Since Theresa May became Prime Minister in July, both she and Mr Hammond have made clear they will ditch George Osborne’s target to get the UK’s finances into surplus by 2020 – a goal which the former chancellor himself acknowledged was unlikely to be attainable following the vote for Brexit.
But Mr Hammond will use a high-profile speech to the Conservative annual conference to signal that this does not mean an end to the age of austerity inaugurated by Mr Osborne in 2010.
The new plan will continue the “task of fiscal consolidation” begun under his predecessor and maintain controls on public spending. Mr Hammond will say. He is set to say: “The fiscal policies that George Osborne set out were the right ones for that time. But when times change, we must change with them. So we will no longer target a surplus at the end of this parliament.
“But make no mistake. The task of fiscal consolidation must continue. And it must happen within the context of a clear, credible fiscal framework that will anchor expectations, control day-to-day public spending, deliver value for money and get us back living within our means.”
“At the Autumn Statement in November, I will set out our plan to deliver long-term fiscal sustainability.”