gallery as Philip Hammond delivered his budget speech. As the Press Association reports, a crowd of 80 members of the Women Against the State Pension Inequality (Waspi) group waved banners and chanted in protest at the government's previous decision to raise the state pension age from 60 to 66. Some 3.9m women have been affected by the changes and the Waspi group has made several high-profile protests including blocking a road outside parliament earlier this month.

The SNP has been particularly supportive of the Waspi women's case and several SNP MPs tweeted supportive pictures or video.

Well done @WASPI_Campaign @WASPIint making their voice heard at #Budget18 pic.twitter.com/EDLhFzoMF4

Brilliant to see the #WASPI women in the gallery. No #Budget2018 announcement for them but their fight for justice continues. pic.twitter.com/PSxoGLaony

Palpable anger in the public gallery by #WASPI women and supporters as the Chancellor fails them once again. They certainly made it a lot harder for him to ignore them this year!

When will he learn that #WASPI women will not give up. pic.twitter.com/iJni1OzGux

6.24pm GMT

Britain's headteachers have awarded the budget a D-minus, and sounds like they would happily put the Treasury into special measures.

"We are sick of our schools and families being treated with contempt. Parents won't forgive what's happening to their children's schools today and 'jam tomorrow' won't wash.

I believe that it is highly unlikely that head teachers will accept this abysmal state of affairs. Enough is enough."

6.20pm GMT

This is from our colleague Heather Stewart.

Asked Treasury spox why it is more of a priority to bring forward increasing the higher-rate tax threshold, than to unfreeze working-age benefits, which will continue until 2020. Reflects a "balanced approach," apparently.

6.17pm GMT

The budget red book says that the roll-out of universal credit is now scheduled to end in December 2023. It says:

In response to feedback on universal credit, the implementation schedule has been updated: it will begin in July 2019, as planned, but will end in December 2023.

6.13pm GMT

Don't tell Brenda from Bristol, but there's some chatter in the City tonight that Philip Hammond may have been paving the way for an early general election.

Jonathan Riley, head of tax at accountancy group Grant Thornton UK, suspects the extra money universal credit and the NHS, and the personal tax allowance changes, will all appeal to 'swing voters'.

"The big announcement related to the bringing forward of the increase in the personal tax allowance - to 12,500 - in April 2019 - a year earlier than expected. This, together with other measures, will see the average family being around 1,000 a year better off, a measure that will be welcomed by many following sluggish wage growth. Furthermore, if there is a downturn after Brexit, it might keep the tills ringing and prop up consumer confidence.

"This Budget leaves all options open - including the prospect of an election before the end of March 2019. It deals with current challenges and leaves the door open to the main event - the fundamental spending review - next April."

6.06pm GMT

Jeremy Corbyn criticised Philip Hammond for delivering a "broken promise Budget" as he insisted austerity needs to end because it has failed. As the Press Association reports, the Labour leader said eight years of austerity has "damaged our economy" and delayed the recovery, adding the government has not abandoned the policy despite the chancellor's latest spending pledges. The PA story goes on:

Leading the response to the budget, Corbyn also said the proposals announced will "not undo the damage done" by the squeeze on spending.

He told the Commons: "The prime minister pledged austerity was over - this is a broken promise budget.

6.05pm GMT

The budget appeared to contain some genuine good news for lower-paid workers -- the National Living Wage will rise by 4.9% in April 2019, from 7.83 to 8.21 per hour.

Philip Hammond also spoke earnestly about his ambition to end low-pay in the UK.

6.01pm GMT

This, from the Resolution Foundation, explains the impact of increasing universal credit work allowances by 1,000.

Here's what we assess the impact of the 1,000 rise to be for a range of families #Budget2018 pic.twitter.com/Pv7o7AcwDl

5.57pm GMT

Officially the government says that, if the UK had to leave the EU with no deal, it could manage. But the Office for Budget Responsibility is much less sanguine. It says:

A disorderly one could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances. The scale would be very hard to predict, given the lack of precedent.

5.49pm GMT

It takes a lot to ruffle the Office for Budget Responsibility.

And the Treasury seem to have managed it, by dumping a lot of important budget information on the OBR at the last minute.

Experience warns that mistakes are inevitable when such changes are estimated in haste late in a Budget process - this was certainly true following the Summer Budget 2015 welfare cuts.

So, in the absence of a certified estimate of the cost of the package, we have incorporated the Government's estimates but warn that these are very likely to change once DWP analysts have been able to model their effects proper

Never make the @OBR_UK angry... pic.twitter.com/SRS064LhSO

5.48pm GMT

The Resolution Foundation's Matt Whittaker is highlighting this chart in the OBR report which suggests that most departments will face spending cuts in the years to come.

RDEL is resource departmental expenditure limit - how much departments are allowed to spend on planned day-to-day spending.

