this is bbc news at 11 o'clock. i'm jane hill live at westminster on budget day. the treasury says the chancellor of the exchequer will use his first budget to help prepare britain for a "new chapter" after brexit. phillip hammond is expected to find extra money for social care in england and to help firms facing steep business rate rises across england and wales. but with public services under pressure are there any surprises in store and will some money be kept back for a rainy day? this hour we'll be looking at what might be contained in the budget and throughout the day we'll have reaction to all it holds. good morning — we're live at westminster where the chancellor, philip hammond, will use his first budget — at half past twelve today — to deliver what the treasury has said will be an "upbeat" assessment of britain's economic prospects, while recognising more

austerity lies ahead. with public finances in better shape than predicted, some economists say mr hammond's room for manoeuvre is greater than when he delivered the autumn statement four months ago. but he is expected to say that government won't shirk difficult decisions on tax and spending to address the deficit. in january borrowing was reportedly 1a billion pounds lower than forecast — leading to speculation mr hammond will focus spending on priorities such as helping english councils meet the rising costs of social care. there is also speculation the chancellor will find money to soften the impact of increased business rates being faced by half—a—million firms across england and wales. it follows the the first re—valuation of commercial property values in 7 years. our political correspondent eleanor garnier looks

at what to expect from the first budget of 2017. he's the man known in westminster as spreadsheet phil, the cautious treasury chief in charge of the numbers. so, as the chancellor does his sums, what's he got to consider? well, the big issue that's dominating is brexit. as the uk prepares to leave the eu, mr hammond says he's focussed on keeping the economy resilient with a warning this is no time for spending sprees. even so, there will be cash for new free schools and money to shake up vocational and technical training for 16 to 18—year—olds. but the chancellor's under pressure to spend more on public services with claims social care is in crisis and repeated calls for more money for the nhs plus pleas to help soften the blow for small firms hit by the change to business rates. mr hammond might have chucked out his predecessor's timetable for dealing with the deficit, but both he and the prime minister still believe balancing the books

is the only way to ensure a stable economy that's growing. just to tell you, to find out more about today's budget, you can find the website, all of the details, live updates. and full analysis from all our correspondence. there is plenty of look ahead information and what you might expect and analysis once we have heard that full is taken it from philip hammond which has ever begins at half past 12, after prime minister's questions. let's get some initial thoughts this hour from let's get some initial thoughts this hourfrom our let's get some initial thoughts this hour from our assistant political editor norm smith who is in downing street for us. your topline thoughts about the mood and the tone behind all of this? my sense is that this

will be a much more cautious, careful, almost continuity budget because do not expect any massive change of economic cause, do not expect any big bonanza spending spree. the chancellor in his interviews, the treasury officials have made pretty clear that they don't think he has got any spare money to splash around. above all comedies anxious about the implications of brexit and what that might mean in terms of whether the economy will suffer as we move towards leaving the eu. mr hammond is keen to keep some cash in his back pocket and then on top of that, is the deficit. still around £60 billion, a sick if it went amount of overspending by uk plc. —— a significant. and the continuity part is that we will see almost a situation george 0sborne's policy of slowly, gradually, grinding down the deficit bit by bit. a lot of the policies that mr osborne will announce will feed into this budget.

we will see that continuing cap on benefits, that continuing cap on public sector pay. there will be some renewed cuts public sector pay. there will be some renewed cuts and employment is, all gradually trying to bear down on the deficit, and the little bits of extra money that we get, perhaps the social care, perhaps the business rates, i think we will have to look carefully to see where that money comes from. mr hammond has also suggested that if money is going to be spent, it will have to be saved elsewhere. in the end, europe is the transcending issue of our time and you have always to decide in public life if you have a vote in parliament where that national interest lies. lord heseltine in an extraordinary was sacked for a number of unpaid positions he invite the government

