Philip Hammond is confident that if the UK does leave the EU with a deal there will be an economic boost due to a pick-up in business confidence and investment.
He says his role will be "to decide how much of this “Deal Dividend” we can prudently release… …and how we would share it between increased spending on public services, capital investment in Britain’s future prosperity and keeping taxes low… …while continuing to keep debt falling."
Full Spending review pledged
The chancellor says that assuming a Brexit deal is agreed and uncertainty lifted he will launch a "full three-year spending review" before the summer break.
Philip Hammond says this will set departmental budgets beyond the NHS.
He says the review will "reflect the public’s priorities between areas like social care, local government, schools, police, defence and the environment."
Borrowing figures improve
Getty ImagesCopyright: Getty Images
Philip Hammond says however he has good news on borrowing figures.
This year it will be 1.1% of GDP, £3bn lower than forecast at the Autumn Budget.
"Looking forward, borrowing will fall from £29.3bn in 2019-20, then £21.2bn, £17.6bn, £14.4bn and finally £13.5bn in 2023-24 – its lowest level in 22 years," he says.
The chancellor says the government remains on track to meet its fiscal target early.
Growth forecasts cut
Getty ImagesCopyright: Getty Images
Chancellor Philip Hammond has cut growth for this year, now expecting 1.2% compared to October's forecast of 1.6%.
Next year's forecast is unchanged at 1.4%, but then for the final three years he expects 1.6% each year.
Lifting uncertainty 'most urgent task'
Chancellor Philip Hammond is now on his feet and speaking.
He acknowledges the "most urgent task is to lift uncertainty".
However, he adds that the "economy itself is remarkably robust."
US durable goods
US durable goods orders rose 0.4% in January, fuelled by a rise in aircraft orders.
Manufacturers say tariff plan will hit hard
Getty ImagesCopyright: Getty Images
Manufacturing lobby group Make UK, formerly the EEF, says the government's tariff plan in the event of a no-deal Brexit will "still be decimating for our sector as a whole".
"While there is some protection for areas such as agricultural
products and car imports, other areas of manufacturing will be hit hard.
“The decision to avoid controls at the Northern Ireland land
border and applying that to all trading partners across the globe will be very
damaging for the manufacturing sector as inferior products will flood the
market," says chief executive Stephen Phipson.
Allie Renison, head of Europe and trade at the Institute of Directors, has issued a statement after the tariffs announcement.
She says that while cutting tariffs is "a necessary and welcome part" of trade policies it needs to be done in a "measured, open and consultative way".
"All in all, the belated, cack-handed way in which the Government has handled its no-deal planning is one of the main reasons why many businesses will not be prepared for this outcome by 29 March.
"Politicians should be under no illusion - this package of mitigating measures do not help make the case for no-deal. They are rather a reminder of the spike in invidious choices we would face as a country amidst a backdrop of chaos.”
Cost of tariffs
Retail correspondent at the Financial Times tweets
What is the cost of government's plan for tariffs?
Duncan Brewer, partner in the retail and consumer team at Oliver Wyman, has run the numbers:
“Under a no-deal Brexit scenario, the additional cost to consumers
will be £961 per household per year, due to a combination of tariffs, non-tariff
barriers and labour cost increases
“The impact on consumers
with the Government's new tariffs is slightly lower, at £810 per household per
year. While many imports are now zero-rated, the major cost that importers will
continue to incur are non-tariff barriers, paperwork, delays at the border and
other administrative costs.
“Grocers will be one of the hardest hit with
their costs rising by nearly 6% - these costs will be passed onto consumers in
the form of higher costs for everyday food and drink products."
‘Don’t forget older people’
Kevin Peachey
Personal finance reporter
Getty ImagesCopyright: Getty Images
The financial sector should see the opportunities
available from an ageing population, bankers have been told.
Rain Newton-Smith, chief economist at the CBI, said new
products could be focused on older people - alongside advances in banking for
millennials.
Mark Neale, chief executive of the Financial Services
Compensation Scheme - the safety net for consumers if firms go bust, called for
kitemarked pension products to protect confused savers.
Both were speaking at the UK Finance Retail Banking
Conference in London.
