Britain to submit ‘Brexit bill’ proposal before December EU meeting

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Britain will submit its proposals on how to settle its financial obligations to the European Union before an EU Council meeting next month, finance minister Philip Hammond said on Sunday.

British Prime Minister Theresa May was told on Friday that there was more work to be done to unlock Brexit talks, as the European Union repeated an early December deadline for her to move on the divorce bill.

“We will make our proposals to the European Union in time for the council,” Hammond told the BBC.

Last week, May met fellow leaders on the sidelines of an EU summit in Gothenburg, Sweden, to try to break the deadlock over how much Britain will pay on leaving the bloc in 16 months.

She signaled again that she would increase an initial offer that is estimated at some $24 billion (20 billion euros), about a third of what Brussels wants.

Promises more homes

Hammond, under pressure to help weakened Prime Minister Theresa May in this week’s budget, promised to speed up house building
and said he had some room to help voters despite his squeeze on public finances.

Aware that to some her government looks overwhelmed by the task of delivering Brexit, May needs her finance minister to show voters that she has a handle on Britain’s domestic problems like a housing shortage, low productivity and stagnant pay.

Hammond told the Sunday Times he wanted 300,000 homes built each year, a big step up from recent levels closer to 200,000.

May - who suffered a rebuke from voters in an election in June when she lost her parliamentary majority - has said she wants to help younger households, many of whom fear they will not achieve the living standards of their parents’ generation.

Hammond told the newspaper he would do “whatever it takes,” including new powers and planning rules, to get companies to build more homes and pledged that “the next generation will have the same opportunities as their parents to own a home.”

He also said the world’s fifth-biggest economy was at a turning point after a hard year in what seemed to be an attempt to challenge his critics in the Conservative Party who say he is too downbeat about Britain’s prospects as it prepares to leave the European Union.

Some Conservatives have even called on May to sack Hammond because he is too cautious about Britain’s Brexit strategy.

Hammond said Britain was now “on the brink of making some serious progress” on Brexit and inflation looked likely to fall after rising sharply because of the fall in the value of the pound after the June 2016 Brexit vote.

“And after many years of struggling to get the (budget) deficit down and seeing our debt still rising I think we are at last about to turn that corner and see debt begin to fall,” Hammond said.

Debt is expected to reach nearly 90 percent of GDP next year, more than double its levels before the global financial crisis, before falling back, according to Britain’s official budget forecasters.

New forecasts are due to be delivered on Wednesday, alongside Hammond’s budget.

Aiming for driverless cars by 2021

Hammond is also to announce £75 million ($99 million, 84 million euros) funding for Artificial Intelligence and plans to put driverless cars on UK roads by 2021, in his budget speech on Wednesday.

Hammond will announce regulation changes to allow Britain’s driverless car industry, which the government estimates will be worth £28 billion by 2035, to get cars on the road within as little as three years, according to extracts of the budget released by his office on Sunday.

“Some would say that is a bold move, but I believe we have to embrace these technologies if we want to see Britain leading the next industrial revolution,” he told BBC’s Andrew Marr Show.

The minister, who is under pressure to deliver an eye-catching budget following Brexit spats with cabinet colleagues, will also announce a £400 million fund for companies hoping to roll out electric-car charge points across the country.

People who want to buy a battery-electric vehicle will also be able to access funding as Britain attempts to move towards zero-emission transport.

With a focus on tech industries, the government is also planning to spend £75 million supporting companies developing AI and £160 million in developing 5G technology, which it believes will be necessary for the mass rollout of driverless cars.

‘Kindness of strangers’

Britain’s high debt levels have alarmed some investors and Bank of England Governor Mark Carney says the country remains dependent on “the kindness of strangers” to finance itself.

Hammond has previously set himself a target of bringing the ratio down by the end of the decade.

That target may be made easier by a move to shift debt held by housing associations off the government’s books which was announced last week.

As well as his push to speed up house building, the Sunday Times said Hammond suggested he would boost spending for Britain’s health service and further ease a squeeze on the pay of public sector workers in his budget plan.

But Hammond said he had to “signal a continued commitment to fiscal responsibility,” suggesting he would stick to his targets for cutting the budget deficit.

“We are heavily constrained fiscally. We don’t have huge amounts of room for manoeuvre. But we do have some room,” he told the newspaper.

In an apparent joke at the tough balancing act he faces, Hammond was photographed by the Sunday Times looking puzzled and scratching his head as he pored over papers coming from his famous red budget briefcase.

Many economists say Hammond will struggle to meet his target of eliminating Britain’s budget deficit by the mid-2020s because of the country’s stubborn productivity problem.

Britain’s official budget forecasters have said they expect to cut their productivity growth forecasts, suggesting slower overall economic growth ahead and less tax revenue for Hammond.