on investment and infrastructure, following his decision to vote gains the government last night in the house of lords over that critical vote about giving parliament the final say on brexit. a lot of controversy about that move, number ten said he was sacked because he breached the official government line. a lot of pro—remain, pro—eu tory mps believe that mrs may sacked him to put a bit stick about, to put a bit of their about and intimidate those tory mps from against rebelling in the commons when the issue comes up there. one of the most extraordinary things i think, jane, is in the wake of lord heseltine's sacking, means there has not been a huge protest and what that tells me is that the pro—european wing in the party have almost led the battlefield. so much so almost led the battlefield. so much so that even when one of their biggest beasts is felled, no one protests. that is so interesting and it reminds us as you have said at the beginning. studio: that

country's departure from the eu covers everything that we will be hearing even if the cop is slightly fuller than people might have anticipated, we will be hearing the chancellor say i will not spend the money because we don't know what is coming down the track. really interesting because there brexiteers fava ro interesting because there brexiteers favaro a bit narked by thor hammonds, saying come on, be a bit positive optimistic. they feel that the chancellor is in effect almost talking down the prospects of brexit and they want a much more upbeat message. thor hammonds however, by the character, is a very cautious, politician. and i think no surprises that this budget is almost certainly going to be a very cautious budget to. thanks very much, much more over the

course of the day. let us just assess the state of the economy, how healthy is it? our business correspondent rachel horne healthy is it? our business correspondent rachel home has been looking at the wider economic picture for us. today is an exciting one for the country's economists — and it matters more for the rest of us than we may think — because the spring budget isn'tjust about telling us where taxes might rise or spending will fall — it's also giving us crucial information on the health of the uk's economy... step forward chancellor phillip hammond — so what's in his briefcase? we are expecting something on business rates, we aren't expecting any big giveaways — and the focus? getting the uk economy fighting fit for brexit — and luckily for the chancellor he's had some better economic news to get him started. first up growth — back in november the office for budget responsibility predicted gdp would grow by 1.4% in 2017

but the signs are that that growth figure might be revised upwards to 2% after better than expected figures in the back half of 2016. next the deficit — that's the amount of money the government overspends by every year — this time last year the deficit for 2016/17 was forecast to be 55.5 billion pounds. but then in the autumn the obr said actually it was probably going to more like 68 billion pounds — but today — because of those stronger growth figures — that deficit is expected to come down — quite substantially. so we will keep an eye out for that. look along the chart — you can see it is following the government's aim to reduce the deficit year on year until they get to a position where they actually take in more money in taxes and investments than they spend on running the country. these predictions suggest that

by 2021 the deficit will stand atjust over £20 billion — could that change in today's fresh figures? we'll let you know. once the deficit is down, phillip hammond can then start to work on bringing down the debt. that's the amount of money the government owes in total — the chancellor said in the autumn that debt as a share of gdp should be falling by 2021. well, the obr do expect that target to be met, but in cash terms — debt is predicted to continue rising each year to reach almost £2 trillion pounds in 2022. that's a pretty hefty overdraft — but some call this chancellor ‘spreadsheet phil‘ — his focus is on figures rather than fireworks — and i'll be back this afternoon to let you know what they tell us. thank you very much, we will see you then. let us find out what people

living in a retirement village will wa nt to living in a retirement village will want to see from philip hammond this lunchtime. our business editor has been talking to them. hello from bournville gardens, this isa hello from bournville gardens, this is a retirement village near birmingham, a lot of activity happening and we are just going to chat to the residents about what they would like to hear from the chancellor. i am so impressed you're not even out of breath. what would you lie to hearfrom not even out of breath. what would you lie to hear from the chancellor today? i would like emphasis on social care because i feel i am one of the lucky ones and my husband also to be hearing this facility with everything we have two hands, what i would also like to see something done for our young people because we had grandchildren and they will never be able to get on housing ladder and i feel awful that. so you are wanting things for other people? yes. i will leave you

to it because i know you have got your breakfast on the go. a couple of other people to meet. mick is the boss of extra care which runs this facility and lots of other ones, what do you think, given that you how is over 300 residents, here and lots around the country, what are they telling you about their worries and concerns? they are worried about the increasing pressure on the health service, fantastic because they enable the residents to live in a supporting environment and that ta kes a supporting environment and that takes enormous pressure of the health system. and that, there is a real mix of people here, some of them they can afford the care they need, or others there is a real pressure? absolutely but this is affordable living, residents have bought a flat or part owned a flat so we are a multi—tenure village. that is important. they all support each other, enormous benefits of living here, that has been verified by researchers like aston

