Spring statement: Brexit deal could end austerity, but benefit freeze continues - as it happened

Graeme Wearden

from on 2019-03-13 20:14 (#4AZ1X)

Chancellor reveals growth and borrowing forecasts, plus money for period poverty, knife crime prevention, and affordable housing

8.14pm GMT

The latest wild developments in Westminster tonight have shown the fundamental flaw in today's spring statement - Brexit changes everything.

The prediction that growth will only be 1.2% this year, the improved borrowing figures, the 26.6bn war chest which the chancellor is itching to open... they could all evaporate if Britain crashes out of the EU in 16 days.

"MPs have said 'no to no deal,' but without an agreement between the UK and the EU, this vote sadly delivers very little. A constructive and practical way forward must be found. Unless the Withdrawal Agreement or some other realistic course of action is agreed very soon, the UK will still crash out, regardless of MPs' wishes.

Brexit is speeding towards the end of the road and there is still no bridge to get to the other side."

7.33pm GMT

There's big drama in the House of Commons right now -- MPs have narrowly voted for an amendment rejecting the idea of Britain leaving the EU without a deal, by just four votes.

That's a fresh blow to Theresa May, and possibly makes a Brexit extension even more likely.

Result of this vote which would hypothetically take no deal off the table for ever - pass by 312 to 308 - super tight victory for Remainers and opposition, but remember, it is not binding

Many people will cheer this but others will ask what the point of this amendment is that is not routed in any kind of reality about how you stop no deal, rather than government motion that at least had a practical meaning https://t.co/9uhRVipTIL

Government plan to rule out No Deal only on March 29th has now been deleted, meaning they will have to whip against what remains of their own motion / fears now of ministerial resignations if they go through with that...

6.49pm GMT

The Independent highlights several campaign groups who have condemned the government for not ending the benefits freeze early, by tapping into its fiscal headroom.

Campbell Robb, chief executive of the Joseph Rowntree Foundation said: "The government should have shown today that it is serious about tackling the rising tide of poverty in the UK.

"Instead they chose not to end the freeze on benefits, leaving families in poverty to face rising costs and bear all the risks of economic uncertainty, especially if we leave the EU without a deal."

Mr Hammond said leaving the EU with an agreement would give the UK real choices on how much of a "deal dividend" could be spent on public services or tax cuts. "That is what I mean by an end to austerity," he added.

After a near-decade of austerity and severe cuts in local authority spending, the UK's services are showing the strain through crises in the social care system, schools asking parents to donate and a visible rise in rough sleeping.

Rarely has a Chancellor faced such a grim outlook with such little cover.

Britain's economy is in for a beating: growth forecasts for this year were slashed by a quarter.

6.37pm GMT

There's real anger tonight that Hammond didn't take the opportunity to end the freeze on working age benefits.

By keeping the welfare payments unchanged in cash terms, recipients will actually get less once inflation is taken into account.

The final year of the freeze on working age benefits, which takes effect next month, will leave a low-income couple with children 200 worse off next year, rising to 580 once the full effect of the freeze is included.

Overall tax and benefit changes being introduced this April will take 100 from families in the bottom fifth of the income distribution and give 280 to those in the top 10 per cent.

Philip Hammond chose not to completely ignore the freeze on working-age benefits.

Nothing in today's statement will help those families struggling to get by because of this cruel policy that means tax credits and universal credit don't go up with inflation. pic.twitter.com/G2gCep2WE9

5.52pm GMT

Professor Costas Milas of Liverpool University reckons the Chancellor may actually have more flexibility to spend and borrow than the OBR has estimated.

The OBR predicts annual GDP growth rates of 1.2% in 2019, 1.4% in 2020 and 1.6% in 2021. Contrast this with the Bank of England's predictions (made only last month by the Bank's February 2019 Inflation Report) of 1.2% in 2019, 1.5% in 2020 and 1.9% in 2021. Why is OBR so much more pessimistic than the Bank of England for 2020 and 2021?

In fact, under the assumption of lower Brexit-related uncertainty (let's call this the 'deal dividend effect') the Bank predicts even higher GDP growth rates of 2.2% in 2020 and 2.3% in 2021.

5.35pm GMT

This char shows how the UK's government's borrowing requirements have fallen, giving more headroom to borrow within the fiscal rules.

