- Title: British finance minister's Autumn Statement on budget criticised
- Date: 23rd November 2016
- Summary: LONDON, ENGLAND, UNITED KINGDOM (NOVEMBER 23, 2016) (REUTERS) BIG BEN CLOCK TOWER OBSCURED BY LEAVES HOUSES OF PARLIAMENT VARIOUS OF BIG BEN PARLIAMENT HANDS SKIMMING THROUGH AUTUMN STATEMENT BOOKLET GOVERNMENT MINISTER FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY, GREG CLARK, WALKING WITH JOURNALIST AND ADVISERS (SOUNDBITE) (English) GOVERNMENT MINISTER FOR BUSINESS, ENERGY AND INDUSTRIAL STRATEGY, GREG CLARK, SAYING: "This is very much with a view on the medium and long term horizon rather than a countervailing response to Brexit. It's not that kind of short term fiscal stimulus. So, I think that's the right way to think about it. I think the fundamentals are strong. The OBR have reflected a weakening in growth but not a collapse in growth, so I think that sober, sensible approach is the right one to take." VARIOUS OF MEDIA OUTSIDE PARLIAMENT VARIOUS OF SHADOW ECONOMIC SECRETARY, JONATHAN REYNOLDS, WALKING (SOUNDBITE) (English) SHADOW ECONOMIC SECRETARY, JONATHAN REYNOLDS, SAYING: "But the new position we are moving to. It's not one that really tackles the big issue. How are we going to tackle productivity? How are going to improve our infrastructure? How will this country compete in that post-Brexit phase? We haven't got the answers to those questions and what it's meant is that the predictions for the deficit and the debt, additional borrowing I think, 220 billion pounds of additional borrowing in this parliament. It's very disappointing." GENERAL SECRETARY OF TRADES UNION CONGRESS, FRANCES O'GRADY, AND UNIDENTIFIED AIDE WALKING (SOUNDBITE) (English) GENERAL SECRETARY OF TRADES UNION CONGRESS, FRANCES O'GRADY, SAYING: "Well, it's the very big elephant in the room, with those projections showing that Britain faces a very bumpy ride ahead. My concern is that this autumn statement was supposed to get Britain ready for Brexit but it certainly isn't doing anything to protect working people." VARIOUS OF PARLIAMENT BUILDING FROM DIFFERENT ANGLES
- Embargoed: 8th December 2016 18:05
- Keywords: Autumn Statement Greg Clark TUC Frances O'Grady Labour
- Location: LONDON, ENGLAND, UK
- City: LONDON, ENGLAND, UK
- Country: United Kingdom
- Topics: Budget/Taxation/Revenue,Government/Politics
- Reuters ID: LVA00159O0U2V
- Aspect Ratio: 16:9
- Story Text: British politicians had mixed reactions on Wednesday (November 23), after the government ramped up its borrowing forecasts by much more than expected and said the vote to leave the European Union would weigh heavily on the economy.
Chancellor Philip Hammond said in his Autumn statement that Brexit made it "more urgent than ever" to invest in tackling Britain's long-term weaknesses, including one of the worst productivity growth rates among rich economies.
In an attempt to prepare Britain for leaving the EU, Hammond announced the launch of a fund to invest 23 billion pounds in rail, telecoms and housing infrastructure over the next five years.
But the Minister for Business, Energy and Industrial Strategy Greg Clarke said the budget took a long term view.
"It's not a countervailing response to Brexit. It's not that kind of short term fiscal stimulus. I think that's the right way to think about it. I think the fundamentals are strong," he told Reuters.
The Office for Budget Responsibility, Britain's independent budget forecasters, said gross domestic product would grow by 1.4 percent in 2017, down from an estimate of 2.2 percent made in March, before voters decided to leave the EU.
The OBR also saw economic growth in 2018 at 1.7 percent compared with March's forecast of 2.1 percent.
Hammond said the OBR believed uncertainty about Britain's trading relationships with its EU neighbours - who buy nearly half the country's exports - will cut growth by 2.4 percentage points over coming years.
"The OBR have reflected a weakening in growth but not a collapse in growth, so I think that sober, sensible approach is the right one to take," Clark added.
Opposition Labour Party politicians accused the Chancellor of lacking an economic plan to counteract the effects of Britain leaving the EU.
"How are we going to tackle productivity? How are going to improve our infrastructure? How will this country compete in that post-Brexit phase. We haven't got the answers to those questions.. It's very disappointing," said Labour's shadow Economic Secretary, Jonathan Reynolds.
Britain will need to borrow 122 billion pounds more over the next five years than it expected in March, before the Brexit vote, the country's budget forecasters said in the first fiscal update since the vote in June.
Frances O'Grady, the General Secretary of the Trades Union Congress (TUC) - representing the combined voice of British trade unions - said she was disappointed with Hammond's statement and response to Brexit worries.
"It's the very big elephant in the room, with those projections showing that Britain faces a very bumpy ride ahead. My concern is that this Autumn statement was supposed to be getting Britain ready for Brexit but it certainly isn't doing anything to protect working people," she said.
Britain's economy has so far largely withstood the shock of the Brexit vote, wrong-footing the Bank of England and almost all private economists who expected a bigger immediate hit.
But Prime Minister Theresa May has said she will trigger the formal divorce talks by the end of March, ushering in years of uncertainty over the future shape of Britain's relationship with the world's biggest trading bloc. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2016. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