Market update
Getty ImagesCopyright: Getty Images
Just before Philip Hammond delivers his Spring Statement, a quick market update.
The FTSE 100 is little changed on the day, up 8 points at 7,159.50.
The pound is up 0.6% against the dollar at $1.3159.
'Many options still on Brexit menu'
Getty ImagesCopyright: Getty Images
UBS economist Dean Turner says its base case scenario for Brexit is that "if the UK leaves the EU, it will come with a deal in place".
However he says that what the deal looks like and the timing of it are still "highly uncertain".
He expects MPs to block a no-deal exit in tonight's vote, forcing the government to delay Brexit.
Mr Turner currently expects an extension to be "relatively short" with Theresa May trying to tweak the withdrawal agreement further.
If this doesn't work, "the
inescapable conclusion is that the government will have to return
to voters, most likely via a general election," he says.
For investors, the current uncertainty means UBS advises against taking bets on the pound's direction.
Financial services ‘create anxiety’
Kevin Peachey
Personal finance reporter
Getty ImagesCopyright: Getty Images
Nearly half (47%) of consumers say that dealing with
financial services creates anxiety.
The finding was used to challenge bankers to do more to
personalise services for their customers.
Sir Hector Sants, who chairs the government-backed Single
Financial Guidance Body - formerly the Money Advice Service - told the UK
Finance Retail Banking Conference that every customer had the potential to be
vulnerable regarding money.
He said that financial institutions should change their
culture to put individuals and their wellbeing first.
Carmaker Ford, which employs 13,000 in the UK, is urging the government to avoid a no-deal Brexit so that the tariff regime unveiled earlier does not need to be implemented.
“It is very disappointing that the UK government should
unveil its planned automotive tariffs in the event of a no-deal Brexit without
any prior consultation with the industry," Ford said.
"These tariffs would deal a
devastating blow to much of the complex and integrated automotive industry, and
would damage the competitiveness of Ford’s engine manufacturing in the UK.
"This
is why it is imperative that a no-deal, hard Brexit is ruled out as soon as
possible to avoid the imposition of such a draconian tariff regime on a large
part of the UK auto industry.
"We sincerely hope that political
differences will now be set aside, and that politicians
will work together to avoid the country leaving the EU without a deal
on March 29. Any deal must guarantee the principles of tariff free
and frictionless trade.”
Pound up
BBCCopyright: BBC
The pound is attempting to stage a recovery after yesterday's gyrations when MPs failed to back Theresa May's Brexit deal.
"After a strong rally on Monday, built on the hope of a significant
breakthrough on the backstop, sterling handed back nearly all the gains
yesterday as it was revealed that little had ultimately changed and the latest
deal was resoundingly beaten in parliament," David Cheetham, chief market analyst at Xtb.
"As the dust settles [the pound/sterling exchange rate] trades towards the middle of its recent $1.30-1.33 range and while it has been
a dramatic few days, there’s not really been any significant tangible changes
as far as the markets are concerned."
'Thousands of jobs at risk,' warn unions
PACopyright: PA
Frances O'Grady has led the TUC since 2013Image caption: Frances O'Grady has led the TUC since 2013
Manufacturing unions have warned that the plan to make most imports tariff-free in the event of a no-deal Brexit would put "thousands of jobs at risk".
The TUC, Unite, GMB and
Community say it would allow cheap imports to flood the
market, putting thousands of jobs at risk and threatening key industries, such
as steel, ceramics, tyres and glass.
“Ending tariffs in the
event of a no-deal Brexit would be a hammer blow to our manufacturing
industries and the communities they support.
“The government is flying
blind, having introduced these plans without any consultation with the workers
they will affect. We need a full and proper impact assessment," says TUC general secretary Frances O'Grady.
'Take no-deal off the table,' urge car firms
Getty ImagesCopyright: Getty Images
Nissan's is to stop production of Infiniti models in SunderlandImage caption: Nissan's is to stop production of Infiniti models in Sunderland
Here's Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, after the tariffs announcement.
He says it “does not resolve the devastating effect a no-deal Brexit
would have on the automotive industry".
