AUTUMN BUDGET N O V E M B E R 2017
FISCAL PHIL LIVES TO FIGHT ANOTHER DAY WILL WALDEN, MANAGING DIRECTOR PUBLIC AFFAIRS
CRAIG WOODHOUSE, DIRECTOR PUBLIC AFFAIRS
Fourteen years ago today, with failure ringing in the ears, the seconds ticking down, and hostile crowds on all sides, he produced a rabbit out of a hat and everything changed.
Allies of the Chancellor described the pressure on him to get this Budget right as “ludicrous”. The devil is always in the detail, but on first glance it looks as though Philip Hammond might just have managed it.
No not Philip Hammond. Jonny Wilkinson of course. Only back then you could argue that Wilkinson's last minute World Cup winning drop goal was nothing compared to the task ahead of our beleaguered Chancellor today.
He had a headline-grabbing “rabbit” in his hat to appease the baying Westminster journalists who are so keen to see him fail, which took the shape of scrapping stamp duty for 80 per cent of first time buyers.
Back then the captain hadn't just blown an extensive lead, there wasn't about to be a fundamental shift in the relationship with the rest of European or indeed world rugby, team productivity was rising not falling, and on the sidelines there wasn't a bespectacled stand-in jumping up and down telling everyone he was the better option to deliver victory.
He sounded just about positive enough about Brexit to appease Eurosceptic Tories, talking of the “new opportunities” it would bring as he announced an extra £3 billion to prepare for leaving the EU. Attempting a Churchillian flourish, he told them: “No one should doubt our resolve!”
Will we hear more of Michael Gove and succession in the days ahead perhaps? Remember the detail is often in the nitty gritty of the red book, and the holes often emerge within days rather than hours. Never has Hammond needed his 'spreadsheet Phil' reputation for detail to come good more than in the days ahead. The Chancellor has just delivered his first Autumn-only Budget nine months after his Spring Budget unravelled so spectacularly over plans to raise national insurance contributions for the self-employed. Today he faced anxious calls over housing, public sector pay, and business rates amongst many competing demands. His hostile audience included the City, the Westminster Lobby, Jeremy Corbyn's resurgent Labour opposition, and febrile MPs across the war-ravaged backbenches of his own party. And all of it framed by Brexit, the biggest unknown of all. Given what's happened since June 8th, given all the above, it's remarkable the Tories are still polling at about 40% and still lead on economic competence. After today will that have changed? He promised a Budget for Brexit Britain 'fit for the future'. So how did he do? My colleagues Craig Woodhouse, Lucy Thomas, Pawel Swidlicki and Harry Spencer are about to tell you...
He made some significant announcements about preparing Britain’s economy for the challenges of the technological revolution ahead, including £500 million for a range of initiatives including Artificial Intelligence, 5G and full fibre broadband, an extension of the R&D tax credit, and a boost for maths teaching – fitting the Government’s narrative of “building a Britain fit for the future”. He tried to keep hard-pressed voters on side with freezes to fuel alcohol and air passenger duties, and unveiled the latest increases to the tax-free income tax personal allowance. He reached out to small businesses by sparing them changes to the VAT threshold, and bringing forward a change to how business rates are calculated. He announced extra money for the NHS, and a £1.5 billion series of changes to the fiascohit Universal Credit. And he ended it all with a £44 billion package to help fix Britain’s broken housing market.
PUBLIC AFFAIRS
The Chancellor’s Budget speech, littered with clunky jokes and masking some gloomy economic numbers, is probably enough to stave off calls for his sacking. But there can be little doubt it is not the Budget speech he would have wanted to give. It was full of signs of pressure from elsewhere: fixing Britain’s housing market is a passion of Number 10. Banging the drum for Brexit is definitely not Hammond’s natural territory. The Chancellor admitted he had been cajoled into several announcements for Scotland by the collective power of the 13 Scottish Tory MPs. Clever Labour politics pushed the Tories into sorting out Universal Credit, while the entire premise of trying to “win back” young people – exemplified by the stamp duty cut and a new cut-price rail card for 26 to 30-year-olds – is a response to Jeremy Corbyn’s unexpected general election success. This wasn’t a game-changing Budget, but more a response to the fact the game changed with June’s general election result. Unless there are some howlers hidden in the small print of the Red Book, “Fiscal Phil” will live to fight another day. Whether he is happy with his day’s work is another matter entirely.
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