‘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,’ Hammond said.

However, he warned ‘there is no room for complacency’ and said that with the £1 in every £10 spent, reducing the deficit remained critical. ‘But make no mistake. The task of fiscal consolidation must continue,’ Hammond said.

In his overview of the economy, Hammond said the markets had calmed since the referendum vote, while many of the recent data have been better than expected. Acknowledging that the Brexit vote had created considerable uncertainty, Hammond said: ‘Throughout the negotiating process, we are ready to take whatever steps are necessary to protect this economy from turbulence.’

Hammond summed up his key tasks as dealing with the deficit, raising productivity, rebalancing the economy, and rebuilding the UK’s infrastructure.

‘If we raised our productivity by just 1% every year, within a decade we would add £250bn to the size of our economy; £9,000 for every household in Britain.

‘Our productivity performance is grossly uneven. Still too reliant upon a few key sectors. Still too focussed on London and the South East,’ he said.

Northern Powerhouse

Hammond announced continued support for the Northern Powerhouse project, and said the government would be funding major infrastructure work, although there was no direct mention of investment in high speed broadband capacity, which is a key issue for many businesses.

However, he made no mention of any specific fiscal stimulus and, unlike Osborne, did not indicate that the UK had plans to lower the rate of corporation tax to 15% post-referendum in order to underline the message Britain is open for business.

Hammond said: ‘At 20%, we have a highly competitive corporation tax rate. And as it falls to 17% over the next three years, it will be more attractive still.’

He went on to pledge to make ‘the British economy the most outward-looking, most dynamic, most competitive, high wage, high skilled, low tax economy in the world.’

There was particular reference to the need to support hi-tech industries and skilled workers, with Hammond citing driverless cars, graphene, the Internet of Things, artificial intelligence, 3D printing, virtual reality, advanced robotics as important developments in the future. The government is to provide a further £220m of support to tech innovation, he announced.

On the specific issue of British businesses and other organisations bidding to receive EU funding while UK is still a member, Hammond said the Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria that if they secure multi-year EU funding before the exit the government will guarantee those payments after Britain has left the EU.