university. i'm going to try and get a good buy from everyone, can we say goodbye everyone, 123! chanting and is it from us. that is steph mcgovern from birmingham. there has been a lot of talk about whether there will be the issue of social care. their last tour generally about that issue and the nhs, richard humphreys is with me, senior fellow for social care at the fund. good morning to you. it is something that a lot of people campaign on, they want to see philip hammond do something, what would you like to see, what does the king ‘s fund think is necessary in this crisis? we have been one of a number of organisations who says that the government needs to address some of the short—term pressures are sailing our social care system. local councils, care providers, charities, and old people and disabled people themselves have all said that we

can't get one like this. it does appear, if reports are correct that the chancellor is going to announce some short—term funding. but as ever, the problems will be in the detail. what we need to look out for, is how much and would it be enough to stave off some of the more immediate pressures of the system. over what timescale will the money be provided, what strings might be attached? and be provided, what strings might be attached ? and crucially be provided, what strings might be attached? and crucially is this new money or money from another local government budget. social care is funded as we know by local councils and local authorities can we all know that they are cash—strapped and no local authority wants to put up its council tax any more than it has too. there are limits to what it can do anyway. are we ever going to see something radical, like the government saying, maybe we need to even think about that funding model. absolutely, we have called for a new settle m e nt absolutely, we have called for a new settlement both for social care funding and the nhs that recognises,

the demands both on the nhs and the social care system. arising from the fa ct social care system. arising from the fact that we are living longer. there are more young and disabled people and we haven't really faced up people and we haven't really faced up to how we fund that. one of the positive things is that the government has recognised in relation to social care, it needs to find a longer term solution. one question, that i think we will not have the answer to today, is that the review which we think the chancellor announced, will announce, it reflects, successive governments over the last 20 years have tried to do something about this with very little success. can this government be the one that succeeds. it is such a long—term goal, that doesn't a lwa ys a long—term goal, that doesn't always sit well with a five—year political cycle. it doesn't, other countries have made long—term reforms. some people say yes there are pressures but some authorities will manage it better than others, bed

blocking and everything we hear about because of lack of social care isn't as bad as other areas. you get a sense that the government will put demands on this, that such and such an authority is doing really well and other council should be learning from their best practice. thelj think from their best practice. the” think there is variation and a lot to be learned but we must be clear that even if all local authorities whereas efficient as the best, that would not close the funding gap. actually it is not all about people stuck in hospital, last yearjust 20% of new requests for help to councils came from hospital. there isa councils came from hospital. there is a large number of people in the community that need help as well and that has got to be juggled, so community that need help as well and that has got to bejuggled, so it community that need help as well and that has got to be juggled, so it is not all about delayed transfer. and it wouldn't close the gap simply because of demographics because as you say? we need to do both, we need to tackle the variation, being better and more effective and we need to put more money in as well. richard humphreys, thank you so much

from the king ‘s fund. let us see if anything emerges about social care, thank you so much, straight to downing street because philip hammond just emerging from number in 11. here is philip hammond on the steps of number 11, the first and last time we will see philip hammond making a spring budget, because he is grappling a spring budget, he doesn't believe that we need them any more. but we will see him again in the autumn because he will be doing an autumn budget. a traditional posed by mr hammond, holding the red box. theresa may has already gone to the commons in preparations to pmq ‘s, usually on budget day, pmq ‘s is a rather understated affair, because all eyes are focused and everyone is waiting, for the big moment, for the budget moment. pmq ‘s can be a bit underpowered and there is a lot speculation that this budget may be