Key chart in the OBR doc. Overall, real-terms RDEL per capita set to rise over the coming years. But stripping NHS spending out, the line is basically flat (blue line in chart). Once we've accounted for defence and aid protections, that probably means more cuts for other depts pic.twitter.com/XTh0MURUGc

5.40pm GMT

The Treasury publishes a paper on the distributional impact of the budget. But the main charts show the impact of all decisions since autumn 2016/ That means they don't take into account the welfare cuts worth 12bn announced in 2015, and they don't show the impact of today's decision in isolation.

Using this measure, which also takes into account spending on public services, and looking at the impact on household income in relative terms (not in cash terms), the measures have been progressive.

5.35pm GMT

The government has quietly slashed the money set aside for departmental capital spending in the coming years.

The Office for Budget Responsibility has spotted this, though, and says:

Departmental capital spending has also been cut from 2019-20 onwards, a decision that does not appear on the Treasury's scorecard of policy measures.

The incredible shrinking Budget: business investment revised down; exports looking poor and capital spending cut from next year onwards. The #Brexit effect.

5.25pm GMT

The most important section of the budget red book (pdf) is the scorecard - the bit that tells you how much policy decisions will actually cost in years ahead (listed as spend, and a negative number) and how much they will save the exchequer (listed as tax, and a positive number). This is the chart that shows if decisions that were made to sound significant in the budget speech are actually rather minor in hard cash terms, or vice versa.

Here are the charts.

5.23pm GMT

The spending commitments announced in today's budget are the "largest discretionary fiscal loosening" since at least 2010, when the OBR was created.

There are plenty of giveaways, including:

raising the income tax personal allowance to 12,500, increasing the generosity of universal credit and the traditional one-year freeze in fuel duty rates. Public services spending outside health also gets a boost rising to 3.2 billion by 2022-23, so that it no longer falls in real terms over the forecast.

...a new tax on large digital businesses, a tightening of rules on people who work through their own company, the reversal of the 2016 decision to abolish Class 2 National Insurance contributions for the self-employed and the restriction of the NICs employment allowance to small businesses.

...the familiar Augustinian* pattern of a near-term giveaway followed by a longer-term takeaway

5.13pm GMT

Here is the page on the Treasury website with links to the budget documents.

Here is the budget red book (pdf) - the main budget document.

5.09pm GMT

My colleague Lisa O'Carroll says the amount of money announced to replicate the work of the European Investment Bank sounds inadequate.

Hammond announces 200m, if needed, to replace European Investment Bank (low cost borrowing for govts across EU for infrastructure etc)
Last year EIB lent 2.143 billion to the UK. See graphic. pic.twitter.com/WCE9AM3r6I

5.07pm GMT

The Office for Budget Responsibility says the UK could have achieved a balanced budget by the middle of the next parliament.... but instead the fiscal windfall has been spent, largely addressing the NHS's funding crisis.

Here's the key line:

At first glance the outlook for the public finances in the medium term looks much the same as it did in March. But this masks a significant improvement in the underlying pace of deficit reduction, that on its own would have put the Government on course to achieve its objective of a balanced budget for the first time.

As it happens, this underlying improvement had already been swallowed up by the Prime Minister's promise of higher spending on the NHS made in June. The remaining Budget policy measures are a further near-term giveaway that gradually diminishes over the forecast, leaving the deficit in 2022-23 little changed overall.

5.01pm GMT

The Office for Budget Responsibility has published its official verdict.

And it states bluntly that the Government has spent its fiscal windfall, leaving the public finances no stronger than before.

Buoyant tax receipts and an improved outlook for employment have delivered the Government a significant fiscal windfall since March, sufficient to deliver its objective of a balanced budget by 2025.

But this had already been swallowed up by the Prime Minister's promise of more money for the NHS in June, to which the Chancellor has added a further near-term tax and spending giveaway. This leaves the medium-term outlook for government borrowing little changed since March.

5.00pm GMT

Budget - Snap politics verdict: Brexit Britain, global home of the toilet joke. Philip Hammond probably set a new low for budget humour in that speech, and in at least two passages - public conveniences, and rubbish collection - miniscule policy announcements seemed to be there for the sole purpose of providing a platform for a gag. That was indicative of a speech that seemed overlong, too focused on the relatively parochial (pot holes, air ambulances, fire damage in Belfast?) and desperately short of big vision "ambition". But in the circumstances, and given the constraints imposed by Brexit, who was expecting anything else? The Office for Budget Responsibility has helped Hammond immensely, and the borrowing forecasts are better than was expected earlier in the year. The chancellor was able to conclude with a standard Tory tax cut (it will be interesting to see what the impact analysis says about who gains the most - probably the relatively well off), but what was more interesting was the Labourish measures announced earlier: using higher-than-expected revenues to increase spending, not run a surplus; ending the use of PFI; a new tax on tech giants (albeit quite small); a duty freeze for beer drinkers but not wine drinkers; and injecting a serious sum of money into making universal credit more generous, undoing some of the damage caused by George Osborne. We will need to study the red book small print to work out quite how significant these Corbynish strains of policy are, but the fact that Hammond feels the need to tack in this direction show that Labour is pressing some of the right buttons.

