Growing the economy is a better way to cut the national debt than running budget surpluses, Philip Hammond has declared in an attempt to sever ties with his predecessor, George Osborne.

The chancellor said that faster growth was “the smart way to shrink the debt”, stating his desire to increase spending on public services and cut taxes as he shifted fiscal policy closer to Labour. John McDonnell, the shadow chancellor, also plans to invest in growth to bring the debt down.

Mr Hammond’s comments to MPs on the Treasury select committee underlined the huge shift in government policy priorities since the days of Tory deficit fixation. Easing the pressure on households has moved centre stage, with the only constraint being that debt must continue to