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BBC: Chancellor Philip Hammond 'to target housing and NHS'


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Chancellor Philip Hammond 'to target housing and NHS'

Philip HammondImage copyright HOC

Chancellor Philip Hammond plans to use "headroom" in the public finances to target spending on housing and health, a close friend has told the BBC.

Stephen Hammond - a former transport minister - said the chancellor wants to use next Wednesday's Budget to "attack problems" that contributed to the Tories' poor election performance.

The chancellor said in March he had "headroom" - available cash - of £26bn.

Labour says he needs to tackle what it calls the squeeze in living standards.

The chancellor will lay out the government's financial plans on November 22.

The £26bn was dubbed a "war chest" - designed to help him navigate the economy through Brexit.

'About to turn a corner'

Stephen Hammond, who has known the chancellor for more than 20 years, told BBC Two's Newsnight that the chancellor was planning to use the Budget to reach out to voters who had abandoned the Tories.

The party lost its overall parliamentary majority in June's election, with voters in every age group up to late 40s preferring Labour. Housing was cited as a key concern by younger voters.

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Stephen Hammond told Newsnight: "I think what the chancellor will be doing is saying 'look it would be silly to throw away all the good work we've done in getting down the deficit level, we're about to turn the corner on debt....and when you look at what I did in my autumn statement I created some headroom.... and I will be looking at what are the ways that headroom could be used to attack the problems that so many people have spoken to me about'."

The former transport minister predicted a strong focus on housing in the Budget.

"I am absolutely convinced that he'll be looking at some housing ideas.

"And there are some really creative ones about looking at loan guarantees for small builders and things in that sort of area. But also he knows that we need to build more social housing and affordable housing. I think he'll be looking at ways he can encourage that."

'A bloodbath'

Nick Boles, a former housing minister, told Newsnight the Conservatives would be writing themselves out of the election script unless they do more to help people without mortgages.

The Financial Times reported last month that about two-thirds of the chancellor's "war chest" may have been wiped out in light of what Treasury officials described as a "bloodbath" in the public finances.

The warnings came on the eve of a report by the Office for Budget Responsibility highlighting poor productivity.

Amid this background, Stephen Hammond predicted that the chancellor would not abandon his reputation as a cautious figure. He said the chancellor would not deviate from his fiscal rule which is to reduce the budget deficit to below 2% of national income by 2020-21.

The former minister said: "It's a bit like running a marathon getting to the last half mile and saying, oh hell - I'll turn round and go back to the start. Philip isn't going to do that.

"It would be absolutely madness to give up on getting the economy and the finances back into a good shape."

Anneliese Dodds, the shadow financial secretary to the Treasury, said the chancellor should outline ambitious plans to tackle income inequality. A government source said the chancellor would adopt a balanced approach on his Budget.

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Budget 2017: Plans to build 300,000 homes a year

  • 19 November 2017
  • From the section Business
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House buildingImage copyright PA

Philip Hammond says next week's Budget will set out how the government will build 300,000 new homes a year.

But the chancellor said there was no "single magic bullet" to increase housing supply and the government would not simply "pour money in".

Ministers want to speed up developments where planning permission has been granted and give more help to small building firms, he added.

Labour says ministers "still have no plan to fix the housing crisis".

The shortage of housing is expected to be one of the themes of Wednesday's Budget, with Mr Hammond under pressure to ease the difficulties faced by first-time buyers trying to get a deposit.

Speaking on the BBC's Andrew Marr Show, the chancellor said it was "not acceptable" that young people find it so hard to buy a home, and promised to set out how the government would keep its "pledge to the next generation".

He did not commit to the £50bn reportedly being demanded by Communities Secretary Sajid Javid to finance a house-building drive, but committed to the target of 300,000 new homes.

He insisted the government was delivering new homes at record levels, with 217,350 "additional dwellings" in England last year, but acknowledged more needed to be done.

Focusing on sites where planning permission has been granted, he said the government would use the "powers of state" to get "missing homes built".

It also plans to pay to clean up polluted industrial sites for house building, get town hall bosses to allocate small pockets of land to small developers and guarantee loans by banks to small house builders, he said in an interview with the Sunday Times.

The chancellor's Budget speech is also expected to include:

  • £75m for artificial intelligence
  • £400m for electric car charge points
  • £100m to boost clean car purchases
  • £160m for next-generation 5G mobile networks across the UK
  • £100m for an additional 8,000 fully-qualified computer science teachers supported by a new National Centre for Computing
  • A retraining partnership between the TUC (Trade Union Congress), CBI (Confederation of British Industry) and the government
  • £76m to boost digital and construction skills
Image caption The government wants to improve access to finance for businesses to build electric car charge points

The chancellor is also expected to announce regulation changes to allow developers to apply to test driverless vehicles.

Writing in the Sun on Sunday, he said investment would "prepare the ground" for the cars to be on roads by 2021.

Labour shadow chancellor John McDonnell said the Budget needed to show a "genuine, decisive change of course" and not "empty promises".

Writing in the Sunday Mirror, he said the chancellor had an opportunity to address the consequences of his austerity programme.

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