That largely reflects projections of higher income tax receipts (higher earnings growth assumptions) and lower debt interest spending (reflecting lower market expectations of rate rises). The amount of 'headroom' in the fiscal numbers therefore rose (i.e. the extra net spending the Chancellor could engage in before breaking the fiscal mandate) from 15.4bn to 26.6bn.

The OBR did warn though that, in the event smooth Brexit is achieved, market interest rates and debt interest payment projections may rise again, i.e. reducing that headroom.

5.03pm GMT

Extending Article 50 by a few months would have a damaging impact on the UK's economy, and erode the chancellor's headroom to borrow and spend more.

So argues Danielle Haralambous, UK analyst at The Economist Intelligence Unit:

Even though the OBR has slashed its economic growth forecast for 2019, there's been a marked improvement in the UK's fiscal ratios, creating more headroom for the Chancellor to loosen fiscal policy if required and allowing him to stick to his declaration of an "end to austerity". However, there's a big cloud hanging over these projections, as they all are all conditional on a smooth end-March Brexit transition that parliament pretty much ruled out last night.

Mr Hammond expressed a hope that the negotiated Brexit deal will still be passed in the coming weeks, but that is unrealistic. We don't expect a "no deal" scenario, but an extension of Article 50 that will compound the current uncertainty associated with Brexit and probably mean a deterioration in the forecasts and slightly less fiscal room for manoeuvre by the Autumn Budget.

4.52pm GMT

My colleague Aditya Chakrabortty says Philip Hammond's spring statement had one large flaw -- a massive vacuum where the chancellor should have put some new policies.

Ah, but what about Brexit uncertainty pinning Hammond in? Not good enough....

You would not have guessed from listening to him that the economy is on the brink of recession, that local councils are going bust, that schools across the land are sending parents begging letters for cash. Analysis by the TUC shows that by 2024, spending on public services will still be 500 lower per person than it was in 2009.

Hammond claims that all he needs is a deal on Brexit to open the sluice gates and get spending, but there is no logical connection between the two. The UK has its own currency, and interest rates are barely off the floor. Now is the time for a government to spend on public housing, on schools and on a welfare system that doesn't treat claimants as scammers and idlers. Sadly, it won't be this government.

4.41pm GMT

Here are some of our Spring Statement news stories:

4.35pm GMT

Philip Hammond made much play of his Brexit war chest - the 26bn of extra spending that will be possible within the government's fiscal rules, and the boost to business confidence.

"As to be expected after last night's vote, the Chancellor's statement provided little sunshine to cut through the Brexit fog.

"If there is a managed deal, we can expect a significant Brexit dividend with businesses investing, consumers more confident and an uptick in the market. However, much damage has already been done as a result of the ongoing uncertainty. Businesses have taken decisions to relocate assets and cancel planned investments, which are unlikely to reversed even if a deal is reached.

4.17pm GMT

Adam Jackson, director of public affairs at Grant Thornton UK LLP, says Philip Hammond has hinted at the likely priorities of this summer's spending review (assuming's he's still chancellor at that stage)

"These felt like placeholders; a possible government programme if the UK ever completes the interminable current phase of Brexit decisions.

3.44pm GMT

The Treasury says the spring statement offered several new spending and policy commitments for Scotland, which included a 65m share of the 260m on offer in the new Borderlands growth deal which will straddle the English and Scottish border.

Coincidentally boosting the electoral fortunes of the Conservative MPs who have seats on either side of the border, the Treasury said it meant that regional partnership would be getting a total of 362m.

3.40pm GMT

Torsten Bell, Director of the Resolution Foundation, says the government has the firepower to end austerity, if it wants to:

"In a speech light on policy, the Chancellor used a 30bn windfall from the OBR to promise sunny uplands if Parliament delivers a smooth Brexit in the months ahead.

"The Chancellor's 26bn of fiscal firepower is more than enough to bring austerity to an end in the Spending Review later this year. This marks a major shift as the debate in British politics moves to focusing on how much more we should spend, rather than how deeply to cut.

3.08pm GMT

The spring statement is being criticised for not providing more help to fight poverty and support poorer families.