4.52pm GMT

At first glance, Hammond seems to have grasped the windfall created by the Office for Budget Responsibility's new forecasts, and spent it.

If the OBR are right, Britain will run a deficit of 19.8bn in 2023-24. That's hardly consistent with last year's manifesto commitment to a 'balanced budget by the middle of the next decade'.

Remember that Osborne forecast to balance the books by 2015? Debt will still be rising in cash terms in 2023-4 with Hammond expecting to borrow 19.8bn that year

9th year of freezing fuel duties. Very expensive indeed. Here's a picture of the absurd way in which this is announced each year but never built in for the future pic.twitter.com/2HdLha04MV

The Digital Services Tax meant to show UK "serious" about business tax reform. But exceptions and clarifications suggest govt wants to raise only from big unpopular tech firms, leaving consumers & anything popular & tech-related alone. Not sure experts wd call that serious.

4.44pm GMT

Jeremy Corbyn, the Labour leader, will respond for the opposition shortly.

We will post highlights from his speech after he has finished.

4.43pm GMT

Hammond says we are at a turning point.

We must build a Britain we can be proud of, he says.

4.43pm GMT

Hammond says he raised the basic rate tax threshold to 11,850 in April. And the higher rate went up to 46,350.

He says people have urged him to abandon the Tory manifesto commitment, and freeze rates where they are.

Chancellor: Raising the Personal Allowance to 12,500 pic.twitter.com/E7YZRmb9TE

Chancellor: Raising the Higher Rate Threshold to 50,000 [from April 2019] #Budget2018 pic.twitter.com/PlM4tj6ZlX

4.38pm GMT

Hammond turns to the national living wage.

He says the government wants to end low pay.

4.37pm GMT

Hammond says the switch to universal credit is a long overdue and necessary reform.

It replaces the broken system left by Labour, he says.

4.32pm GMT

Coffee companies and fast food chains will be relieved that the government isn't clamping down on chuck-away cups, even though plastic is now turning up inside our own bodies....

No disposable coffee cup tax then. Hammond says tax in isolation would not deliver decisive shift to reusable cups #budget2018

No tax on disposable plastic cups. Leaves it to the "takeaway drinks industry" at the moment, while keeping an eye on the situation. Massive sigh of relief from Costa, et al #Budget2018

4.32pm GMT

Hammond says many people are feeling pressure on the budgets now.

So he can announce measures now to help them.

Chancellor"we will freeze fuel duties for the ninth successive year"

"bringing the total saving to the average car driver to over 1,000"

"and to the average van driver to over 2,500" aiai #Budget2018 pic.twitter.com/K0ptexq85Q

4.30pm GMT

Hammond announces new tax on plastic packaging containing less than 30% recyclable plastic. That will change the dynamics of recycling, he says.

He says he has looked at the case for a tax on plastic cups. He is not convinced it would affect behaviour, he says. But he says he will return to this issue if more progress is not made.

4.28pm GMT

Hammond says he is setting out measures in the red book to improve the environment.

John McDonnell's recent accident (he fell over some rubbish) showed how dangerous rubbish can be. So he will allocated 10m for waste disposal.

4.27pm GMT

Hammond says tax rates for the oil and gas industries will stay at the same level.

And the government will spend 12m on new technology for the fishing industry, he says.

4.26pm GMT

Hammond says he was pleased to respond to a joint request from three Belfast MPs for more money for the city, to help it recover from a fire.

4.26pm GMT

Conservative MP Andrea Jenkyns likes the sound of the budget - and wants constituents to get in touch with any potholes on their road:

Small independent business are to have their business rates cut by a third. This is great news for #Morley High street. #Budget2018

Great to hear in the #budget that there will be an additional 420m to fix potholes across the country. You can report them via my dedicated WhatsApp 'Pothole patrol' number: 07838339411 #Morley #Outwood

4.25pm GMT

Hammond now lists the Barnett consequentials - what Scotland, Wales and Northern Ireland will get.

4.25pm GMT

Hammond now rattles of a list of minor spending announcements, ending with extra money for the Docklands Light Railway.

4.23pm GMT

Hammond says he is publishing the Oliver Letwin report on housing developers.

It concludes developers are not engaged in land banking, he says.

4.23pm GMT

Hammond says the number of first time buyers is at an 11-year high.

