Labour urges Philip Hammond to invest in struggling public services instead of 'saving a weak Prime Minister'

Pausing the Universal Credit rollout and the lifting public sector pay cap top Labour’s Budget demands

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Labour will call on Philip Hammond to put crisis-hit public services at the heart of next week’s Budget rather than measures focused on saving a “weak Prime Minister and her embattled Chancellor”.

Shadow Chancellor John McDonnell is set to lay out the need for an “emergency budget” to pump funding into struggling hospitals and schools, which would be paid for through tax hikes for higher earners.

Pausing the controversial Universal Credit rollout and lifting the cap on public sector pay are at the top of Labour’s Budget wishlist, while Mr McDonnell will also call for greater funding for infrastructure across the whole country.

He will also ramp up pressure on the Tories to make a major announcement on housing – an issue which has already exposed divisions between the cautious Chancellor and colleagues such as Communities Secretary Sajid Javid.

Mr Hammond is facing pressure from all sides to deliver a make-or-break Budget as Theresa May struggles to regain control in the face of Brexit divisions, Cabinet resignations and the sexual harassment scandal at Westminster.

In a speech in London, Mr McDonnell will say: “In his first year as Chancellor, Philip Hammond has demonstrated that he completely fails to understand how working people are struggling after seven years of Tory austerity.

“Next week the country needs an ‘emergency Budget’ for our public services that are in crisis, not a budget desperately designed to save the jobs of a weak Prime Minister and her embattled Chancellor.“

Mr McDonnell will also rail against failures to tackle tax avoidance following the Paradise Papers scandal, which laid bare the extent of offshore investment by well-known figures including members of the Royal Family.

He is expected to say: “As the Paradise Papers revealed yet again, the Tories have created an economy in which the rich elite at the top do better than ever, while the rest of us have to live with our vital public services teetering on the brink.

“While the Tories refuse to properly clamp down on tax avoidance and push ahead with tax giveaways to the corporations and super rich, public sector workers like our nurses are relying on food banks.

“Our schools’ head teachers have to ask parents for donations to keep them open for our children. Our NHS is so badly underfunded that a quarter of nurses are forced to take a second job.

“Local councils have had their funding for children’s services slashed to the point that charities now warn the crisis risks turning into a catastrophe.”

Mr McDonnell will say his Tory counterpart wants “to pretend he cannot invest on the scale needed yet he has already borrowed more in his first year as Chancellor than any of his predecessors in their first year at the Treasury”.

“There is a better way than this. But it needs a complete break with past failures,” he will add.

Labour has already promised that Britain’s fiscal watchdog would be tasked with forecasting the economic impact of climate change on the public finances, if Jeremy Corbyn was in No 10.