The Chancellor has vowed to “strike out in a new direction” and use “fiscal buffers” to boost the economy in the event of a hard Brexit, as he spoke on the eve of his 2018 Budget.
He said: “If the economy as the result of a no deal Brexit, or indeed because of something else that we haven’t anticipated, needs support over the coming months and years, I have the capacity to provide that support.”
But Philip Hammond insisted that was not the outcome he expected and he remained confident there would be an agreement with Brussels on the eve of his speech, which is expected to be his final Budget before Britain leaves the EU.
He said: “Once we get a good deal from the European Union and the smooth exit from the EU, we will be able to show the British people that the fruits of their hard work are now at last in sight.
Mr Hammond also faces a backlash over fresh plans to hike national insurance for thousands of self-employed workers.
He is set to target people who set up private firms, which allows them to avoid paying national insurance contributions, according to sources.
The Treasury predicts there could be up to £1.2billion a year missing in tax payments by 2023 as a result of people paying tax as if they are self-employed, according to The Sun.
After weeks of turmoil over Brexit, Tory MPs will be looking to the Chancellor to raise party morale with his annual financial statement.
Mr Hammond is expected to respond to Prime Minister Theresa May’s declaration in her Conservative Party conference speech that the era of austerity was finally ending with a cautious loosening of the public spending purse strings.
The Chancellor will go to the Commons buoyed by an estimated £13 billion windfall due to better-than-expected Government borrowing figures.
