Hammond to prioritise spending on new homes and transport

In an interview with the BBC, Chancellor Philip Hammond has said he will focus on spending on new homes and transport, ahead of November’s Autumn Statement.

The move counters Hammond’s predecessor George Osborne’s attitude, which aimed to balance the books by 2020.

Hammond maintained that whilst Osborne’s deficit reduction policies ‘were the right ones for that time’, he added ‘ when times change, we must change with them’.

The Chancellor also highlighted that given the uncertainty caused by the Brexit vote, it was ‘pragmatic’ to support growth, despite an ‘eye-wateringly large’ deficit.

He assured the government will still ‘restore fiscal discipline’ but in a ‘pragmatic way that reflects the new circumstances we face’, with greater scope for investment to boost the economy and an extra borrowing of £2 billion to speed up the construction of new homes.

Hammond said: “As we go into a period where inevitably there will be more uncertainty in the economy, we need the space to be able to support the economy through that period. If we don't do something, if we don't intervene to counteract that effect, in time it would have an impact on jobs and growth."

"There is a distinction in my mind between investing in the things that will make Britain's economy more efficient in the future, make transport systems work better, communications systems work better and simply spending more on our day-to-day process of government.”

"We need to keep the lid on day-to-day spending, we need to make government more streamlined and efficient but I do think there is a case that we should look at very carefully for targeted, high-value investment in our economic infrastructure."