Autumn Statement: UK economy must be 'match fit' for Brexit

Chancellor Philip Hammond has said he aims to make the economy "match fit for the opportunities and challenges ahead" as the UK approaches Brexit.

Ahead of his first Autumn Statement, he said the economy was facing "a larger degree of uncertainty than usual" and he intended to make it "water-tight".

The Treasury has confirmed an extra £1.3bn will be allocated to cut traffic congestion and upgrade local routes.

Labour has urged Mr Hammond to reverse cuts to in-work benefits.

Critics say cuts to Universal Credit brought in by Mr Hammond's predecessor, George Osborne, will leave some working families worse off by up to £1,300 a year by 2020.

The Conservative former work and pensions secretary Iain Duncan Smith is among those calling for them to be reversed.

Some in Westminster expect Mr Hammond to use his Autumn Statement on Wednesday to announce measures aimed at the key group of voters identified by Downing Street as the Just About Managing or JAMs.

Those could reportedly include a freeze in fuel duty and measures to encourage saving.

Mr Hammond told BBC One's Andrew Marr Show he wanted to support people who "work hard and by and large do not feel that they are sharing in the prosperity that economic growth is bringing to the country".

But the chancellor said many economic forecasts were pointing to a "sharp challenge" and he had to make sure that "everything we do is compatible with building resilience in our economy as we go into a period where there will be some uncertainty".

He said his Autumn Statement - one of two big economic statements of the year - must maintain "credibility" given the country still has a significant deficit.

"I want to make sure that the economy is watertight, that we have enough headroom to deal with any unexpected challenges over the next couple of years and most importantly, that we're ready to seize the opportunities of leaving the European Union."

His comments come amid reports that the UK is facing a projected £100bn "black hole" in its finances due to the UK vote to leave the European Union.

Asked about continued calls for the government to say more about its aims in Brexit negotiations, Mr Hammond pointed to the "commendable discipline" from other European leaders when it came to not discussing their opening positions and said Prime Minister Theresa May must be given the same "flexibility".

He added that he was "surprised by the degree to which the cabinet is coming together around a view of the opportunities and the challenges ahead".

New expressway

Earlier it was revealed that around a billion pounds will be spent on improving England's roads, as part of a package to boost long-term economic growth.

The remainder of a £1.3bn Treasury pot earmarked for infrastructure investment will be split between Scotland, Wales and Northern Ireland, although the devolved administrations can choose to spend that money as they see fit.

The roads investment will include:

• £220m to tackle congestion "pinch-points" on Highways England roads
• £27m of funding for an expressway connecting Oxford, Milton Keynes and Cambridge - a project backed by the National Infrastructure Commission

The Treasury said it wanted to prioritise projects which would make an immediate impact. It said the investment would "likely to make a real difference by making journeys quicker and easier for millions of commuters".

But Martin Tett, transport spokesman for the Local Government Association, told BBC Radio 5live: "We estimate you have to spend £12bn on the roads just to repair the existing potholes that we all face virtually every day of the week when we drive around.

"And put it in context of £55bn being spent on HS2, so it's a relatively small amount of money in the context of transportation."

'Giveaways and gimmicks'

Labour's shadow chancellor John McDonnell told the BBC that the government was "going back to giveaways and gimmicks again".

"A lot of the infrastructure the government is supposed to be announcing are press releases we've had already," he said.

Mr McDonnell said Labour would invest an extra £500bn in the economy over 10 years to boost economic growth by 1-2%, half of which would be leveraged from the private sector through a national investment bank.

He vowed that a future Labour government would halt tax cuts to the rich and big corporations, and would reverse cuts to Universal Credit and Employment Support Allowance - and pressed Mr Hammond to to do the same. He told the chancellor: "This is money coming out of the pockets of those doing everything asked of them."

But Mr Hammond told him: "What I have not heard from you is where you would get the money from to do all these easy options."