We should be thankful for Philip Hammond, or ‘Spreadsheet Phil’, as he is unaffectionately known.
Hammond’s predecessor, George Osborne, had a penchant for gimmicky giveaways at budgetary set pieces. His record of job creation and enterprise boosterism, among other things, are commendable – but his rabbit-out-of-the-hat despatch box deliveries would have no place in the new era of Brexit-induced uncertainty.
The new Treasury helmsman, then, managed to strike a balance: between talking up the strengths of our economy, and emphasising the scale of the challenges ahead; between headline grabbers where they are needed, and sound fiscal management; between orthodox conservative incrementalism, and Keynesian interventionism.
“What’s more, this loosening comes…in the shape of vital infrastructure investment’’
Sensibly, he abandoned Mr Osborne’s pledge to eliminate the budget deficit by 2020. Without Brexit, that may have been achievable and, to be sure, we must continue in the direction of budgetary surplus. But, it makes sense in the face of reduced tax receipts and market uncertainty to give the economy more fiscal wiggle room.
What’s more, this loosening comes not in the form of relaxing departmental spending controls, but in the shape of vital infrastructure investment.
The chronic unproductiveness of the British economy is, in part, due to a long-term lack of infrastructure development: Mr Hammond announced a welcome £23bn productivity fund along with billions for various projects, such as fibre optic, digital rail signalling and local transport. In addition, the £3.7bn pledged towards building more homes will aid economic mobility, and hence productivity.
The media has not tired of parroting the horrible acronym ‘JAM’, for those people deemed ‘just about managing’. Its cringeworthiness aside, the government is right to be focusing on people who for too long have felt left behind by rapid economic change. The long-term productivity investment will, ultimately, be the best way to help these people. But for the short-run the chancellor announced a series of positive steps to ease the financial burdens people are facing.
Letting agents’ fees will be banned, something students will welcome. With rents already increasing, it is right for government to step in prevent this exploitative fleecing of tenants. The tax-free allowance will rise again to £12,500, taking many more people out of income tax altogether, and the minimum wage will continue its ascent towards £9. The chancellor was also right to relax benefit cuts; the slower pace of cuts will avoid the damaging effects often unnoticed by the previous administration.
The British economy faces huge challenges as it moves towards Brexit. Our national debt is enormous: equal to more than £30,000 per person. Businesses face investment uncertainty and, meanwhile, the global picture is anything but rosy. So the modest but vital announcements made by the chancellor will help to steady the ship and prepare our economy for shocks ahead.
While other parties flounder with no way of explaining how their plans would work, the Autumn Statement should be commended.
Philip Hammond’s Autumn Statement was an embarrassment for the Tories. I almost felt sorry for him, as he confessed failures, abandoned previous policies and tried to dress up tiny investments as something meaningful.
My sympathy quickly disappeared when I remembered he has been part of the government which has imposed the worst austerity in British history.
Actions presented as progressive do not survive scrutiny. The historic Wentworth House is going to be saved, which is admittedly good news. Letting agent fees have been banned. That’s good, but the statement did nothing to cap private rents. Letting agents will simply make up for the lack of fees by hiking rents even higher.
The rise in the minimum wage is welcome, but the rise of 30p isn’t as much as was promised at this stage in the parliament. It still isn’t a genuine living wage, and it still doesn’t extend to under-25s.
‘‘Philip Hammond is a man simply rearranging the deckchairs on the Titanic’’
Brexit played havoc with Hammond’s statement. Firstly, the golden promise of £350 million more per week for the NHS was cast aside, confirming the Leave campaign as a bunch of liars. Second, the economic impacts of Brexit are set to be staggering costly for our country.
Inflation is set to rise sharply, growth forecasts are down, tax receipt forecasts are down, and article 50 hasn’t even been triggered yet. You’d be right to say that Brexit isn’t Hammond’s fault. He supported Remain and didn’t make outlandish promises on the sides of buses.
What is his fault is the fact that he is totally bereft of ideas, resulting in his inability to deal with it. His utterly pointless activity of replacing the spring budget and autumn statement with a spring statement and autumn budget is symbolic of his economic strategy for Brexit Britain. Philip Hammond is a man simply rearranging the deckchairs on the Titanic.
‘‘A Labour Chancellor would have been crucified for a statement like this’’
For six years, deficit reduction has been the centrepiece of not only Tory economic policy, but the national mission of the whole government. In 2010, George Osborne promised to eradicate the deficit by 2015. He failed.
Hammond is now predicting it will be nearer 2025 that we finally get rid of our deficit. The Tories have presided over national debt rising
to a record high £1.5 trillion. It is now set to soar to more than 90% of GDP, hitting £2 trillion. A Labour Chancellor would have been crucified for a statement like this, but it is the Tories who have failed. Only Labour offers a real alternative.
Last modified: 2nd December 2016