less of an important political event thatis less of an important political event that is often the case because philip hammond has pretty much already signalled to us, that he hasn't got any spare money to spend, and what their money he has got he wa nts to and what their money he has got he wants to keep back because of the potential difficulties that the economy might face, with brexit and leaving the european union, and focused on trying to get the deficits down. there might be a little bit of money but not much and what people will be looking at very closely, is to see whether small additional bits of money are coming from. because government sources have suggested that yes there will be helpful social care but the question is where is that help coming from? whether government or local authorities are having to find the money themselves through saving elsewhere because philip hammond has been pretty clear, that if there is going to be more money than people again to have to make savings elsewhere. so the overall theme of this budget i think is it is going to bea this budget i think is it is going to be a tight budget a cautious

budget a careful budget and a carry on budget. it is game to be continuing, it will carry on with austerity. that i expect is what labour will seek to focus on, the chancellor has choices here, doesn't have too continue with austerity and he could find extra money, for the nhs, or prisons and indeed for social care if he wanted to, because we know, tax receipts have improved a diddle bit over the past few months. the level of borrowing has gone down a bit so the thinking is that mr hammond has got a bit of extra cash which he could put into those key public services if you wa nted those key public services if you wanted to. but say labour is used choosing not to. that will i suspect be the thrust of the labour argument. interesting to see whether mr hammond has any white rabbits to pull out of the proverbial hat. traditionally george osborne and gordon brown, white rabbits were

flying all over the place, this time you wonder because it is not really an philip hammond's normal political psyche to do that sort of thing. he's quite a cautious operator, not one of west was the's showmen shall we say. not one of westminster‘s showmen. whereas george osborne like the big flamboyant gesture that was going to get the headlines. i wondered tomorrow whether the headlines might actually but are the rhondda power, a steady budget a safe budget, none of us, the big razzmatazz, that we have expected to undertake the camerons government and under gordon brown and tony blair, so it might be a different style of budgets that we get this year, it is only six months since the autumn statement. not a huge amount in terms of britain's financial standing. there is not really that much for philip hammond to do. because he had his autumn

statement, six months ago. and if you add to that, we have the autumn budget in six months' time but i suppose in the back of philip hammond ‘s mind, why do i really have too bothered doing much in this spring budget, because it is a halfway house, between the autumn statement and the autumn budget. but we will see because this is a moment when governments can seize the political agenda, they can set a narrative. i half wonder whether we got the narrative yesterday when theresa may, unveiled basically the go—ahead for grammar schools, signalling that they will be more than £300 million for free schools which can then become selective to become the new generation of grammar schools and mrs may saying that she thought that would benefit more deprived parts of the country, poorer pupils, maybe that was the narrative that theresa may wanted from this budget. we might not get much more today. that will be a first i have to say because

traditionally these sort of events, governments always try to set a sort of defining course, a statement of what they are about, because it is a day, when they command all of the media attention so they can make their big pitch. their big story. mr hammond's may simply be, that the economy is safe in his hands, he will continue to bear down on the deficit and he's keeping money back for brexit. it may simply be a message for you can trust us on the economy. that may be his big pitch. let's talk a little bit about one of the specific issues that we will hear something about at lunchtime, that of course is those business rate rises which affects so many businesses across england and wales and let us head tojoe cockburn and andrews alexander. and equipment company. yes i'm

standing literally over this ditch abuse and centre over the centre of heart on the humber estuary, it employs about 850 people, it is a busy warehouse packaging up safety equipment and workwear and then distributing it across the uk and abroad. you can see what is going on behind me, this is one of howell's success stories if you like. it has been a family firm, in the same family forfour been a family firm, in the same family for four generations of —— hull. but while this is a success story, it is against a backdrop of decades of decline. hull did fall on ha rd decades of decline. hull did fall on hard times whether fishing industry closed down, they are hoping that what might reverse their fortunes is the fact that hull is the uk city of culture for 2017. it's a prize a lot of people but it is all about, this city coming out of the shadows. because with that will come investment, much—needed investment to spread some of the social and