We have responded to the #SpringStatement 'If money can be found to deal with the self-inflicted disaster of Brexit it can be found to restore our public services and end child poverty.' https://t.co/2rgRwF8JqH pic.twitter.com/Q7n9N8UR2v

We're disappointed by today's #SpringStatement - the Chancellor has missed a real opportunity to do the right thing & give people on the lowest incomes financial support & certainty before #Brexit > https://t.co/6onIJXs1SN pic.twitter.com/EtLdT8gtPX

3.02pm GMT

Here's a video clip of the chancellor announcing that fossil fuel heating systems will be banned by 2025, from new homes.

New homes will be banned from having fossil fuel heating systems from 2025, says Chancellor Philip Hammond, "delivering lower carbon, and lower fuel bills too"#SpringStatement updates: https://t.co/QWAEejtfaL pic.twitter.com/lWbnksCHdK

2.56pm GMT

Climate activists have welcomed the government's pledge to end fossil-fuel heating in new homes by 2025 - which might turn out to be one of the biggest measures today.

Hammond confirms that a "future homes standard" will require the end of all fossil fuel heating in new houses from 2025. So no gas, oil or coal but heat source pumps will become the new norm

"All our homes and buildings must be made efficient, affordable and zero-carbon within the next two decades to address the climate crisis.

Ending the scandal of poor quality new homes is a no-brainer that's good for everyone."

This is amazing. A significant chunk of the Spring Statement is focussed on climate change and the environment. And with some truly meaningful stuff too... No fossil fuel heating systems in new build homes within 6 years is HUGE. a...

2.43pm GMT

Heads-up. The Office for Budget Responsibility has predicted that UK house prices will be falling by the end of this year.

The OBR has downgraded its forecasts for the housing market, due to signs that house price growth has flowed, and subdued turnover in the housing market.

Buried in the detail, however, is ever worsening problems on Stamp Duty. Numbers are horrendous. A further -*additional* 3.5bn shortfall in here, "deteriorated significantly since October". Receipts fell 9.8% in 2018. Action needed, @PhilipHammondUK! pic.twitter.com/4A0pqsEMUY

My Stamp Duty question to the Chancellor just now. Transactions in my constituency down 31% since the reforms. England receipts down 10% in 2018. Another 3bn new revenue shortfall. OBR says "deteriorated significantly since October". Glad @PhilipHammondUK agrees to meet me. pic.twitter.com/20o31Ak8Nc

2.29pm GMT

Back in parliament, Chuka Umunna MP has pointed out that Britain's economy had been expected to grow at over 2% per year, before the 2016 referendum.

Only 11 non pay roll #Conservative MPs in the chamber for the #SpringStatement Speaks volumes about the crisis engulfing the Conservative Party #Brexit @TheIndGroup

2.22pm GMT

Hammond is being criticised for not ending the freeze on benefits (which means the will continue to shrink in real terms).

Heidi Allen MP, who quit the Conservatives to join The Independent Group, says it makes a mockery of 'compassionate' Conservatism.

No end to the benefit freeze from the Chancellor today. The Government simply does not understand how hard life is for vulnerable claimants living on benefits which have not kept up with inflation. The compassionate Conservative dream was just that, a dream. @TheIndGroup https://t.co/hW5ApxOZbl

"Struggling families are desperate for an end to the freeze on working age benefits, but this Spring Statement leaves them out in the cold once again. Already the freeze has saved the Treasury more than was ever intended, so there can be no ongoing justification for these 'stealth cuts' that mean that the poorest in society have borne the heaviest burden from paying off the deficit.

"Today, the Chancellor could have sent a lifeline to low-income families. That he didn't is evidence of Ministers' refusal to confront the reality that families have been left with too little money to live on after three long years of stagnant incomes and rising prices. Funding sanitary products for girls in schools may help with one small area of expenditure, but this will have a minimal impact on poverty overall. It leaves in tatters the prime minister's claim that austerity is over.

2.16pm GMT

Hammond's call for MPs to build a 'consensus' to prevent a no-deal Brexit has caused a stir at Westminster.

Is he suggesting giving up on Theresa May's deal, in favour of a new plan that could be backed by Labour?

Chancellor stunned Westminster then with his words urging MPs to "seize the opportunity", take No Deal off the table and build a consensus.
Treasury team insisted there's not a cigarette paper between their man and the PM ...

Hammond says Brexit uncertainty is, "damaging our economy; it is damaging our standing in the world". Says MPs now need to map out the way forward, and find a consensus in parliament. Sounds rather different to the PM's approach of giving her deal (yet) another whirl...