"A further 500m for the Housing Infrastructure Fund, to unlock 650,000 homes." i #Budget2018 pic.twitter.com/9guRSohNl0

4.21pm GMT

Hammond announces a business rate relief for public lavatories. For the convenience of the House, he says. He does not want to get "bogged down", he says.

As MPs object to his jokes, he says at least he is proving he is British.

4.20pm GMT

Hammond's digital services tax sounds like it should snare Facebook and Amazon while allowing smaller UK e-retailers to swim through the, err, net.

If it works, it will bring in enough money to fund the chancellor's potholes repair bill.

Breaking BIG budget news - Hammond says govt will introduce a Digital services Tax in April 2020 aimed at tech giants (NOT an online sales tax) #tax #clegg

I will be EXTREMELY interested to see how this digital services tax is scoped. "A narrowly targeted tax on the UK-generated revenues of specific digital platform business models" targeted to tech giants, rather than small UK startups."

Even just going by that short pri(C)cis, this is a tax that Amazon wouldn't have paid in 2014.

The nice thing is that 400m raised from taxing (basically) advertising sales is pretty unlikely to be passed on to consumers.

4.19pm GMT

Hammond says technological change will bring challenges and opportunities.

High streets are confronting that challenge in spades.

4.16pm GMT

Hammond says Labour talks tough on tax avoidance and evasion. The government takes action, he says.

4.15pm GMT

Hammond turns to the taxation of tech giants.

It is not fair that they can generate substantial value in the UK without paying much tax, he says.

"We will now introduce a UK Digital Services Tax.

...It will be carefully designed to ensure it is established tech giants - rather than our tech start-ups - that shoulder the burden of this new tax." #Budget2018 pic.twitter.com/h2hKxMrO1Y

4.13pm GMT

Refusing to sign any more PFI deals is a good headline - and probably popular, given the mess created by the collapse of Carillion in January.

Former Treasury advisor Rupert Harrison points out that it's also an easy win for Hammond.

Clever win on not signing off any PFI schemes - there aren't any in the pipeline anyway since we got rid of the dodgy accounting incentive!

4.12pm GMT

Hammond says he will extend the rules on IR35 to the private sector, but delay the changes until April 2020, and only apply them to large and medium-sized businesses.

4.11pm GMT

Hammond says he wants to keep private homes out of capital gains tax.

But in some cases this is being abused, and so he will change the rules with regard to lettings.

4.09pm GMT

Labour's shadow foreign secretary is unimpressed that potholes are getting more money than pupils:

Amongst all the distracting slogans & talk of poaching rabbits, think I've just heard the Chancellor announce a bigger lump sum for fixing potholes than for schools. #Budget2018

4.09pm GMT

Hammond says, for smaller firms taking apprenticeships, the amount they will have to pay will be halved.

4.08pm GMT

This is from the Resolution Foundation's Matt Whittaker.

Summary so far (I think):

Economic projection little changed, but a big public finance upgrade from OBR. He's choosing to spend all the upgrade, but leaving borrowing broadly unchanged. And if he gets another upgrade one we have a Brexit deal, he'll spend that too

4.08pm GMT

A row is brewing....the Labour Party whips have tweeted that Philip Hammond has 'broken the ministerial code' by not giving the opposition any advanced sight of the budget speech.

Chancellor of the Exchequer clearly so concerned about his budget statement falling apart that he's broken the ministerial code by failing to provide even a heavily redacted version as required pic.twitter.com/o7wxxMJOC0

4.07pm GMT

Hammond says visitors from the US, Canada, Australia, New Zealand and Japan will be able to use the gates at Heathrow for EEA citizens with smart passports.

4.06pm GMT

Hammond says he is increasing the annual investment allowance.

Chancellor: Our air ambulance services work tirelessly to get those with life-threatening illnesses and injuries to the expert medical care they need"
"and I am making 10m of funding available to help them to go on doing so. #Budget2018 pic.twitter.com/dn5oTBlIRl

4.05pm GMT

Hammond says there is compelling evidence that the private finance initiative is flawed.

John McDonnell criticises it. But 90% of those contracts were signed by Labour, he says.

4.02pm GMT

Hammond says Britain can lead the world as we exploit a new wave of scientific discovery.

We can solve the productivity challenge if we embrace the future, he says.

4.00pm GMT

The new 650m funding for social care is desperately needed - it's an area that politicians have failed to tackle properly for years.

Side note: social care for the elderly is surely the worst, most depressing example of British politics' complete failure to deal with longterm challenges.

Interesting: Hammond says he recognises challenges to police funding - and Sajid Javid will "review police spending power and future options," in December.

4.00pm GMT

This is from Paul Johnson, director of the IFS.

