The Prime Minister will face both internal and external problems when the budget goes to the House of Commons on Monday.
The Shadow Chancellor John McDonnell has urged MPs to vote down the budget if there is no commitment to pausing and fixing Universal Credit claiming “it’s that important”. In an interview, the chancellor appealed to House members across the aisle saying:
“I am calling on other parties and members of other parties in Parliament to vote down the budget if the Chancellor refuses to halt the roll out of universal credit which is causing such hardship for millions, including many children.”
Food Bank usage in areas where Universal Credit has rolled out has increased 52%. One charity that helps the homeless spoke out against Universal credit, despite the gagging clause against this, saying that people on the benefit are desperate for help. Her charity has seen rises in suicidal citizens, self-harming citizens and women going into prostitution, so they can feed their families.
However, Tory MPs are unlikely to vote down their own budget, especially as a budget is an effective vote of no confidence. The chancellor has hinted at more money for Universal Credit but this is unlikely to solve the multiple problems.
The PM might have difficulty passing the budget if the DUP follow through on their threat to break their confidence and supply arrangement with the Tories if their redlines were breached on Brexit. Leaked plans of the PM’s new Brexit proposal sees Northern Ireland in a different VAT area to the rest of the UK and it is unclear if the DUP will accept this regulatory difference.
There is also a row in the Conservative Party on the direction of public spending. The Prime Minister pledged, again, to end austerity but it is understood the Chancellor is committed to remaining ‘fiscally credible’.
Phillip Hammond has also stated the country would need a new budget should the UK leave the European Union without a deal.
Mr Hammond Sky News:
“If we don’t get a deal…. if we were to find ourselves in that situation then we would need to take a different approach to the future of Britian’s economy. We would need to look at a different strategy. And frankly, we’d need to have a new Budget that sets out a different strategy for the future.”
Hammond is facing pressure to find more money for spending, with even the Express running a headline urging for more spending. Theresa May has pledged an extra £20bn-a-year for the NHS within the next five years which could mean more borrowing or raising taxes.
Mr Hammond is set to announce a five-year, near-£30bn package of investment in Britain’s roads; hundreds of millions of pounds’ worth of investment in broadband. The Ministry of Defence will also get an additional £500m.
This additional spending will anger some on the right of the Tory party who see this an attempt to appease voters rather than trying to control the government’s deficit.