Treasury spox struggling to explain away what Hammond meant by his remarks about finding a Brexit consensus. "Don't read directionality into that"

2.12pm GMT

Labour's shadow Chancellor, John McDonnell, responded to the spring statement by blasting the government's record:

The Chancellor has the nerve to tell those who have suffered most at the hands of his Government, that their suffering was necessary.

If austerity wasn't ideological, why has money been found for tax cuts for big corporations while vital public services have been starved of funding?

Of course Brexit looms large over everything we discuss.

Even today, the Chancellor has tried to use the bribe of a deal double dividend or threat of postponing the spending review to cajole MPs into voting for the government's deal.

2.02pm GMT

Yael Selfin, chief economist at KPMG, has bad news for the government -- it doesn't currently have enough firepower to handle a no-deal Brexit.

The larger war chest of 26.6bn will not go far enough in the event of a No-Deal Brexit, as the economy will require a significant boost to counter the shock. #SpringStatement @kpmguk

2.02pm GMT

Government on track to meet fiscal targets, with 26.6bn headroom against the structural borrowing target, but unlikely to meet its objective to balance the budget by 2025.#SpringStatement pic.twitter.com/gHrRDODgn8

2.00pm GMT

The Office for Budget Responsibility's verdict is out.

The independent watchdog's top line is that growth has slowed, but the public finances look marginally healthier.

Economic growth in the UK and globally has slowed since the Budget in October, leading us to revise down our near-term GDP forecast. But tax receipts have performed better than we expected in the final months of 2018-19 and we judge that much of this buoyancy will endure.

Together with downward pressure on debt interest spending from lower market interest rates, this delivers a modest medium-term improvement in the public finances. The Chancellor has banked most of it in lower borrowing, but has spent some on higher planned public services spending.

This is up from 15.4 billion in October, as the fiscal costs of the temporary nearterm cyclical weakness of the economy have been swamped by the fiscal gains from higher income tax and lower debt interest spending.

1.47pm GMT

Some reaction from Hammond's side of the House:

Fantastic news on the full protection of Ascension Island, a biodiversity jewel.
Delighted @PhilipHammondUK listened to our campaign. As custodians of one of the largest marine estates in the world, we have a duty to defend it against overfishing and abuse. A big step forward.

Delighted to see @PhilipHammondUK and @hmtreasury make investment in science and research such a big part of the #springstatement- a clear demonstration of the government's commitment to science, as we work to meeting our target of 2.4% of GDP spent on R&D by 2027

This is just surreal. Listening to Phillip Hammond talking about the Tories being the party of business when British companies have no idea what sort of trading arrangements or tariffs they will be facing with the world's largest single market in a fortnight. Reckless & shameful.

Extra money is welcome to bear down on knife crime but the Tories have created this crisis in policing.

Our overstretched officers are already at breaking point, owed thousands of rest days and leave.

It won't paper over the deep cracks in the system.#SpringStatement

Period poverty? Ok.

I would rather see an end to poverty, period. #childpoverty https://t.co/kUaCNILuei

Is the Chancellor deluded or just uncaring?

Education funding is in crisis, yet in line with 'little extras' snub, he's failed to provide long-term funding schools need & give our young people the education they deserve. #SchoolCuts must urgently be reversed. #SpringStatement

1.34pm GMT

As we suspected, there wasn't much new in that statement.

The economic picture for 2019 has darkened, with growth forecast to only be 1.2%, from 1.6% before. Brexit uncertainty, and the slowdown in the global economy, are both probably to blame.

"Leaving with no deal would mean significant disruption in the short and medium term and a smaller, less prosperous economy in the long term, than if we leave with a deal.

Higher unemployment, lower wages, higher prices in the shops. That is not what the British people voted for in June 2016."

Philip Hammond announces a plan to launch a "comprehensive global review of the link between biodiversity and economic growth" as well as an extra 445,000 square km of marine protected area around Ascension Island.

Follow the #SpringStatement here: https://t.co/F9tUL9mX1b pic.twitter.com/13Apf82ulF

1.20pm GMT

Hammond ends his speech by warning MPs that while the economy is fundamentally robust, it is still overshadowed by Brexit uncertainty.

