Philip Hammond’s £95billion Budget splurge spells an end to austerity

PHILIP Hammond unveiled a giant £95billion public spending splurge in his Budget yesterday as he declared an end to austerity’s decade of cuts.

Three quarters of the Chancellor’s vast increase in cash to ministries will go to the NHS, to pay for its £20bn a year boost announced by Theresa May last summer.

But Treasury officials insisted even after health’s new money pile, there would still be inflation-linked rises for every department in next year’s Whitehall-wide spending review.

Dubbing his Budget “a defining moment in this long hard journey”, Mr Hammond told MPs: “The era of austerity is finally coming to an end”.

The massive splurge sparked critics’ fears that he would lose control of the deficit again.

But Mr Hammond insisted that debt will continue to fall as a percentage of GDP in each of the next five years.

And in a thinly veiled plea to Tory MPs to back any Brexit deal that the PM strikes, Mr Hammond also pledged to spent even more if Britain’s EU exit is smooth.

The Chancellor conjured up the vision of a “double deal dividend” as businesses start spending again at the same time as he releases £15billion stashed away as a Brexit war chest if it goes bad.

The MoD was yesterday’s biggest winner, landing a total of £1.8billion more from the Chancellor this year and next.

Defence Secretary Gavin Williamson was delighted with the win, as it meant he no longer has to make any capability cuts over the next 18 months.

But a long-term solution to his ministry’s £20billion blackhole over the next decade was delayed until the Whitehall-wide spending review, expected next summer.

The extra defence cash will go on cyber, anti-submarine warfare capacity, and the next generation Dreadnought subs to carry the nation’s Trident nuclear deterrent.

Mr Hammond said he was acting because the last year had thrown up “stark reminders of the scale, scope and complexity of the threats we face”.

Local authorities struggling to fund OAP care will also be able to dip into a new £640m nationwide pot unveiled by the Chancellor yesterday.

And some of the NHS’s huge £20billion of extra spending a year was also fleshed out, with £2bn to be dedicated to mental health services – including a unit for it in every school and A&E centre.

Mr Hammond pleased Brexiteers by allocating another £500million for no-deal Brexit preparations.

He also confirmed he would carry out another Budget in the Spring if there was no deal and a disorderly Brexit instead.

Mr Hammond also unveiled £160million more for counter-terror policing next year. Pleasing Home Secretary Sajid Javid.

Angry Tory MPs who had threatened numerous rebellions over funding shortfalls were happy last night.

Campaigning former Army officer-turned Tory MP Johnny Mercer dubbed the defence injection “good news” as it meant an end to “the madness of the proposed in year cuts”.

But right of centre economist also expressed concern that Mr Hammond was throwing caution out of the window too early.

The Institute of Economic Affairs’s Director General Mark Littlewood said: “In an attempt to signal the ‘end of austerity’, it appears this government has given up on deficit elimination.

“It will be more than a quarter of a century since the government last balanced the books”.

The austerity Chancellor George Osborne’s former chief of staff Rupert Harrison added: “The government was groping its way towards a sensible strategy, but the ‘end of austerity’ language raises expectations that can’t be met”.