"No policy on tariffs can come close to
compensating for the disruption, cost and job losses that would result from no-deal. It’s staggering that we are in this position with only days until we are
due to leave.
"Every day no-deal remains a possibility is another day
companies pay the price in expensive contingency measure," he says.
Mr Hawes is urging the possibility of a no-deal Brexit to be taken off the table "immediately and permanently.”
Live Reporting
Bill Wilson
All times stated are UK
Deal dividend?
Philip Hammond is confident that if the UK does leave the EU with a deal there will be an economic boost due to a pick-up in business confidence and investment.
He says his role will be "to decide how much of this “Deal Dividend” we can prudently release… …and how we would share it between increased spending on public services, capital investment in Britain’s future prosperity and keeping taxes low… …while continuing to keep debt falling."
Full Spending review pledged
The chancellor says that assuming a Brexit deal is agreed and uncertainty lifted he will launch a "full three-year spending review" before the summer break.
Philip Hammond says this will set departmental budgets beyond the NHS.
He says the review will "reflect the public’s priorities between areas like social care, local government, schools, police, defence and the environment."
Borrowing figures improve
Philip Hammond says however he has good news on borrowing figures.
This year it will be 1.1% of GDP, £3bn lower than forecast at the Autumn Budget.
"Looking forward, borrowing will fall from £29.3bn in 2019-20, then £21.2bn, £17.6bn, £14.4bn and finally £13.5bn in 2023-24 – its lowest level in 22 years," he says.
The chancellor says the government remains on track to meet its fiscal target early.
Growth forecasts cut
Chancellor Philip Hammond has cut growth for this year, now expecting 1.2% compared to October's forecast of 1.6%.
Next year's forecast is unchanged at 1.4%, but then for the final three years he expects 1.6% each year.
Lifting uncertainty 'most urgent task'
Chancellor Philip Hammond is now on his feet and speaking.
He acknowledges the "most urgent task is to lift uncertainty".
However, he adds that the "economy itself is remarkably robust."
US durable goods
US durable goods orders rose 0.4% in January, fuelled by a rise in aircraft orders.
Manufacturers say tariff plan will hit hard
Manufacturing lobby group Make UK, formerly the EEF, says the government's tariff plan in the event of a no-deal Brexit will "still be decimating for our sector as a whole".
"While there is some protection for areas such as agricultural products and car imports, other areas of manufacturing will be hit hard.
“The decision to avoid controls at the Northern Ireland land border and applying that to all trading partners across the globe will be very damaging for the manufacturing sector as inferior products will flood the market," says chief executive Stephen Phipson.
He's ready
IoD on tariffs
Allie Renison, head of Europe and trade at the Institute of Directors, has issued a statement after the tariffs announcement.
She says that while cutting tariffs is "a necessary and welcome part" of trade policies it needs to be done in a "measured, open and consultative way".
"All in all, the belated, cack-handed way in which the Government has handled its no-deal planning is one of the main reasons why many businesses will not be prepared for this outcome by 29 March.
"Politicians should be under no illusion - this package of mitigating measures do not help make the case for no-deal. They are rather a reminder of the spike in invidious choices we would face as a country amidst a backdrop of chaos.”
Cost of tariffs
Retail correspondent at the Financial Times tweets
Cost of tariffs
What is the cost of government's plan for tariffs?
Duncan Brewer, partner in the retail and consumer team at Oliver Wyman, has run the numbers:
“Under a no-deal Brexit scenario, the additional cost to consumers will be £961 per household per year, due to a combination of tariffs, non-tariff barriers and labour cost increases
“The impact on consumers with the Government's new tariffs is slightly lower, at £810 per household per year. While many imports are now zero-rated, the major cost that importers will continue to incur are non-tariff barriers, paperwork, delays at the border and other administrative costs.
“Grocers will be one of the hardest hit with their costs rising by nearly 6% - these costs will be passed onto consumers in the form of higher costs for everyday food and drink products."
‘Don’t forget older people’
Kevin Peachey
Personal finance reporter
The financial sector should see the opportunities available from an ageing population, bankers have been told.
Rain Newton-Smith, chief economist at the CBI, said new products could be focused on older people - alongside advances in banking for millennials.