He tells the House:

We cannot allow that to continue. It is continuing our economy, and damaging our standing in the world.

1.18pm GMT

Another rumour is confirmed, as Hammond announces 100m of extra funding to tackle knife crime.

The money will go to violence reduction units, and for more police overtime. That follows heavy lobbying from the Home Secretary Sajid Javid.

Hammond confirms an additional 100m to be made available for knife crime. Javid looks pleased. Spending review, Hammond promises "newly funded manpower" > an admission big cuts to police numbers needs addressing

1.15pm GMT

Hammond has confirmed that he is taking action on period poverty.

The Treasury will fund the provision of free sanitary products in schools from the next school year [as we reported last weekend].

1.14pm GMT

On the environment, Philip Hammond says fresh standards will be introduced for new housing, to mandate the end of fossil fuel heating by 2025.

He also announces a new review into the link between biodiversity and growth.

1.11pm GMT

On housing, Hammond announce a 3bn "affordable homes guarantee" scheme.

A new 3bn Affordable Homes Guarantee scheme, to support delivery of around 30,000 affordable homes"

And 717m from the Housing Infrastructure Fund to unlock up to 37,000 new homes on sites in West London, Cheshire, Didcot, and Cambridge.#SpringStatement pic.twitter.com/9ZF5X7W41M

1.10pm GMT

As expected, Hammond has announced a review of global tech giants, to ensure they pay a fair share in the UK.

He has also asked the competition and markets authority to undertake a study of the digital advertising market.

Very pleased that @PhilipHammondUK has joined with @CommonsCMS in calling for the @CMAgovUK to conduct a review into the digital advertising market. He is right that we must update our regulations and rules to protect consumers in the digital sphere.

1.09pm GMT

The chancellor also announces 45m to the European Bioinformatics Institute for genomics research.

There's also 81m in a new Extreme Photonics Centre in Oxfordshire to develop a new types of laser. "Cutting edge technology", grins the chancellor (whose gags haven't been up to their usual standard)

1.07pm GMT

Hammond announces 79m for Archer 2, a new supercomputer based at the University of Edinburgh, which is five times faster than previous models.

Capable of 10,000 trillion calculations per second, hopefully it's fast enough to solve the backstop issue, he jokes (this is no time for puns, chancellor)

1.05pm GMT

Hammond says PhD level roles will be eliminated completely from visa caps - as part of a push to stimulate research and development in the UK.

"From this autumn we will completely exempt PhD-level roles from the visa caps." - @PhilipHammondUK #SpringStatement pic.twitter.com/5ZgWYaKjNn

1.04pm GMT

The government will, as expected, open a consultation on how to replace PFI contracts.

Hammond also announces a review of low pay in Britain

Review and new remit for Low Pay Commission to be set later in the year. Is this a hint that a National Living Wage will eventually go above the 60% of median target for 2020?

#SpringStatement2019 ultimate objective of ending low pay in the UK. Review of effects of minimum wage rates to be launched.

1.03pm GMT

Philip Hammond's Brexit War Chest has grown to 26.6bn, up from around 15bn, thanks to the lower borrowing forecast by the OBR.

Increased headroom against the fiscal mandate in 2020-21 (from 15.4bn at October's Budget to 26.6bn in the latest figures) means he could 'end austerity' on public services and on benefits, and still be borrowing less than he was projected to previously

1.00pm GMT

Hammond announces 260m of funding for the Borderlands region (areas in Southern Scotland and the North of England).

Great news: Chancellor confirms UK Govt 260 million contribution to #Borderlands Growth Deal. With @scotgov that delivers 345million investment. Won't get much attention today, but transformational long term for our communities across the #Borderlands

1.00pm GMT

Hammond says he wants Britain to embrace the technology of the future, so it can "slay the twin demons of low productivity and low wages".

The upcoming spending review will focus spending on raising productivity, he adds.

12.57pm GMT

The Chancellor @PhilipHammondUK is delivering the #SpringStatement. Here's the economy snapshot. pic.twitter.com/TCBbWQuDSB

12.56pm GMT

Leaving Brexit without a deal would deliver a significant short-to-medium term hit to the productive capacity of the UK economy, the chancellor warns.

Hammond also says it is "just wrong" to think there is a simple way of coping with the consequences of no deal.

