I FEEL obliged to write to the Chancellor in advance of his Autumn Statement today because I think the Government is going wrong.
You may remember me. I once spoke at your constituency’s annual dinner and in discussion we disagreed about energy policy. I suspect we still do. You may also disagree with what I have to say in this open letter, but it needs saying.
First, you should not be making an Autumn Statement. I battered away at the Treasury in my time in No 10 about this. It is politically and presentationally daft to separate spending from raising the cash for it by five or six months – i.e. between the Autumn Statement and Budget. The two ought to be reconciled in one statement, which might then reasonably be called a Budget.
It seems that the Treasury still thinks it knows best, even though the IMF now apparently agrees with me, so I feel I must set out my thinking.
The overriding point is that you have little room for manoeuvre even if you have, wrongly in my view, ditched the previous Tory government’s plan to balance the books by 2020.
You cannot promise major tax concessions or increase borrowing if you are to be considered a serious Chancellor – not with a budget deficit of £70bn and national indebtedness of £1.5 trillion (a million million) rising at £5,000 per second. That national debt represents nearly £16,000 per head of population.
I know that the Prime Minister is desperately anxious to help the JAMs (just about managing). But the Government urgently needs to get over that the one sure way of protecting the worst off is to run a sound economy able to withstand shocks. You cannot longer term help them with debt rising steeply.
And it is with the longer term that you must be preoccupied. Short term, we are doing relatively well as a nation. The economy is growing, with a record number of people in work and inflation – at least for the moment – under control.
There is also on the whole a certain optimism about Brexit and our economic future, however much the Remoaners whimper their woe over us.
What we need is a steady ship growing into a future where the world is our market, freed of the EU’s grip on trade. You need to help firms win business in the world market whether we have a “soft” or “hard” Brexit, whatever those terms mean?
This is where we come back to a sound economy. You need to convince the world that the British Government has got its financial head screwed on the right way. Unfortunately, you have made your job harder by ditching the aim of solvency by 2020.
I am extremely nervous about this idea of splashing out borrowed billions on infrastructure, including the HS2 railway line. Why do we need an HS2 to shave 45 minutes, or whatever, off the journey from Leeds to London if you can work during the trip? It is neither here nor there.
If, on the other hand, there is an urgent need for more rail capacity, has anybody investigated the possibility of re-equipping lines closed by Dr Beeching half a century ago and since converted into footpaths and cycle tracks instead of driving the HS2 through whole housing estates?
Then there is the shortage of skills. The idea of meeting it through immigration is contemptible.
We should no longer allow the education system to neglect technical education or employers to fail to train their employees and instead poach them from companies that do. They – as well as you – have a responsibility to the nation and its indigenous people to equip them with the necessary skills.
As for housing – where an orchestrated campaign is perhaps reasonably being conducted against stamp duty – you will not restore the ability of every freeborn Briton to own his own home unless you introduce the serious “brownfield” housing drive I have yet to see.
In short, Chancellor, you need to demonstrate prudent ingenuity to provide a sound base for the steady, continuous and unspectacular equipping of the nation with the many things needed to make a success of the future.
I, for one, will not complain if you enhance your reputation today for boring people to tears by being sensible and reminding everyone, and especially company bosses, that they, as well as you, have a responsibility to Britain and its people.
It is time we all stopped demanding incentives and started delivering.