Britain prepares to budget for Brexit

UK Chancellor Philip Hammond set to unveil his "difficult decisions" this afternoon...

Britain prepares to budget for Brexit

Philip Hammond. Image: Laura Lean / PA Wire/Press Association Images

It's Budget Day for Britain, with UK Chancellor Philip Hammond unlikely to offer taxpayers a large-scale giveaway as he outlines the economic plans for Brexit this afternoon.

Hammond will say he's ready to take further "difficult decisions" on tax rises and spending cuts to balance the books, but that he'll promise to do everything he can to help ordinary working families.

Economic advisor Ruth Lea doesn't think there'll be any surprises:

"There aren't going to be many rabbits out of the hat, quite honestly. I think he's going to continue basically with austerity. And I think he's made that fairly clear.

"He's said there's no room for spending sprees. We have a public sector debt that is £1.7 trillion, which is absolutely eye-watering."

The UK Chancellor is building a £60bn Brexit safety net, with economists expecting him to announce a £45bn windfall over the next five years from tax receipts.

Extra spending will be paid for by additional taxes in what is expected to be a fiscally neutral budget.

A reform to the tax treatment of the self-employed is expected to raise hundreds of millions of pounds, while Hammond will hold back about £50bn of fiscal space against his watered-down fiscal rules to deal with a possible future deterioration in public finances during the Brexit process.

The long-term focus will also be evident in a series of reviews into thorny public policy issues from social care to business rates.

An extra £1bn to £1.5bn will be found to fund immediate social care pressures. Rolling reviews of three to four years will also be announced on social care and business rates for council funding.

There is some expectation of a change to the way funding formulae for a variety of local services are calculated, including changes to "needs-based" systems.

Faced with the threat of a revolt by Tory MPs, he will also find funds to help UK firms hit by the sharpest rises in business rates, and he is also looking to overhaul the whole business rates system. The first review of business rates in seven years has left some firms facing increases of 400%.

Hammond will also announce a new £5m fund in the Budget for women's equality projects, to mark the upcoming centenary of legislation which gave women the right to vote.

Shadow chancellor John McDonnell told Sky News he expected the Government to do more in the Budget.

He said: "They're living in a different world. People are suffering at the moment.

"Stagnating wages, prices increasing because of inflation, insecure work, cuts to public services - they've got to address those issues."

Netflix is also set to feature, with Hammond looking to crack down on small print being used to mislead customers. He also wants an end to deals where customers are offered a free trial of the service, asked for their payment details and then fail to cancel in appropriate time and get billed, as used by the likes of Amazon and Netflix.

Additional reporting by IRN