BUDGET 2017: The key questions as Chancellor Philip Hammond prepares to give Budget

Share this article
0
Have your say

Ahead of our live coverage and what the Chancellor Philip Hammond's Budget will mean for Lancashire, we answer some of the key questions.

:: Why is it so important?

Budget 2017

Budget 2017

Apart from being the major set-piece event where the Chancellor sets out how the Government will spend the nation's money, this Budget arrives at a time of acute political sensitivity.

Since losing the Tories' parliamentary majority, and some of her authority, at the general election, Theresa May has suffered a series of setbacks including Cabinet resignations and a botched coup attempt after a mishap-strewn party conference speech.

There is also a lot on the line for Mr Hammond, who will have Brexiteers who want him sacked over his perceived support for a "soft" Brexit ready to pounce on any mistakes.

:: What are the immediate pressures on the Chancellor?

Many Tory MPs are said to want a bold change in direction after Labour's unexpected gains in the election on an anti-austerity ticket and with an apparent surge in youth support.

Mr Hammond has already announced plans to get 300,000 homes built a year, which should help millennials, but has rejected suggestions from Communities Secretary Sajid Javid to borrow tens of billions of pounds to embark on a massive housebuilding programme.

There have been suggestions the Chancellor will also move to cut the waiting time for Universal Credit welfare payments from six weeks amid Tory and opposition concerns it is pushing people into debt.

Mr Hammond is facing calls to give public sector workers a pay rise but could face a backlash if he does not provide new money and asks, for example, the NHS to find extra wages for nurses from already stretched budgets.

:: Is the tone important?

The Chancellor used a Sunday newspaper interview to reject comparisons to Eeyore, insisting he is an optimist in a bid to soothe Brexiteers who see his gloomy outlook as a potential obstacle to Britain leaving the EU with a good deal.

He will have to prove that in the House of Commons under difficult circumstances, in a long speech that will be littered with dry facts and figures and with some Leave-backing MPs on the benches behind him perhaps less ready to offer vocal support.

:: What about the economy more generally?

The fact that prices are rising faster than wages, giving people a real-terms cut in earnings, frames the Budget.

Mr Hammond has predicted rising inflation, widely blamed on Brexit, will turn around in the New Year, but has already announced a string of measures to boost productivity and create higher-skilled, higher wage jobs.

These include a relaxation in regulations for the testing of driverless cars, a £1.7 billion boost for transport within cities, and high-tech investment in artificial intelligence and 5G mobile networks.

:: Will Mr Hammond and Mrs May come out unscathed?

Budgets can unravel as the detail is unpicked in the days after the set-piece speech, which is often precision-engineered to deliver positive headlines.

The stakes are too high for Mr Hammond to make any mistakes this time.

Any slip-ups like his quickly abandoned Spring Budget plans to hike national insurance contributions for the self-employed could spell the end of his chancellorship.

That in turn could further weaken Mrs May going into a crucial phase of Brexit negotiations.

While it may not be possible to please everyone, Mr Hammond must at least do enough to avoid a row with his own party.

He will hope his prediction the Budget marks a "turning point" comes to fruition.