Philip Hammond faces calls to ease austerity as he delivers first Spring Statement

Philip Hammond is set to face demands to end austerity when he reveals government borrowing is at pre-financial crisis levels in his first Spring Statement today. 

Labour and some of the Chancellor's own backbenchers are planning to call on him to increase spending in a bid to boost the economic growth.

But Hammond has insisted that he will not be using the Spring Statement - which is only expected to last around 20 minutes - to make any new tax or spending announcements.

Instead, Office for Budget Responsibility forecasts will be the centre piece of the trimmed-down address in which he will set out numbers on growth, borrowing and debt.

The figures will show that borrowing, estimated for 2017/18 at £49.9bn, will be closer to £43bn. And that the UK is now running a surplus of £3.8bn in its day-to-day budget and economists expect Hammond to say borrowing will be around £7bn lower in 2017/18 than previously forecast.

Ahead of the fiscal set piece, Conservative MP Bim Afolmami urged the Chancellor to make some extra cash available for “necessary reforms”.

“We all know that certain areas of public services do need extra money to accompany necessary reforms and structural improvements – infrastructure spending, the NHS, defence and education in particular,” he said.

Shadow chancellor John McDonald has also called on the Chancellor to take the opportunity to end austerity.

He said: “Today the Chancellor has a choice. He can choose to act and end the misery faced by many, or he can do nothing and continue to favour a privilege a few.

“Our public services are at breaking point and many of our local councils are near bankruptcy. He needs to listen to the calls from across the political spectrum, including the Tory council leader in his own constituency - to end the financial crisis in our public sector.

“Philip Hammond must use today to act and end austerity. Our country cannot afford for him to continue to ignore the problems facing working households in our country. If his statement is one of boastful self-praise and not a recognition of the devastation faced by many in our country then he will have failed.

“If the Chancellor refuses to act, then the next Labour government will end austerity and build a high wage, high skill economy for the many, not the few”.

But speaking at the weekend, the Chancellor threw cold water on the possibility of big spending increases.

“There is light at the end of the tunnel because what we are about to see is debt starting to fall after it has been growing for 17 continuous years," he said. 

“That is a very important moment for us but we are still in the tunnel at the moment.”

It is expected that the Chancellor will use the Spring Statement to announce new consultations on VAT thresholds for businesses, single-use plastic waste and a possible shift to tax major firms, such as Google, Facebook and Amazon, on revenue rather than profits.