Employment and unemployment numbers shown here are great news. Growth forecasts emphatically are not. https://t.co/yASF5hYMwz

3.59pm GMT

"Today I am announcing a 400m in-year bonus to help our schools buy the little extras they need"
"a one-off capital payment directly to schools"
" averaging 10,000 per primary school and 50,000 per Secondary School." pic.twitter.com/SvOmsFpuDX

3.58pm GMT

Hammond says many projects raise money for veterans' charities. VAT is charged on these sales. VAT cannot be waived. But the Treasury can make a donation with this money.

Marking the centenary of the First World War this year the Chancellor makes a number of commitments in commemoration, including "10m to the Armed Forces Covenant Fund Trust to support veterans with mental health needs." #Budget2018 #WW1 pic.twitter.com/EUiWQ7amrA

3.55pm GMT

Hammond turns to counter-terrorism. Today he will spend an extra 160m on CT funding in 2019/20.

He says he recognises that policing generally is under pressure.

3.55pm GMT

Today I can announce that the new NHS Plan will include a new mental health crisis service aiai #Budget2018 pic.twitter.com/b0XoA0XWAQ

Chancellor: Today, building on the additional 240m for Social Care winter pressures, announced earlier this month
I will make available a further 650m of grant funding for English Authorities for 2019-20 #Budget2018 pic.twitter.com/Ixej07WCrJ

3.54pm GMT

Hammond turns to defence.

This year we have had reminders of the threats we face, he says.

3.53pm GMT

Hammond says in some areas he will announce extra money for departments now.

This budget will give more money to councils, he says.

3.51pm GMT

Hammond says some of the "bunnies" in his hat have escaped early; in June the PM announced extra money for the NHS.

He describes it as a 25bn real terms increase for the NHS.

3.48pm GMT

Hammond says the OBR confirms a "significant improvement" in the public finances.

So he can set out a new path for public spending, he says.

The hard work of the British people is paying off. Austerity is coming to an end.

3.46pm GMT

The new UK growth forecasts are better than expected in March, especially for 2019.

But they are still quite weak in historical terms:

Yes. 'The hard work is paying off' in the form of a dismal 1.4-1.6% trend growth rate #budget18 https://t.co/1kDe8KpdOr

3.46pm GMT

This is from the Resolution Foundation's Torsten Bell.

Borrowing is basically being held at just over 20bn for ever - means surplus target abandoned

3.45pm GMT

Labour would increase tax and spending to over 1 trillion, he says.

That's is a reckless policy from a reckless party.

3.45pm GMT

[The deficit falls]"to less than 1.5% this year and next...
"falling to just 0.8% by 2023-24. #Budget2018 pic.twitter.com/WTyRdkZBOW

3.44pm GMT

"Fiscal Phil says fiscal rules okay," he jokes.

3.44pm GMT

Hammond turns to borrowing.

He says the deficit is due to fall from 10% under Labour to less than 1.4% next year, falling to 0.8% in 2023/24.

Here's a snapshot of that #Budget2018 economy data: pic.twitter.com/NVl8ZAWGts

3.42pm GMT

Hammond says the OBR is forecasting sustained real wages growth in each of the next five years.

3.40pm GMT

Hammond turns to the OBR's growth forecasts.

"The OBR expect growth to be resilient across the forecast period"
"improving next year from the 1.3% forecast at the Spring Statement"
"to 1.6%...
"then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023." #Budget2018 pic.twitter.com/0WAkm6h2e4

3.40pm GMT

Hammond has given himself some wiggle-room, by saying that the era of austerity is 'coming to an end'.

But still, he must announce some significant new spending, or the claim will fall flat.

Philip Hammond commits his own hostage to fortune: "The era of austerity is finally coming to an end." #Budget2018

"The era of austerity is finally coming to an end" - #budgettranslation ie it hasn't ended yet - this likely means he aims for a slowdown in austerity not a reversal #Budget2018

"Era of austerity is finally coming to an end" is not quite the same as "austerity is over" #Budget2018

3.40pm GMT

Hammond says we are at a "pivotal moment" in the Brexit talks.

If we get it right, there will be a "double Brexit dividend".

Chancellor: I have already allocated 2.2bn to departments for Brexit preparations.
And in the Autumn Budget last year I set aside a further 1.5bn to be allocated in 2019-20.
Today I am increasing that sum to 2bn" #Budget2018 pic.twitter.com/PXNYPrGPCj

3.38pm GMT

Hammond says the UK will build a new future outside the EU.

He pays tribute to the British people for "clearing up the aftermath of Labour's great recession".

3.36pm GMT

Hammond says the last budget on a Monday was in 1962. A foreign secretary turned chancellor was delivering it. It was a time of tension between Russia and the west.

He was six at the time, he says, but he jokes about remembering his parent say that could be him.

3.35pm GMT

Hammond says "the era of austerity is finally coming to an end".

