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Driverless car tests at heart of 'upbeat' Budget

Billions of pounds for housing and high-tech industry are expected to be at the centre of Chancellor Philip Hammond’s “positive and upbeat” Budget this Wednesday.

Treasury sources say Philip Hammond will try to help start-up businesses which specialise in driverless cars and artificial intelligence develop into success stories of the future.

He will remove regulatory potholes which prevent developers from road-testing driverless technologies without humans present, pump £400m into electric car charge points and invest £160m in 5G mobile networks.

::Long read: One number towering over the Budget

The Chancellor is also reportedly ready to find £5bn for housing schemes and underwrite loans to small home builders.

This is part of a commitment to deliver 300,000 new homes every year, adding an extra 50,000 to the current target which the Government missed last year.

But, the Sunday Times suggests Mr Hammond is not expected to take up the advice from his Cabinet colleague Communities Secretary Sajid Javid to borrow £50bn to turbocharge home building.

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Video:In full: Ian looks ahead to the budget and new borrowing rules to boost house building

Speaking to Sky News on Sunday, the Chancellor outlined his aim to “tackle the housing challenges we face in this country” by ensuring approved planning permissions actually get built and making certain “every inch of available land is properly used and developed” in towns and cities.

Mr Hammond is under considerable pressure from a number of different quarters: to lift the public sector wage cap, plug a funding crisis in the NHS, invest in schools and iron out issues with benefit changes.

But the Chancellor denied he is facing an impossible job by balancing the demand for more cash for public services, while also trying to balance the country’s finances.

He said: “It’s not an impossible task but that is the job of a Chancellor.

“To take the many competing demands for public money, the need for fiscal responsibility – because that’s what underpins our long-term prosperity – and, of course, making judgements when we’re in quite a fluid situation with our negotiations with the EU ongoing.”

The Sunday Telegraph reported Mr Hammond will also offer a pay rise to nurses in his Budget as part of a “positive signal” to NHS staff.

A spokesperson for the Royal College of Nursing said: “We will wait to see details on Wednesday but nursing staff need a pay rise above inflation and the Government must give the NHS the funds to cover it.”

John McDonnell
Video:McDonnell: ‘End austerity, start investment’

Stan Boland, who runs the driverless tech firm FiveAI, said the Chancellor’s plans to boost the industry are a welcome windfall.

“The future is really about computer science and artificial intelligence applied to new problem spaces and the first one we are going to see is transportation,” he told Sky News.

“So more government help to support companies build successful global businesses in driverless cars would be amazing.”

:: Hammond to back help for ‘scale-up’ champions

Labour leader Jeremy Corbyn told broadcasters what he would prioritise: “I’d like to see a pause in the roll out of Universal Credit,” he said.

“I would like to see sufficient money going into our NHS to deal with the existing crisis and proper funding of our schools as a priority, but also an agreement that we need to invest far more in the housing needs of the people of this country and therefore borrow to invest in housing.”

The political pressure is also immense after the main revenue raisers in every budget since 2015 have had to be modified or abandoned.

With the loss of the Government’s majority, Mr Hammond will have to avoid any move which might be unpopular among his Conservative colleagues like changes to national insurance which had to be abandoned after the last budget in March.

With low productivity and concerns over Brexit he will be unwilling to borrow too heavily, or significantly increase taxes.

But one backbencher Alec Shelbrooke, the MP for Elmet and Rothwell, has an idea to rake in some extra money: ending the freeze on fuel duty.

“Are you raising income tax? I think that hits people quite hard, it really does if you are putting a penny on the starting rate, I don’t think that’s the good way forward,” he told Sky News.

“But in terms of petrol and diesel, (duty) has been frozen for a very long time. We’ve spent £38bn freezing it. I think spending priorities may have changed now.”

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