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Tuesday, 15 November 2016

Labour urges Chancellor to ditch austerity in Autumn Statement

Written by The Press Association

The Government's "shambolic" approach to Brexit risks hitting workers in the UK, Labour warned as it called on Chancellor Philip Hammond to abandon austerity in his Autumn Statement.

Shadow chancellor John McDonnell will use a speech to demand extra support for people on low and middle incomes and U-turns on welfare cuts from Mr Hammond.

Ahead of the Autumn Statement on November 23, the Chancellor also came under pressure from company bosses to address wavering business confidence in the wake of the vote to leave the European Union and Donald Trump's US election success.

Mr McDonnell will highlight reports of a rift between Mr Hammond and his Cabinet colleagues, claiming the "weak" Chancellor has been isolated over the approach to negotiations with the EU.

He will accuse ministers of plotting a "closed-minded Brexit" that "works only for bankers and the rich, instead of one that's based on fairness and works for the rest of us".

"They have the wrong ambitions for the economy and the wrong ambitions for Brexit, which means they will continue to undermine the ambitions of working people," he will tell an audience in central London.

In a suggestion that Mr Hammond lacks the influence of previous occupants of Number 11, Mr McDonnell will say: "The CEO of Nissan probably knows more about our Brexit negotiating position than the Chancellor.

"Britain cannot afford a weak Chancellor who cannot find his voice, when our country faces the biggest economic challenges for a generation. It's time he steps up to the task and stands up to his Cabinet colleagues."

Setting out three tests for the Chancellor, Mr McDonnell will say: "We need a credible fiscal framework that supports Brexit; we need actual support for those in work on low and middle incomes; and we need secure and properly funded public services.

"We want to see an end to austerity, with the NHS and social care properly funded and ESA (employment and support allowance) and Universal Credit cuts reversed.

"We want to see an end to tax giveaways for the wealthy.

"And we need a serious commitment from government to invest across the whole of our country."

The Institute of Directors (IoD) released survey figures indicating business confidence had declined in recent weeks, with 50% of the 1,071 respondents asked between October 12 and 27 saying they were pessimistic about the economy over the next 12 months, while 30% said they were optimistic.

The -20% net rating in October is in contrast to a month earlier, when there was a +15% rating.

But the survey indicated that bosses were more positive about the health of their own firms, with the October survey showing 46% were optimistic and 21% were pessimistic.

IoD director general Simon Walker said: "Business leaders are becoming experts at living with political uncertainty. We can't know yet the future shape of the UK's relationship with the EU, or the direction in which Donald Trump will take America, but we do know that Britain's economic fortunes are dependent on our companies continuing to hire and invest.

"The good news is that our members are more optimistic about their companies. Their natural response to more difficult trading conditions is to innovate and seek out new customers."

The IoD urged Mr Hammond to use tax breaks to boost investment, set more ambitious targets for broadband speeds, improve connections to Stansted Airport while a third runway is built at Heathrow and consult on radical tax reforms to deal with the global economy including finding a more suitable replacement for corporation tax.

Mr Walker said: "This is a moment for the Government to act decisively to make it easier for firms to expand and find more opportunities. We know that there isn't a limitless source of funds, so we urge the Chancellor to make tax changes that incentivise investment, alongside targeted infrastructure investment."

Responding to Mr McDonnell's comments, chief secretary to the Treasury David Gauke said: "Labour have zero credibility when it comes to the economy.

"They drove Britain to the brink of bankruptcy last time, opposed everything we did to clear up the mess - and now all they offer is a recipe for economic ruin.

"Ordinary working people would pay the price for Jeremy Corbyn's fantasy economics."

Copyright (c) Press Association Ltd. 2016, All Rights Reserved. Picture (c) Daniel Leal-Olivas / PA Wire.