3.34pm GMT

Hammond says the tough decisions of the last few years "were not driven by ideology".

They were driven by necessity and by the failure of [Labour] in government.

3.33pm GMT

Hammond says this budget will see the efforts of the British people finally paying off.

It is a budget for people far away from this place, the "strivers, the grafters and the carers who are the backbone of our communities and our economy".

3.32pm GMT

Philip Hammond is starting his speech now.

3.32pm GMT

The Treasury team are squeezing onto the front bench, ready for the off...

In a packed Commons chamber awaiting Philip Hammond's Budget. He just shuffled onto the front bench alongside Theresa May, whose promise to end austerity he's got to make good on - Brexit notwithstanding.

Behind the speaker's chair Geoffrey Cox pats chancellor on the shoulder and wishes him good luck #Budget18

Awkward moment for Liz Truss who struggles to squeeze in next to Chancellor Philip Hammond on the treasury bench ahead of the #Budget2018

3.31pm GMT

Hammond and May arrive in Commons.

3.29pm GMT

Labour is complaining that it has not received the usual redacted advance copy of the budget speech.

3.26pm GMT

In the press gallery waiting for the Budget and Philip Hammond's wife Susan in the public gallery to watch what *could be* his final Budget? #Budget2018

3.25pm GMT

The Evening Standard's Joe Murphy says Philip Hammond will announce an extra 160m for counter-terrorism policing.

3.25pm GMT

The House of Commons chamber has filled up ahead of the chancellor's speech....

Boris Johnson is in chamber for #Budget2018 , sitting next to fellow Brexiteer @andreajenkyns

3.21pm GMT

This is from the Sun's Tom Newton Dunn.

I'm told the Chancellor is just about to spray an awful lot more money around than previously thought; eg, the MoD alone is getting 1.8bn more over the next 2 years - that's a BIG win. Growth upgrades alone won't pay for it all, so beware the stealth taxes.

3.20pm GMT

The pound has lost a little ground against the US dollar today, down 0.2% at $1.2805, as City traders await the budget.

Last week it hit a seven-week low, and it could drop sharply if Hammond's speech alarms the City, according to analyst Ranko Berich of Monex Europe.

Stating the obvious here but cable is in a precarious position. GBPUSD has found a patch of support at current levels but there's clear air below until at least 1.266ish if any sterling negative news comes from the budget pic.twitter.com/17fidMBnVh

3.17pm GMT

The BBC's political editor, Laura Kuenssberg, says we should keep the significance of today in proportion.

Before we get into guts of #Budget2018 remember while it's a big and important day, the Spending Review next year is the really big fight over how much of our cash the govt taxes and spends and on what - one govt insider calls today, 'the phoney war'

3.10pm GMT

Joel Hills of ITV News points out that the Conservative Party's 2017 manifesto included a commitment to balancing the budget by the middle of the next decade.

So Hammond can't simply ignore that goal, without being accused of misleading the voters:

I imagine that it would be quite hard for the chancellor to abandon his target of balancing the books by the mid-2020s. It was an election pledge. #thismansnotforuturning pic.twitter.com/mdIuLTMhjb

3.05pm GMT

Ipsos MORI has released its latest monthly Political Monitor polling (pdf). It includes this chart, suggesting that two thirds of voters say they support more spending on government services, even if that means higher taxes.

3.00pm GMT

Philip Hammond has emerged from 11 Downing Street for the traditional photoshoot.

2.52pm GMT

Philip Hammond may outline plans for a digital sales tax in today's budget, which would aim to raise more tax from technology companies such as Facebook, Amazon and Google.

Ideally the UK would like an international deal, but the chancellor could signal that he'd go it alone otherwise.

Here's the full comparison of corporate tax, national insurance, business rates (i.e. revenues) and wages that stem from 100 spent in UK via online or high street sales - striking differences #Budget2018 pic.twitter.com/J6ULepa7I7

2.50pm GMT

This is from Ian Blackford, the SNP leader at Westminister.

Austerity has been a political choice. For over 10 years the poor have borne the brunt of others mistakes. Todays budget must make good on the rhetoric and reverse austerity. The best hope for a prosperous future for the UK is staying in the SM and CU. #Budget2018 pic.twitter.com/eIUu5EKHye

2.48pm GMT

This is from the BBC's Nick Eardley.

Industry sources think freeze of beer and spirits duty coming in Budget. We'll find out in an hour or so.

2.41pm GMT

Here is a Twitter thread from Sky's economics editor, Ed Conway, on what to look out for in the budget.

Thread: It's Budget day today. The speech itself is happening later than usual - 15:30 as opposed to 12:30. That means less time to dig through the data and find out whether there's any jiggery-pokery going on. On that basis, here are the key things to look out for:

First, is austerity REALLY over, in the Chancellor's figures as well as the rhetoric? There are various ways of measuring this but I'll be looking in particular at whether departmental spending is still falling year on year.