12.54pm GMT

Hammond also warns that the progress in repairing the UK economy will be at risk if it cannot agree a "smooth and orderly" exit from the EU.

12.54pm GMT

Significant news. Hammond says he will launch a full, three-year spending review before the summer recess - ready for the next budget - if a Brexit deal is agreed.

He dangles the prospect of more spending on public services, saying Britain could get a deal dividend.

12.51pm GMT

On borrowing, the 2018-19 deficit will be 1.1% of GDP, Hammond says, down from the 1.2% expected in the October budget.

Borrowing this year will be 1.1% of GDP - 3 billion lower than forecast at the Autumn Budget - @PhilipHammondUK #SpringStatement pic.twitter.com/mnBPnr3Oo3

"Less borrowing means less debt - now lower in every year than forecast at the Budget, falling to 82.2% of GDP next year, then 79%, 74.9%, 74%, and finally 73% in 2023-24."
#SpringStatement pic.twitter.com/NLKhhPWT3q

12.48pm GMT

Hammond says the UK will create another 600,00 new jobs by 2023.

The OBR has also revised its wage growth up, to at least 3% each year.

12.47pm GMT

Onto the growth forecasts. As feared, growth in 2019 has been cut significantly, to just 1.2% from 1.6% in the last budget.

But there's good news too - growth in 2021 and 2022 has been revised up.

12.44pm GMT

Philip Hammond is on his feet now, sporting a smart Tory blue tie, to deliver the spring statement.

Let's see what light he can shed on the state of the economy, with less than three weeks until Britain is currently due to leave the EU.

12.30pm GMT

The chancellor has tweeted.... saying he'll make announcements on infrastructure, technology, housing, skills, and green energy today.

I'm on my way to Parliament to deliver the #SpringStatement - the government's response to the forecast from @OBR_UK. I'll be setting out how we'll invest in infrastructure, technology, housing, skills, & green energy, to capitalise on the post-Brexit opportunities ahead. pic.twitter.com/bnrwfDBmQl

12.23pm GMT

Chancellor love to produce a crowd-pleasing surprise or two on these occasions. Brexit uncertainty, though, means any rabbits will probably stay firmly inside Hammond's hat.

.@uk_chancellor Phillip Hammond spring statement (no longer Budget at this time of year), starts in 10 mins. Overshadowed by other events.
More headroom on deficit than at Oct Budget. Otherwise, without Brexit clarity, hard to forecast economic/financial impact of different paths

Chancellor Philip Hammond will have been cheered by the fact government borrowing fell sharply in January thanks to a record tax haul. However, the ongoing (and currently developing) Brexit process may limit his ability to pull any 'rabbit out of the hat'. #SpringStatement pic.twitter.com/AvmQ1gc8KD

12.12pm GMT

We may hear about the 'Brexit dividend' today, but how much do taxpayers actually hand to the EU?

A new website lets you find out -- enter your salary, and it calculates how much of your income tax heads to Brussels. Spoiler alert, it might be less than you think.....

This is SUCH a neat little tool. It calculates your contribution to the EU budget, based on your income. It also lets you first take a guess how much you think it is. I guessed very low, and it was still 700% more than actual figure! Deserves to be shared.https://t.co/3CSGbjlYZj

12.02pm GMT

Prime Minister's Questions is underway now. Our Politics Live blog is tracking all the action:

12.00pm GMT

Philip Hammond told the cabinet this morning that the spring statement will set out measures to support an open and competitive economy, according to Theresa May's spokesman (via Reuters).

Hammond also said it will confirm the resilience of the UK economy, and the progress made "repairing the public finances"....

11.52am GMT

Philip Hammond has emerged from Number 11 Downing Street, and headed to the House of Commons to deliver the spring statement (after Prime Minister's Questions).

As it's not the budget, we didn't get a photoshoot with the traditional red box. Just a polite smile for the cameras.

11.42am GMT

Bloomberg Economics have calculated that the chancellor's war chest - money set aside for a no-deal Brexit - has swelled to over 20bn.

That's up from 15bn in last autumn's budget, thanks to strong tax receipts in January. If Britain leaves the EU under the withdrawal agreement, it could be spent elsewhere.

U.K. Chancellor of the Exchequer Philip Hammond could next week offer the country an extra 5 billion pounds ($7 billion) to end austerity, but only if Parliament backs a Brexit deal with the European Union.

