PHILIP Hammond has claimed official data showing the lowest deficit since the 2008 financial crash made clear "what is at stake at this election".

The Office for National Statistics figures showed public sector net borrowing fell by £20 billion to £52bn for the financial year ending March 2017, which is the lowest net borrowing since the financial year ending March 2008.

The Chancellor insisted it was only the Conservatives who could "lock in the economic progress we have made together".

In the past few days, Mr Hammond has signalled that the Tories will drop their 2015 election pledge on a tax lock not to raise income tax, VAT or National Insurance, speaking about the need for “flexibility”.

Last month, he suffered the embarrassment of having to drop his main Budget measure – raising NICs for the self-employed – because it would have breached the Tories’ 2015 manifesto.

Despite the fall in borrowing the Government came in shy of the financial year target of £51.7bn set by the the Office for Budget Responsibility[OBR] in the Spring Budget.

Borrowing, excluding banks, rose by £800m to £5.1bn last month with economists pencilling in a lower figure of £3bn.

Howard Archer, chief UK and European economist at IHS Markit, said: "Essentially meeting the revised 2016/17 fiscal target is a boost for the Chancellor's credibility after it took a knock after he swiftly and embarrassingly scrapped his March budget plans to raise national insurance contributions for the self-employed.

"Public finances over 2016/17 benefited from the resilience of the economy and a strong labour market which lifted tax receipts. Indeed, corporation tax receipts were at a record high of £55.7 billion in 2016/17."

The OBR, the Government's fiscal referee, said in March that it had expected Mr Hammond to undershoot previous borrowing targets for this financial year, revising its outlook from £68.2 billion to £51.7 billion.

It came after the Chancellor ditched his predecessor's target of balancing the books by 2020, vowing instead to put the public finances back in the black ''as early as possible'' in the next Parliament as part of a new Charter for Budget Responsibility.

However, the OBR also warned that smaller deficit hikes in four years’ time, coupled with cost pressures for an ageing population, meant Mr Hammond was unlikely to meet this fiscal target.

John McDonnell for Labour said the figures showed the national debt had gone up by £123.5bn since March 2016 under the Tories.

"After seven wasted years of Tory economic failure, supported by both Philip Hammond and Theresa May, the deficit has not been cleared as they promised, and the national debt continues to rise.”

He added: “With a Tory Chancellor, who won’t rule out raising taxes on low and middle earners, and has no plan to deal with inflation rising ahead of earnings, it is clear the Tories want the rest of us to pay for their mistakes.”