ONE issue hovers over Chancellor Philip Hammond’s Budget next Monday like an angry wasp. No, it isn’t Brexit, though there is a sting in its tail, too. It is the word “austerity”.
Prime Minister Theresa May made a serious error when she proclaimed an end to austerity at the Tory party conference.
It was inept politically. It just played into the hands of Labour leader Jeremy Corbyn who, in his blind zealotry, sees an austere Britain all around him.
It was wrong politically because it came as a gift to Ministers who – as in all governments I have worked for – see the opportunity, given the slightest opening, to demand ever more money for their budgets.
It was wrong economically because it raised expectations when after 10 years we have yet to eliminate the £153bn deficit left by Gordon Brown. It is still a £25bn-£30bn millstone round the Chancellor’s neck.
It was also wrong in fact. I speak as a pensioner who has lost thousands of pounds since the crash 10 years ago because of historically minimal interest rates.
As a friend frequently asks me: where do you beneficially put your money these days?
It is a curious definition of austerity when it seems that obesity is Britain’s number one health problem, with drug addiction not far behind. Fashion, not penury, clothes us. Why, they even pay the earth for jeans with more holes in them than a colander.
People still flock abroad for holidays. They can even afford to pay through the nose to go to football matches.
What is more, the economy is growing, inflation and unemployment are low and employment is historically high. It is true that youngsters cannot get on the property ladder but that is primarily because the immigration floodgate opened by Tony Blair is still ajar.
Of course, there is poverty. The poor are always with us. But it is relative and is constantly redefined as technology advances. Leaving aside illegal immigrants, it is concentrated among the elderly, and especially women, who never had any real chance to build up a cushion for retirement.
If there were the slightest compassion in this world, our priority would be to concentrate help where it is most needed – on the poor elderly and the weak, vulnerable and chronically ill.
Oh yes, Mrs May has promised another £20bn that we don’t yet have for the NHS over several years without, so far as I can see, demanding an improvement in its management and better use of money.
All this – and the £50bn-plus HS2 – when we should be husbanding our resources for the brave new post-Brexit world outside the EU, assuming we ever get there.
In short, my sympathies go to Chancellor Hammond, even if he has outdone Private Frazer in the Brexit doom game.
He should be judged on Monday not by his largesse but by his conservatism with both a small and capital “C”. He should first show his determination to put the nation’s finances on an even keel. That means he has not got a lot of cash to throw around.
In all justice, whatever he finds available should go to alleviating distress. That would be in the Conservative tradition with a capital “C”. So, too, would the repair of our defences, given the sheer nastiness of Vladimir Putin’s regime and the epidemic of violent lawlessness at home.
He should not protect the High Street or anything else from the cold winds of competition, but he should make sure it is fair competition. It is an outrage that the big, international hi-tech and marketing firms get away with derisory contributions from profits to our tax income.
He should also remember that Conservatives stand for small government and low taxes. He needs to restore the nation’s faith in Conservatism by cutting – not raising – taxes in a growing economy. After all, the evidence is that you can raise the tax take by slashing tax rates.
I do not pretend that the Chancellor’s job on Monday is easy. Houdini would be daunted by the demands of his balancing act. But he should not forget that Chancellor Nigel Lawson raised Britain’s spirits in 1986 with a Budget that cut the tax rate, even though he had lost £5bn because of falling oil revenues.
Let Chancellor Hammond complement common sense with ingenuity and incentive with justice. He should also sting the austerity-mongers by telling them bluntly that Britain ain‘t seen nothing yet if Jeremy Corbyn and John McDonnell get anywhere near the nation’s finances.