Mark Neale, chief executive of the Financial Services Compensation Scheme - the safety net for consumers if firms go bust, called for kitemarked pension products to protect confused savers.
Both were speaking at the UK Finance Retail Banking Conference in London.
Market update
Just before Philip Hammond delivers his Spring Statement, a quick market update.
The FTSE 100 is little changed on the day, up 8 points at 7,159.50.
The pound is up 0.6% against the dollar at $1.3159.
'Many options still on Brexit menu'
UBS economist Dean Turner says its base case scenario for Brexit is that "if the UK leaves the EU, it will come with a deal in place".
However he says that what the deal looks like and the timing of it are still "highly uncertain".
He expects MPs to block a no-deal exit in tonight's vote, forcing the government to delay Brexit.
Mr Turner currently expects an extension to be "relatively short" with Theresa May trying to tweak the withdrawal agreement further.
If this doesn't work, "the inescapable conclusion is that the government will have to return to voters, most likely via a general election," he says.
For investors, the current uncertainty means UBS advises against taking bets on the pound's direction.
Financial services ‘create anxiety’
Kevin Peachey
Personal finance reporter
Nearly half (47%) of consumers say that dealing with financial services creates anxiety.
The finding was used to challenge bankers to do more to personalise services for their customers.
Sir Hector Sants, who chairs the government-backed Single Financial Guidance Body - formerly the Money Advice Service - told the UK Finance Retail Banking Conference that every customer had the potential to be vulnerable regarding money.
He said that financial institutions should change their culture to put individuals and their wellbeing first.
Way out of the backstop?
BBC's assistant political editor tweets
Ford: Tariffs 'a devasting blow'
Carmaker Ford, which employs 13,000 in the UK, is urging the government to avoid a no-deal Brexit so that the tariff regime unveiled earlier does not need to be implemented.
“It is very disappointing that the UK government should unveil its planned automotive tariffs in the event of a no-deal Brexit without any prior consultation with the industry," Ford said.
"These tariffs would deal a devastating blow to much of the complex and integrated automotive industry, and would damage the competitiveness of Ford’s engine manufacturing in the UK.
"This is why it is imperative that a no-deal, hard Brexit is ruled out as soon as possible to avoid the imposition of such a draconian tariff regime on a large part of the UK auto industry.
"We sincerely hope that political differences will now be set aside, and that politicians will work together to avoid the country leaving the EU without a deal on March 29. Any deal must guarantee the principles of tariff free and frictionless trade.”
Pound up
The pound is attempting to stage a recovery after yesterday's gyrations when MPs failed to back Theresa May's Brexit deal.
"After a strong rally on Monday, built on the hope of a significant breakthrough on the backstop, sterling handed back nearly all the gains yesterday as it was revealed that little had ultimately changed and the latest deal was resoundingly beaten in parliament," David Cheetham, chief market analyst at Xtb.
"As the dust settles [the pound/sterling exchange rate] trades towards the middle of its recent $1.30-1.33 range and while it has been a dramatic few days, there’s not really been any significant tangible changes as far as the markets are concerned."
'Thousands of jobs at risk,' warn unions
Manufacturing unions have warned that the plan to make most imports tariff-free in the event of a no-deal Brexit would put "thousands of jobs at risk".
The TUC, Unite, GMB and Community say it would allow cheap imports to flood the market, putting thousands of jobs at risk and threatening key industries, such as steel, ceramics, tyres and glass.
“Ending tariffs in the event of a no-deal Brexit would be a hammer blow to our manufacturing industries and the communities they support.
“The government is flying blind, having introduced these plans without any consultation with the workers they will affect. We need a full and proper impact assessment," says TUC general secretary Frances O'Grady.
'Take no-deal off the table,' urge car firms
Here's Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, after the tariffs announcement.
He says it “does not resolve the devastating effect a no-deal Brexit would have on the automotive industry".
"No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from no-deal. It’s staggering that we are in this position with only days until we are due to leave.
"Every day no-deal remains a possibility is another day companies pay the price in expensive contingency measure," he says.
Mr Hawes is urging the possibility of a no-deal Brexit to be taken off the table "immediately and permanently.”