Budget 2017: Hammond mulls tax rise to cover extra spending

Written by John Ashmore on 6 March 2017 in News
News

Chancellor will not use improved growth forecasts to borrow more money, it is reported

Philip Hammond

Philip Hammond is reportedly planning to raise some taxes to cover extra spending commitments in this week's Budget. 

Despite an improved economic outlook, the chancellor will apparently reject calls to borrow extra to fund priority areas such as social care and business rate relief. 

The Office for Budget Responsibility is expected to upgrade its growth forecast for this year from 1.4% to nearer 2%, with an improved picture on government borrowing also giving Hammond extra leeway. 


Budget 2017: Treasury urged to avert "disastrous" public service failures – as departments asked to model latest cuts
Treasury's £3.5bn efficiency review 'could cost 25,000 jobs', union warns
"Crisis, cash, repeat" is no way to run public services – the Treasury must explain its spending decisions


However, The Times reports that he will not use that headroom to borrow any more money, instead relying on a combination of tax rises and cuts in other spending to fund any more giveaways.

He has limited room for manoeuvre, as the last Tory manifesto committed the government not to raise income tax, VAT or national insurance.

One area Hammond may target is self-employed people, who currently pay lower national insurance contributions than employees. Duties on tobacco and alcohol could also be increased.

Along with more action on health and business rates, the government has already announced a £23bn plan to improve productivity and a £500m a year revamp of technical education. 

About the author

John Ashmore is chief reporter for PoliticsHome.com, where a version of this story first appeared

Share this page

Further reading in our policy hubs

Add new comment

Contact the author

The contact details for the Civil Service World editorial team are available on our About Us page.

Related Articles

Related Sponsored Articles

The image contains text summarising the following article 5 Effective Approaches for Learning Management
27 June 2014

Cornerstone provide advice on effective approaches for learning management.

BYOD: The critical balancing act
3 April 2014

How can organisations allow employees to use their own devices to access corporate information...

Mind the Gap
3 April 2014

Given the rhetoric surrounding the shift to the modern workplace and the importance of centring...