(Bloomberg) -- U.K. Chancellor of the Exchequer Philip Hammond is under pressure from both sides of the political spectrum to end the government’s austerity program in next week’s spring statement, with new figures revealing the depth of job cuts it created.
The local government workforce shrank by around 795,000 jobs since 2010, when Hammond’s predecessor, George Osborne, held his first public spending review, according to Labour Party figures, based on Office of National Statistics data.
Demands on Hammond to lift spending are also fueled by expectations that the government’s budget watchdog will report next Tuesday a surprise improvement in public finances, because of faster growth and lower borrowing than it predicted in November.
“The Chancellor must take the opportunity, next week, to bring forward the funding our councils need and stop using them as human shields to drive through his spending cuts,” Labour’s finance spokesman, John McDonnell, will say in a speech tomorrow in London, according to extracts emailed by his office.
For the first time in over 20 years, the Chancellor won’t make a budget announcement in the spring, instead preparing a slimmed-down ministerial statement that will consist mainly of forecasts for growth, inflation, borrowing and debt. His major budget announcement is instead planned for November.
Nick Timothy, Prime Minister Theresa May’s former adviser, said expectations that the government has recorded the U.K.’s first budget surplus for a 12-month period since 2002, without counting investment, should spell the end of austerity.
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“Maintaining fiscal discipline remains vital, but the debt crisis has receded and the big economic issues we face are no longer about fiscal credibility but our poor productivity and whether growth is fast enough,” he wrote in the Telegraph.
Separately, the Financial Times on Thursday cited Conservative lawmakers including Bim Afolami and Heidi Allen as calling on Hammond to increase spending.
The government’s “balanced approach’’ allows more spending on public services and local authorities will have 830 million pounds ($1.1 billion) extra next year, Robert Jenrick, the Exchequer Secretary to the Treasury, said in an emailed statement.
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