Second, if austerity is over, how is the Chancellor achieving this: more borrowing or more taxes? He'll be helped by the fact that the deficit this year will be A LOT lower than expected but is this really an invitation to borrow MORE?

That brings us to the third thing to look out for: is the reduced deficit a sign of an improving economy or simply a one-off blip? So I'll be keeping a close eye on the @OBR_UK's growth and productivity forecasts. Are they actually much better than last time around?

Four, will the Chancellor abandon his long-standing ambition to eliminate the deficit by the middle of the next Parliament? No-one else in Cabinet cares much about this - but if he is borrowing more (eg not raising taxes) it's starting to look nigh on impossible

Fifth, is this a do-nothing, or do-very little Budget? I'll be keeping a close eye on the scale of the new measures announced. How much of an impact will these policies actually have on your pocket? The suspicion is: not all that much. But we'll have to wait til 15:30 to find out

The beginning of the end of austerity was not the PM's conference speech, but... Brexit. Under Osborne, real dept spending per head was set to fall a further 6% 2017-2020. Under @PhilipHammondUK the scale of cuts was reduced to 3%. Question today: does he eliminate cuts entirely? pic.twitter.com/WVTpyirrRk

2.35pm GMT

PM has just left for the Commons - Cameras now poised on Number 11

2.21pm GMT

Labour's shadow chancellor, John McDonnell, has seized on the apparent disagreement between Theresa May and Philip Hammond over whether today's budget will need rewriting if Britain doesn't agree a Brexit deal with the EU.

McDonnell tweeted:

"What is going on? The PM and The Chancellor contradicting each other. On the day of the budget. We've never seen anything like this."

2.14pm GMT

Helen Miller from the Institute for Fiscal Studies has got five charts which she says explain the background to the budget.

While the wonks among us debate what it means to end austerity, here's what you need to know about the UK's public finances and choices in 5 charts: #Budget2018 @theIFS

1. Some good news: the deficit is back to pre-crisis levels. It's normal for governments to run deficits (i.e. to spend more than it raises in tax by borrowing). Reducing the deficit further would be tight fiscal position relative to recent history but... pic.twitter.com/3jhUbzEMws

2. Less good news: Debt remains high & is falling slowly - low deficits aren't translating into falling debt the way they used to because growth is sluggish & student loads flattering headline measures (more here: https://t.co/ZT5PvjFKEj) pic.twitter.com/cDFVmrMGFi

3. It would cost quite a lot just to meet commitments to increase spending on the NHS, defence and aid & keep spending on other public services constant in real terms. Need more if also want to stop welfare cuts. pic.twitter.com/FlnjH3cXH7

4. We could keep cutting some departments and shifting money within government, but many departments have already seen pretty big cuts. (You can play with which departments you'd cut with this tool: https://t.co/evLFsJoLWA) pic.twitter.com/JVuWev9S1C

5. Punchline has to be that if we want to maintain services & meet pressures of an aging society then Govt may dodge hard tax decisions at #Budget2018 but at some point we'll need higher taxes. We could do that without being internationally unusual pic.twitter.com/5Z5LlT8OW1

2.08pm GMT

Philip Hammond's allies are complaining that Theresa May has "spent his money before he stands up", Newsnight's Nicholas Watt reports in a blog here. Watt explains:

Friends of Philip Hammond complain that the prime minister has behaved in an "outrageous" way by spending 95bn before he even stands up this afternoon. One ally told me: "It is outrageous. The prime minister has spent his money before he stands up."

The 95bn is understood to refer to the "scoring" in the Treasury red book for the spending commitments that will be fully outlined by the chancellor in his spending round next year. The extra spending on the NHS is understood to account for 83bn of the 95bn. These sums will cover the period from 2020 to 2023.

1.56pm GMT

Political satire artist Kaya Mar has produces a new painting to mark today's budget (a habit hat's becoming as traditional as the red box itself).

This year's effort suggests a Hammond will unleash a flood of carrots on the nation.....

1.49pm GMT

Norman Lamb, the Lib Dem MP who was mental health minister in the coalition government, is not impressed by the extra spending on mental health in the budget, worth an extra 2bn in real terms by 2023/24. In a statement he said:

For all the government's spin, this 2bn falls well short of the amount experts say is needed to deliver vital improvements to services and achieve real equality between mental and physical health.

Today's announcement also recycles commitments set out in the coalition government's blueprint for children's mental health, which pledged a named mental health lead in schools as well as a dedicated professional in specialist NHS services. The Conservatives have failed to drive these changes through nearly five years on. Why should we expect things will be any different this time around?

1.23pm GMT

Philip Hammond got a significant boost earlier this month when Britain's fiscal watchdog reported that tax receipts were rather stronger than it expected this year.