Hammond is expected to receive the windfall to his Brexit war chest when he presents his Spring Statement on Wednesday. He says backing Prime Minister Theresa May's deal would release extra cash for public services that's currently held in reserve to mitigate the fallout from a no-deal split.

ICYM, Hammond could see his "deal dividend" rise to 21bn in his Spring Statement today... if only MPs would back a deal https://t.co/XGKQ81mlDN

11.33am GMT

Alison Thewliss, SNP Treasury spokesperson, says Philip Hammond should announce an emergency budget today, to protect the UK from Brexit confusion.

Later today, @PhilipHammondUK will deliver the #SpringStatement2019.

We asked @theSNP Treasury Spokesperson @alisonthewliss what her party is hoping to see in the Statement. pic.twitter.com/yedY6HOI7K

11.24am GMT

Once upon a time, the Conservative party promised to eliminate Britain's budget deficit by 2015. They failed (of course), and are now aiming to wipe it out by the middle of the next decade.

But we have seen progress on cutting government borrowing. Last October, the OBR estimated that net borrowing could drop to 25.5bn for 2018-2019, down from 153.1bn in 2009-10 after the financial crisis.

11.10am GMT

No arguing with this statement, from our parliamentary sketch writer.

Chancellor about to give spring statement when he has no idea what state the economy will be in in two months time. British politics in 2019

10.53am GMT

Rupert Harrison of investment giant Blackrock (and a former chief of staff for George Osborne) says the spring statement forecasts don't mean very much.

Harrison told Sky News that they're effectively 'fantasy forecasts', due to Brexit uncertainty.

If we do get a no-deal Brexit, Philip Hammond will be spending a lot more money on emergency measures.

If we get some lifting of the uncertainty, I think there will be more money for public services.

This is an opportunity to send a strong and supportive message to businesses at this very tricky time, even though there's a limit to what he can do.

10.30am GMT

City investors are more concerned by the Brexit mess than the chancellor's statement.

They'll still be watching at 12.30pm, though, to hear the latest growth and borrowing forecasts.

Of particular importance will be the latest forecasts for economic growth and public finances.

It's expected the former is to be revised down considerably bearing in mind the Organisation for Economic Co-operation and Development (OECD) recently reduced their forecast for 2019 economic growth for the UK down to just 0.8%, well below the Office for Budget Responsibility's (OBR) previous prediction of 1.6%.

Nevertheless, based on January data the government's tax income is likely to have worked some way towards reducing the budget deficit.

Economic growth remains woefully subdued, at about 0.2% last month, which will make it less likely for the Chancellor to end austerity measures. This would normally be a negative for the pound but a no-deal Brexit vote will trump that.

With so much political uncertainty at present it's difficult to see how he could possibly commit to any large scale spending plans or initiatives at this point in time.

Indeed, it may well be best for the Chancellor to simply stand-up and say at this stage he has nothing to say. At the very least he must be relieved the Spring Statement is now just that and no longer a full blown March Budget.

10.08am GMT

Although Hammond's hands are rather tied, MPs are still hoping to hear some good news in the spring statement.

Labour's Alison McGovern says the chancellor must do more to tackle the problems with universal credit:

At the budget, the Chancellor made a big show of accepting changes to the work allowances in universal credit that he argued would help address some of the Osborne-era cuts. In essence, this was just making the cut somewhat less punitive. Hammond has some way to go if he is to make sure that no one is worse off under the new system.

The two-child policy remains in place, for example, and we still haven't had a vote on managed migration. Given that this is allegedly 'not a fiscal event', we can assume there is not much hope.

TODAY - the #SpringStatement at 12.30 - what to watch for & what Hammond doesn't want you remember... #Brexit https://t.co/6Tv928uvso

On Monday I wrote to the Chancellor urging him to use today's Spring Statement to mitigate some of the damage caused by Conservative cuts. It is time the Government listens to Labour & compensates disabled people fully for the loss of the SDP. pic.twitter.com/IspCfIhi08

Among the Brexit angst today is the 'spring statement' aka. a mini budget. I am hoping (without expectation) that there will be more money for our schools.

