MPs on the Treasury committee have branded chancellor Philip Hammond’s aim to move from a budget deficit into a surplus by the mid-2020s as not credible anymore since austerity was relaxed slightly last year.
Hammond is due to give his spring statement on March 13, but the MPs have said that the surplus target “should be replaced before the next budget with something that accurately reflects government policy and priorities, which clearly do not include running a budget surplus”.
Reuters reports that while the government has been successful in cutting the deficit from a tenth of GDP nine years ago to around 1 per cent now, voter pressure had led Hammond to already spend some improved revenues that came in the budget last October.
Reuters quotes a Treasury source as saying that the goal to turn the fiscal deficit into surplus will be stood behind by the government.
The MPs also asked for further information to clarify statements made by Hammond that austerity was nearly over after think tank the Institute for Fiscal Studies reported yesterday that a number of years of real-terms cuts were still slated for many public services.