Edelman Budget Briefing 2017 by Edelman

SPRING BUDGET M A R C H 2 017

BOX OFFICE PHIL AND HIS BIG BROAD CANVAS “Standing there with that red box is quite a moment,” George Osborne wistfully tweeted this morning – and his successor certainly seemed to enjoy his big moment this afternoon. There’s a reason why Philip Hammond is known affectionately as ‘Box Office Phil’ around Westminster. Dull would be unfair. Steady, measured, detailed and meticulous would be more in keeping. Yet here was a new Philip Hammond – in animation, at least. A Philip Hammond we haven’t seen before. Relaxed, self-deprecating and even funny, the Chancellor needled the Labour Party, cheered up his backbenchers and produced a Budget which sought to deliver on the Prime Minister’s promise of “an economy that works for everyone”. This Budget had been billed as the one which was supposed to prepare Britain for life after Brexit – the ‘put a pot aside for a rainy day in Europe’ Budget – but in truth, the word Brexit barely passed the Chancellor’s lips. There was no mention of priorities for the EU negotiations and nothing on Article 50. What there was, was a focus on young people (a group which did, incidentally, back Remain in large numbers). Successive governments have failed to really tackle the issue of how we ensure that younger people have the skills and education they need to succeed in the global economy – but this Chancellor clearly doesn’t want to duck the challenge. He knows trust among this generation is at a record low. Young people simply don’t accept that their political leaders are listening or that they have the answers when it comes to upskilling in the face of automation and technological change. So T Levels are a big reform, and finally ensuring parity of esteem for vocational education with academia is a big ambition. In fact, no-one can say that the Chancellor has shied away from talking about tackling the great challenges facing us. From the changing economy to the ageing society; from intergenerational fairness to the shifting patterns of employment, Mr Hammond touched on them all. In keeping with the briefing in advance of the Budget that he would be upfront and transparent, this is clearly a Chancellor who has thought about the issues facing us and is seeking to provide (delete as appropriate) measured / safety first / steady as you go answers – then get on with the job. Of course, it is one thing to identify the problems – on which there is some degree of consensus – and another to reach agreement on the solutions; and this was a Budget which has kicked several cans down the road to a potentially far more controversial Budget in the Autumn. There was a necessary and expected ‘holding’ response from the Government to backbench pressure on the effects of the business rates revaluation; enough to stave off a rebellion in the short term, but the question of fundamental reform will not go away, and a full review beckons.

Similarly, on health, the Chancellor increased the size of the sticking plaster which Ministers continue to use to get by as the NHS and social care system staggers from day to day. But with many hospitals seemingly at breaking point and social care on its knees, fundamental changes are needed. There was the promise of a Green Paper later this year – and the Government made a start by saying that it would fund NHS transformation plans and set up GP triage centres in A&E – but privately they know they will probably need to go big on reform to solve this problem. Hmmm. NHS reform. When have we tried that before? It could yet be the greatest legacy of the May Government – or its biggest missed opportunity. A few other notelets: • “Markets can fail, and where they do we won’t hesitate to intervene” – the Chancellor’s Ed Miliband ‘light’ approach • We may not talk about JAMs anymore, but Ministers are still focused on them, as shown by continued delivery on the Personal Allowance rise • Preserving the Union (that’s the future of the United Kingdom of Great Britain and Northern Ireland, not the various bodies looking after workers’ rights) continues to figure high in Ministers’ thoughts, as shown by the emphasis placed on the money being given to the devolved administrations - usually a part of the Budget speech which is quickly glossed over. There are, then, battles to come on multiple fronts. The Autumn Budget later this year may result in bigger bangs and more fireworks, as the Government is forced to make more controversial choices. Oh, and rebellious Lords aside, by then we will be involved in a small resetting of our relationship with and membership of a 27-strong continental club. Heady days!

Public Affairs Will Walden, Managing Director, Public Affairs

Rob Newman, Account Director, Public Affairs

WINNERS

LOSERS The NHS

The self-employed

A nod to potential future reforms as Ministers back GPs being in A&E to triage emergency cases, and also back controversial local transformation plans. But the biggest question of how to integrate health and social care remains to be answered.

The changing face of employment means that reforms of this kind were coming, but the hike in National Insurance promises to be the biggest controversy of this Budget – the arguments have already started as to whether this breaks a Tory manifesto commitment.

Pubs

London-based businesses

The great British institution gets a business rates discount as Ministers try to recognise their role in local communities.

Those in the capital who aren’t a very small business or are not a pub continue to face a testing business rates rise – with only the promise of a review “in due course” to offer them hope.

Vocations

Car owners

The new T Level aims to finally bring parity of esteem with academia – a holy grail of government over many decades. Might it finally be within our grasp?

The insurance premium tax will rise from 10% to 12% in June – an increase likely to be passed on to consumers. The one saving grace was that there wasn’t a further rise in this Budget.

Robots

Remainers

£270 million will be spent on robotics and driverless vehicles – “something the Opposition know a lot about”, quipped the Chancellor.

The Chancellor’s entire Budget was about preparing Britain to face the challenges of life outside the EU. Despite the fact that at one point last year he was viewed as Remainers’ last, best hope, he gave little succour to those who still cling to the idea of a soft Brexit.

STAKEHOLDER REACTION Nick Watt, Political Editor, Newsnight

Laura Kuenssberg, BBC Political Editor

Trouble brewing on Hammond National Insurance increase for self-employed. Treasury struggling to reconcile with 2015 manifesto, which ruled out rise.

Hammond seems to be enjoying himself, but measures all (as expected) interesting and important but not dramatic or radical

Isabel Hardman, Assistant Editor, Spectator

George Eaton, Political Editor, New Statesman

Can any more experienced Lobby hands tell me whether they’ve ever sat through an Opposition Budget response that they found impressive? I only joined in 2011. I have therefore got no experience of impressive Budget responses.

Tax rises, borrowing up £100bn (from pre-Brexit), endless gags – speech of a man who doesn’t fear Labour in the slightest.

Sam Coates, Deputy Political Editor, The Times

Gaby Hinsliff, Guardian columnist and writer

#Budget2017 business rates: 1. No abolition of the changes 2. More regular revaluations 3. #amazontax on the way

So whacking self-employed will worry many natural Tories & some huge long term problems (social care reform and Brexit) kicked down road