The British government on Monday presented a budget marking "the end of the era of austerity", even if the Chancellor of the Exchequer promises that "the discipline will be maintained." However, the fiscal future will be closely linked to the results of the negotiations between Brussels and London on the exit of the United Kingdom from the European Union.
British Finance Minister Philip Hammond has slightly opened the tap in a budget yet marked by the seal of discipline to five months of a Brexit with uncertain contours.
Coming out of 11 Downing Street in the middle of the afternoon under the already low sun and in a pungent cold, the Chancellor of the Exchequer proudly showed the traditional red budget briefcase to an impatient press. He then went to Westminster, where he presented the country's accounts to the crowded hemicycle of the House of Commons.
The end of austerity?
"The era of austerity is coming to an end but the discipline will be maintained," Hammond promised, under the watchful eye of MPs but also from his own government boss, Theresa May, who has recently promised to his conservative troops more generous social spending.
Eight years after the Conservatives launched a policy of austerity when they returned to power, "Phil le Comptable" has indeed conceded some largesse and frozen most taxes.
In particular, he promised to allocate 20.5 billion pounds a year by 2024 to finance the NHS public health service, 900 million a year tax cuts for small businesses facing the explosion of sales on internet or another 420 million a year to pay roadmenders to repair the potholes of small roads.
The long-haired silver-haired sexagenarian also highlighted the "resistance" of growth, a little better than expected despite a significant slowdown over the past two years and the many unknowns of Brexit, harmful to business investment.
For the year 2019, which will see the United Kingdom cut bridges with the EU - March 29 - London now plans a growth of 1.6%. This is better than the 1.3% expected so far, even though the country has, at the same time, reduced by 0.2 point its forecast for 2018, to 1.3%. GDP could then rise from 1.4% to 1.5% per year from 2020 to 2022.
Not catastrophic, this growth would allow the country to continue to reduce its public deficit, which decreases year by year and could be limited to 1.3% from the current fiscal year.
A budgetary future linked to Brexit
But Philipp Hammond also made it clear that the end of the tunnel for British taxpayers was highly dependent on a Brexit negotiated between London and Brussels. In this case only, the country would benefit from the "dividend of the agreement" , ie taxes that could be reduced through more vigorous growth.
Negotiations between the British and the Europeans on the terms of departure of the United Kingdom have been inconvenient, including a disagreement over the possible creation of a border with Ireland.
In case the talks fail, the impact on British growth could be major next year due to the brutal complications for trade that passes through ports, airports and other crossings.
A budget voted on Thursday
Philipp Hammond has also raised £ 500 million in Brexit funds to try to reduce the economic impact of the revolution expected at the end of March. He also warned on Sunday that a Brexit without agreement would require a rectifying budget.
Its budget also includes some symbolic measures, such as the tax freeze on beer or whiskey but, above all, the creation of a new tax on the giants of the Internet from 2020.
The accounts submitted by Philipp Hammond will nonetheless face several tests in Parliament: a vote on Thursday, and the adoption of a finance law in the coming weeks to set it to music. These parliamentary debates will provide an opportunity to be heard not only by the Labor opposition but also by the critical voices within the tenuous conservative majority.