North West Hampshire MP Kit Malthouse has welcomed the news that the UK is now running a primary budget surplus as Chancellor Philip Hammond announced in the Spring Statement that the UK economy is growing at a faster rate than predicted in November.
The news of a primary surplus means that the Government can cover day to day spending with tax receipts and is only required to borrow to cover investment.
Growth is forecast to be 1.4% this year, 0.1% higher than forecast and given that the UK economy beat the forecasts in 2017, the Chancellor declared that “forecasts are there to be broken” and backed Britain to do so again this year.
The Chancellor said borrowing was due to fall in every year of the forecast and told the House of Commons debt will fall as a share of GDP from 2018-19.
He said that the news was “light at the end of the tunnel” for the UK economy.
The Spring Statement did not include announcements of tax or spending changes and was not a fiscal event. The decision to hold only one budget each year gives businesses far more predictability and certainly and has been welcomed by industry groups. The UK was the only major economy to have effectively held two budgets each year.
Speaking after the Statement, Kit said: “These growth numbers are cheering and I hope the economy continues to beat the forecasts on growth and reducing the deficit. The British people have worked hard for eight years now to close the deficit this far and we need to complete the job. We cannot afford to let the Labour Party squander this effort.”