Chancellor distances himself from Osborne on economy

(Photo by Dan Kitwood/Getty Images)

(Photo by Dan Kitwood/Getty Images)

Chancellor Philip Hammond has sought to distance himself from his predecessor George Osborne’s policies to reduce the deficit, instead focusing on home ownership and economic growth.

Speaking at the Conservative party conference in Birmingham today, Hammond said the decisions Osborne made in the aftermath of the financial crisis “pulled us back from the precipice” and allowed the UK to enter into Brexit negotiations “from a position of fundamental economic strength”.

But he said reducing the deficit would be done in a “pragmatic way that reflects the new circumstances we face.” He did not give a timetable for deficit reduction.

Hammond said: “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.

“At the Autumn Statement in November I will set out our plan to deliver long-term fiscal sustainability while responding to the consequences of short-term uncertainty and recognising the need for investment to build an economy that works for everyone.”

Hammond cited unaffordable housing as one of the key challenges the Government was keen to tackle. He pointed to a package of measures announced earlier today to boost housing, including £2bn to accelerate building on public land and £3bn in development loans for housebuilding.

His speech follows Prime Minister Theresa May announcing article 50, which kick-starts the formal process for leaving the European Union, will be triggered by the end of March.

Sterling fell to its lowest level since August on the news, and as at 1pm was trading at 1.29 against the dollar.

However the FTSE has climbed and is up at 6,990 as at the same time.