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LONDON — Chancellor Philip Hammond has warned that Britain must live within its means as it prepares to leave the European Union.
In an article for The Sunday Times ahead of his first budget on Wednesday, Hammond said the Conservative government will maintain its commitment to financial discipline and cutting the deficit.
"While we are making steady progress in eliminating the deficit, there are still some voices calling for massive borrowing to fund huge spending sprees. That approach is not only confused, it’s reckless, unsustainable, and unfair on our young people, who would be left to deal with the consequences," he wrote.
He said Britain's economy has been "remarkably resilient" since the Brexit vote in June last year and his budget will be aimed at ensuring Prime Minister Theresa May enters negotiations with the EU in a strong position.
"Quiet satisfaction at the strong performance of our economy should not be mistaken for complacency: As we begin our negotiations with the EU we are embarking on a new chapter in our history," Hammond explained.
"We need to maintain our commitment to fiscal discipline and to strengthen our economic position as we forge our vision of Britain’s future in the world."
The Sunday Times reported that Hammond is looking to build a £60 billion "Brexit war chest" to boost the UK's "resilience" to economic turbulence. Stronger than expected economic growth of 2%, falling borrowing, and higher tax receipts mean that the £27 billion Hammond set aside for 2020 could more than double.
Although his message on spending was one of caution, Hammond did outline some areas where the government will invest.
The Treasury will plough £500 million into improving the skills of young British workers, according to The Sunday Times. The money will fund so-called "T-Levels," more vocational training to sit alongside "A-Levels" in one of the most significant overhauls of young adult education in the UK in 70 years.
The newspaper also said Hammond will provide local councils with an "emergency cash injection" of more than £1.3 billion over the next two years to combat the crisis in social care. Both spending plans will be funded by cuts elsewhere.
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