Britain's Chancellor of the Exchequer Philip Hammond poses for the media with his traditional red dispatch box outside his official residence number 11 Downing Street in London, as he departs to deliver his annual budget speech to Parliament, Wednesday, March 8, 2017. The British government's annual budget is one of the most high-profile, choreographed events in the country's political calendar and for much of the past century has taken place in the spring, but Wednesday's budget is meant to be the last to be held in the spring, with the event being pushed into the autumn. (AP Photo/Matt Dunham)
The Associated Press
LONDON (AP) - Britain's Treasury chief was upbeat about the state of the economy as he unveiled his budget Wednesday, but said he plans to keep a lid on spending amid uncertainty over the country's exit from the European Union.
Philip Hammond outlined his plan for the 2017-18 fiscal year laying the foundations for what he called a "stronger, fairer, better Britain" outside the EU. Prime Minister Theresa May and her predecessor have presided over seven years of austerity as they struggled to close a budget deficit that ballooned during the financial crisis.
"The only responsible course of action ... is to continue with our plan undeterred by any short-term fluctuations," Hammond said. "We will not saddle our children with ever-increasing debts."
Hammond nonetheless offered a surprise influx of 2 billion pounds ($2.4 billion) for social care over three years, responding to a crisis in funding care for the country's aging population.
The caution over spending comes despite an improvement in government finances. While the latest figures from the independent Office for Budget Responsibility show government borrowing during the 2016-17 year will probably be about 16.6 billion pounds less than previously forecast, Hammond noted Britain is still 1.7 trillion pounds in debt.
The Office for Budget Responsibility also upgraded its forecast for economic growth this year, saying the economy will likely expand 2 percent, compared with the previous estimate of 1.4 percent. But it downgraded the outlook for 2018 to 1.6 percent from 1.7 percent and in 2019, to 1.7 percent from 2.1 percent.
One of the most closely watched questions ahead of the budget was whether the government would help small firms facing large increases in "business rates," the property taxes paid by companies. More than a third of small firms expect rates to rise, and 20 percent are preparing for increases of more than 40 percent, a survey by the Federation of Small Businesses showed.
London is likely to be particularly hard hit because property values have soared since the financial crisis.
Hammond said he would study the matter, and offered relief to the majority of local pubs - in recognition of their special place in many communities. He also provided 300 million pounds to provide discretionary relief for difficult cases in local areas.
Britain's Chancellor of the Exchequer Philip Hammond poses for the media with his traditional red dispatch box outside his official residence number 11 Downing Street in London, as he departs to deliver his annual budget speech to Parliament, Wednesday, March 8, 2017. (AP Photo/Matt Dunham)
The Associated Press
A statue of Winston Churchill in front of the Houses of Parliament in London, Wednesday, March 8, 2017. Britain's Treasury chief Philip Hammond, is set to deliver an upbeat message as he unveils a cautious budget meant to help the country bolster resources as it faces the uncertainty of leaving the European Union. (AP Photo/Matt Dunham)
The Associated Press
Britain's Chancellor of the Exchequer, Philip Hammond, poses for photographs during final preparations for his official 2017 budget announcement, in his office at the Treasury in London Tuesday March 7, 2017. Hammond will deliver his major spring Budget Wednesday March 8, in a speech to the House of Commons which will outline the government's financial tax and spend aims for the coming months. (Carl Court/Pool via AP)
The Associated Press
Britain's Chancellor of the Exchequer, Philip Hammond, poses for photographs during final preparations for his official 2017 budget announcement, in his office at the Treasury in London Tuesday March 7, 2017. Hammond will deliver his major spring Budget Wednesday March 8, in a speech to the House of Commons which will outline the government's financial tax and spend aims for the coming months. (Carl Court/Pool via AP)
The Associated Press
Britain's Chancellor of the Exchequer, Philip Hammond, poses for photographs during final preparations for his official 2017 budget announcement, in his office at the Treasury in London Tuesday March 7, 2017. Hammond will deliver his major spring Budget Wednesday March 8, in a speech to the House of Commons which will outline the government's financial tax and spend aims for the coming months. (Carl Court/Pool via AP)
The Associated Press
Britain's Chancellor of the Exchequer Philip Hammond, center, and members of the Treasury team, pose for the media with the traditional red dispatch box outside his official residence number 11 Downing Street in London, as he departs to deliver his annual budget speech to Parliament, Wednesday, March 8, 2017. The British government's annual budget is one of the most high-profile, choreographed events in the country's political calendar and for much of the past century has taken place in the spring, but Wednesday's budget is meant to be the last to be held in the spring, with the event being pushed into the autumn. (Victoria Jones/PA via AP)
The Associated Press