#SpringStatement is today after #PMQs - amidst economic updates from @PhilipHammondUK I am hopeful we will hear more on #Borderlands proposals for extra support for the #Borderlands region that @JohnStevensonMP + I working on for some time -we met with #Chancellor 10 days ago pic.twitter.com/Q7t88yYjND

9.36am GMT

The Treasury's system for funding devolved areas of the UK is under attack from different directions after the National Audit Office, the spending watchdog, said its decisions were sometimes hard to understand, our Scotland editor Severin Carrell reports.

"In light of this investigation, we call on government to consider the long-term future of the formula, and to consider an independent needs-based funding system covering all regions of the UK.".

"The Treasury works closely with all three devolved administrations to ensure they understand how these arrangements have been applied."

9.26am GMT

The Financial Times says Philip Hammond will launch a consultation into new ways to fund Britain's infrastructure.

This follows Hammond's decision to end the discredited PFI scheme in last October's Budget. That creates a question of how the government can team up with the private sector to pay for major project, such as new hospitals and roads.

9.07am GMT

Philip Hammond is expected to take action on another important issue - period poverty.

Following pressure from campaigners, the chancellor will fund a scheme to make free sanitary products available from September.

The chancellor will announce that he is asking Damian Hinds, the education secretary, and Penny Mordaunt, minister for women and equalities, to design a scheme that would be implemented in all secondary schools in England.

The scheme is expected to mirror one already in place in Scotland. It is understood that the Treasury has not yet carried out a detailed costing, but when the Scottish equivalent was announced last year, it was expected to cost 5m.

9.00am GMT

Labour deputy leader Tom Watson has welcomed Hammond's plan to give consumers more control over their data held by Big Tech:

We have a broken digital market of data monopolies who think they are above the law. In today's spring statement the Chancellor must take decisive action to rebalance a distorted market.https://t.co/2R7FkyAuwd

8.51am GMT

The Sun is reporting that Hammond will unveil a 100m funding package for the police, in response to the surge in knife crime.

They say most of the new cash will be spent on new violent crime units in seven worst affected UK areas -- London, the West Midlands, South Yorkshire, West Yorkshire, South Wales and Manchester.

It is a major victory for Home Secretary Sajid Javid, who demanded the cash after the surge in knife killings this year.

Chancellor Philip Hammond had offered a new package of 50 million but Mr Javid held out for more.

Today's spring statement will include a 100m funding boost for police forces. The Chancellor will provide the cash in a bid to tackle rising levels of violence on Britain's streets. He has previously urged forces to divert existing resources from lower-priority crime instead of

demanding more, but the Home Secretary has backed senior officers who said they needed extra money to pay for overtime. Around two-thirds of the cash injection is to be targeted at more street policing, while the rest will fund specialist Violence Reduction Units.

8.43am GMT

The world's technology giants may find themselves in the firing line in today's spring statement.

Our economics editor Larry Elliott explains:

A fresh bid to curb the market power of US tech giants will be signalled by Philip Hammond on Wednesday when he welcomes the findings of an independent review calling for government action to ensure companies including Google, Facebook and Apple face stiffer competition.

The chancellor will use his annual spring statement to promise action after a review conducted for the Treasury by Jason Furman, Barack Obama's chief economic adviser, concluded that the dominance of the big digital players was curbing innovation and reducing consumer choice.

8.42am GMT

Shadow chancellor John McDonnell released a video clip last night, urging Hammond to end austerity once and for all.

Local government is on its knees, child poverty is rising, and people are being driven to food banks by the government's universal credit system, McDonnell says:

Tomorrow, the Chancellor will deliver the #SpringStatement2019 to Parliament. This is the week we demand an end to austerity once and for all. #SpringStatement pic.twitter.com/rS1kXOfoVK

8.37am GMT

Here's our preview of what to expect today:

8.29am GMT

We'll be tracking the spring statement here, while Politics Live focuses on Brexit:

8.04am GMT

Good morning.

Cabinet convenes at 8am to discuss Chancellor's Spring statement. But, as one cabinet source told me, they'll be 10mins on that & the rest on Brexit and the No Deal vote...
Spring statement at 12.30pm where CX will pledge billions of pounds of spending if UK agrees deal #MV3 2/

@PhilipHammondUK will be rewriting his spring statement speech right now: expect some corruscating words for the Tory MPs who are about to add further uncertainty to the British economy - and jeopardising 15bn-20bn of public spending, currently held in a Brexit insurance fund

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