That means a 13bn increase to Hammond's fiscal firepower, which could help fund some spending for the NHS, or fix some of the problems with the benefits system.

The cost of ending austerity depends on how you define it - stopping further per capita cuts in day-to-day departmental spending from next year will cost 26.3bn by 2022-23. More in this report https://t.co/Jfn6rz456T pic.twitter.com/guhsUqQMka

1.18pm GMT

Here is Damian McBride, a Labour adviser and a former head of communications at the Treasury, on the gap between what No 10 and No 11 are saying on the impact of Brexit on the government's economic plans. (See 11.52am.)

The way I read this No10/HMT row is that HMT must know today is the day when the OBR really sticks the boot in re 'No Deal' (for the sake of its own credibility, having previously hid behind the fan charts), and Hammond can't look like he's ignoring that. But we shall soon see...

1.13pm GMT

There were reports earlier this month that Northern Ireland's DUP party could break their 'confidence and supply' deal with Theresa May and vote against the budget -- which might bring down the government.

DUP spokesman Sammy Wilson has told the BBC that his party isn't planning to oppose the budget...simply because it doesn't know the details of Britain's withdrawal agreement with Europe.

To date we haven't seen the outcome of the withdrawal agreement so it would be reckless of us to oppose the budget on the basis of something we haven't seen.

However, the government will need support when it comes to the finance bill, which implements the measures in the budget, when it comes to legislation for universal credit and a whole lot of other domestic legislation.

DUP will support the Budget, suggests #Brexit spokesperson Sammy Wilson, but party could oppose government in future if exit deal means Northern Ireland is "separated from the rest of the United Kingdom"

Follow #Budget2018 live: https://t.co/rgK1dVYOYZ pic.twitter.com/P0oHl2CeeM

1.09pm GMT

Given what Theresa May said at her party conference speech, today's budget may well be judged by whether or not it supports claims that austerity is ending.

For reference, it is worth pointing out that the Institute for Fiscal Studies and the Resolution Foundation, the two thinktanks that take the lead in budget analysis, have both produced reports addressing this - but coming to different conclusions.

On the narrowest possible definition, 'ending austerity', as the prime minister has promised, would require the chancellor to find 19bn of additional public service spending relative to current plans by 2022-23. That would leave unprotected day-to-day departmental spending just constant in real terms, and falling as a share of national income. It would still leave in place 7bn of further cuts to social security.

An 'end-of-austerity' package that ensures that no department need face any further cuts in real-terms per capita spending beyond 2019-20, alongside cancelling the final year of the four-year benefit freeze and re-investing in the work allowances that underpin the new universal credit (UC) system would cost around 31bn in 2022-23. The chancellor could just about deliver that sum by making full use of his new higher borrowing headroom, but in doing so he would fall foul of his own debt rule. With so much uncertainty around, and an ongoing determination to lower debt relative to GDP, he will want to follow a more modest borrowing path. To square the circle, he will almost certainly need to raise some tax revenues - even if not at this budget.

12.29pm GMT

Had the 2016 EU referendum turned out differently, George Osborne could possibly be delivering today's speech.

Instead, the former chancellor-turned-editor has been working on his front page at the Evening Standard:

Today's aa@EveningStandarda(C): Angela Merkel announces she's stepping down & pre-Budget analysis inc 160m extra for terror fight + a@KingEconomista(C) pic.twitter.com/vBq8q9rCu3

12.26pm GMT

And while we're on the subject of the Brexit 50p coin, it is worth pointing out that the Sun, which broke the story, describes this as a significant announcement in its leader column. "Never can a budget announcement over 50p have been so warmly welcomed," it says. The editorial also uses this as an opportunity to renew criticism of the Royal Mail for not issuing Brexit stamps ("first-class buffoonery"), despite remainer suspicions that in fact that the Royal Mail has surreptitiously done exactly that.

12.13pm GMT

We've already covered the news that Philip Hammond plans to announce a special Brexit 50p coin. (See 11.03am.) This morning the European commission has confirmed that there are no plans for a euro equivalent. Asked if there would be a new euro coin marking Brexit, a commission spokesman said: "We have no current plans to do anything of the sort."

12.08pm GMT

Rupert Harrison, who was chief of staff to George Osborne when Osborne was chancellor, thinks it was a mistake for Theresa May to promise an end to austerity in her conference speech.

Sadly have to agree - the govt was groping its way towards a sensible strategy, eg Philip Hammond's "balanced approach", investing more in public services whilst still owning economic responsibility, but the 'end of austerity' language raises expectations that can't be met... https://t.co/QJzKP9U2Js

12.05pm GMT

Jonathan Portes, professor of economics at Kings College London and a former government economist, says the No 10 use of the word "funded" at the lobby briefing (see View Site

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