economic benefits that people feel here, across this whole region. so what will they wants to hear? they will want to hear about more money coming to cities like hull. there will be more investment opportunities core businesses will be listening for any think that they can pick up on and use particularly in this year as city of culture. now the chancellor philip hammond has said this be a big giveaway. he is known as spreadsheet phil, that ironic term for hammond. he's going to talk about an injection of cash for social care because of the pressures . for social care because of the pressures. as jane was mentioning, money is going to ameliorate the business rate evaluations, some of them are losers. there are winners and losers. he's also going to have to tell us how he's going to pay for it. let us go over to the bbc personal finance expert who will tell us a bit more about that. yes

we have heard that the chancellor won't shirk from making difficult tax and spending decisions, this could mean tax rises. the rumours are that national insurance. employed people could go up. at the moment they pay 9% on earnings of about £8,000 and that compares to employed people, who paid 12%. speculation is, we could see three percentage points in rise on national sharon scott abuse shins for the self—employed. also, duty could go up on various different alcohol types. and also tobacco. watch out for a possible new tax on e—cigarettes, that is something that could be announced. all of this against the backdrop of record earnings, record low earnings growth. and high inflation. that if you have questions when you hear the budget, there are lots of ways to get in touch with us, lots of ways to hear your questions, you can text us, e—mail. have yoursay. oryou can us, e—mail. have yoursay. oryou ca n tweet

us, e—mail. have yoursay. oryou can tweet us, on twitter. thank you very much indeed. let us discuss a little bit more about what we might expect. with me is warwick lightfoot, director of research at policy exchange and member of economists for free trade + lucy thomas, former director or britain stronger in europe. and is now ahead of brexit advice somewhere. we are hearing the mood music is that it is going to be cautious and steady as it goes and it has to be, philip hammond has to be cautious because we don't what is coming down the track?” be cautious because we don't what is coming down the track? i think he is right to be cautious, the uk economy has performed more strongly than anybody expected at the start of la st anybody expected at the start of last year. we were in the phases of an economic cycle and you have to prepare for any kind of economic or

political shots and you don't want to give up on reducing the structural budget deficit. the big issue is how is he going to control public expenditure, how is he going to contain the tax burden and how is he going to make progress on reducing the structural budget deficit and we will have an economic cycle and my worry at the moment is, at the economy is growing faster than its trend rate of growth and we perhaps need a more realistic monetary policy and terms of domestic monetary conditions. except all of those people who would like more money for social care, health, education and schools, they will say it is pretty dispiriting because if there is a bit more money in the pot he should be spending it on important elements of public services? we are halfway through a ten or12 year services? we are halfway through a ten or 12 year period of this school repair. but there is substantial scope for reordering priorities, one of the priorities for spending which gets less attention is defence spending, which my colleagues advise

on. there are a number of areas where priorities will have to be re—scored and public services will have two be reformed so they become more efficient ahead. brexit covers all of this, it covers everything for the whole hour that he says? yes this is a case of safety first, philip hammond says the wants to make sure that there is enough gas in the tank for brexit. he said it could be like an economic roller—coaster so this is getting ready, battening down the hatches and as you were just saying about making sure that there is enough, we have heard about this £27 billion brexit insurance from 2019, to make sure that there is enough, if there are any economic concerns along the way. let's also remember that article 50 hasn't yet been triggered so we haven't even started those divorce proceedings from the eu, it feels very much like, this is the calm before the potential storm and the main budget event will be in november when that will be the first

reaction to what has happened after those talks have been triggered. that said, it has been some months after the country is leading the eu. the country has not gone to pot like so many people have predicted. that it is absolutely fine? for people like me, a campaign to remain it is fantastic see this economy doing as well as it is. i wouldn't want it to be worse than it is now but what we have seen is a fall of 15 points in sterling, and it is predicted that will fall further wants article 50 is triggered and implication of that is triggered and implication of that is increased cost of imports. lets see what happens in the next few hours. let's join lets see what happens in the next few hours. let'sjoin huw lets see what happens in the next few hours. let's join huw edwards

for our special programme. it is the first budget for philip hammond, as the government takes stock. stay tuned for live coverage of the budget 2017. a very good morning from westminster and welcome to our live coverage of the budget.