Hammond scraps Osborne's surplus target

CHANCELLOR Philip Hammond will today demolish the cornerstone of his predecessor's economic plan as he abandons attempts to balance the country's books by 2020.

Chancellor of the Exchequer Philip Hammond and his wife Susan Williams-Walker walk to the International Conference Centre as they arrive at the Conservative party conference in Birmingham. Stefan Rousseau/PA Wire

Mr Hammond will confirm the Government will scrap the target to have the country’s current account in surplus by 2020 when he speaks at the Conservative Party conference in Birmingham today.

He will immeditaly use the new freedom to announce a multi-billion financial package to try and accelerate house-building.

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In the aftermath of the vote to leave the European Union, then chancellor George Osborne all but abandoned his plan to have a surplus on Government spending by 2020, insisting there would need to be “flexibility” following the uncertainuty triggered by the vote.

Mr Hammond will go further today saying: “The fiscal policies that George Osborne set out were the right ones for that time.

“But when times change, we must change with them.

“So we will no longer target a surplus at the end of this Parliament.

“But make no mistake. The task of fiscal consolidation must continue.”

Mr Hammond last week confirmed the scrapping of another of Mr Osborne’s flagship policies, the help to buy scheme designed to support families onto the housing ladder.

Today he will promise a new £3bn fund to provide loans to small housebuilders and a £2bn investment in a drive to build 15,000 homes on surplus public sector land by 2020.

The new funding will include £2bn of additional Government borrowing.

The focus on increasing the supply of new homes rather than using Government cash to help families afford homes represents another significant shift away from the Cameron government’s agenda.

Mr Hammond will say: “There has been a housing shortage in this country for decades, and this Government is determined to take action to tackle it.

“We’ll use all the tools at our disposal to accelerate housebuilding and ensure that over time, housing becomes more affordable, that is why we are committing £2 billion of additional investment towards this.”

Mr Hammond’s speech will be part of a determined effort by the Conservatives to switch attention to the domestic agenda today after the first day of the conference was dominated by Britain’s departure from the European Union and international affairs.

Brexit Secretary David Davis described the decision to leave the EU as a “a once-in-a-lifetime opportunity for Britain to forge a new place for itself in the world”.

The Haltemprice and Howden MP insisted it was time for the country to unite.

“I am delighted that many who argued for Remain are now focussed on making a success of Brexit.

“But there are some, on both sides of the argument, who want to keep on fighting the battles of the campaign.

“I say to them: the campaign has finished. The people have spoken. The decision is made.

“So whether you were for leave or for remain, help us seize the opportunities that are now before us.”

Despite Britain’s decision, Mr Davis insisted this country wanted the EU to succeed and rejected the idea that leaving meant “pulling up the drawbridge”.

He said: “We will always welcome those with the skills, the drive and the expertise to make our nation better still. If we are to win in the global marketplace, we must win the global battle for talent.

“Britain has always been one of the most tolerant and welcoming places on the face of the earth. It must and it will remain so.”

Foreign Secretary Boris Johnson said Brexit did not mean Britain was “leaving Europe” and the UK would “remain committed” to European co-operation in a range of areas.

But he claimed leaving the EU would allow Britain will “also be able to speak up more powerfully with our own distinctive voice”.

Repeating the “Global Britain” phrase Government figures are now using to characterise post-Brexit Britain, Mr Johnson said the UK would become “a catalyst for change and reform and economic and political freedom”.