WHY oh why did Chancellor Philip Hammond have to give a so-called Spring Statement yesterday – unless it was to expose Labour’s dangerous obsessions?
You may argue that it was because of the election in June last year. He then came forward with a Budget last autumn so, whereas we used to have an Autumn Statement and a Spring Budget, we are now to have a Spring Statement and an Autumn Budget.
This is so unbusinesslike, as I used – as No 10 Press secretary – to tell Margaret Thatcher to try to get such a businesslike PM to change things. Alas, I made no progress.
Yet common sense requires an annual statement bringing together revenue and spending in one comprehensive whole. We might then know better where we stand – and why – allowing for the fragility of economic forecasting.
Our system is so hidebound by custom and practice that the Chancellor was on his feet in the Commons yesterday, even though he is supposed to have gone some way towards my concept of good financial conduct by bringing tax and spending decisions together.
In short, yesterday was merely an ebullient update on where we stand while still being invested with the status of a mini-Budget with all the inherent expectations and liability for criticism.
Comically, the Treasury spent the weekend trying to douse expectations of any fireworks from a notoriously dull Chancellor.
Why does the Treasury’s stock of double first degrees lack the wit to save itself and the Chancellor a lot of unnecessary bother?
There is already too much economic navel-gazing, but if they feel they really must give us an interim report on the economy, why not plant a Parliamentary Question, which would beneficially be shorn of the trappings of a budgetary occasion?
The result was that they rushed to advertise yet again their sheer incompetence as forecasters, as demonstrated by Brexit’s Project Fear.
Indeed, “Spreadsheet Phil” enjoyed himself telling us the British economy is doing rather well in spite of Brexit uncertainty, the sheer spite of the EU’s negotiators of our departure and with Labour leader Jeremy Corbyn threatening suicidal spending in the wings.
Only four months after his gloomy Budget last November, the economy is growing, exports are up, the trade deficit is falling and manufacturing output has risen for the ninth month in succession.
Unemployment is low and employment is at a near record. Even our dismal productivity is picking up. Output per hour has just had its best two quarters for 10 years.
You do not, of course, need to tell me that pride goeth before a fall. This is an uncertain world and we cannot read the future with any degree of accuracy. That is why I am addicted to living within our means. I expect the nation to do so, too.
My “housewifely economics”, as they were dismissively dubbed in the Thatcher years, are treated with contempt by hosts of economists who underpin Corbyn & Co’s approach to politics. Tax and spend is their mantra.
So, in the end, the only question today is not whether the Chancellor should have made yesterday’s statement but, given that he did, whether he said the right things, given his somewhat accident-prone record.
In other words, did he resist temptation? According to forecasts he will need to borrow in this financial year only about £40bn – only! – instead of the forecast £49.9bn, give or take a billion or two.
He deserves congratulations for this, but he has still a long way to go. We need to be producing budget surpluses, not deficits, to put ourselves in the best position to weather any storms along life’s road. That means that Hammond does not have a £7.5bn-£10bn windfall, as it has been described.
Instead, he must stop spending more than we raise in tax and dismiss Corbyn and JohnMcDonnell’s risible concentration on “austerity”. What we want – and need – are budget surpluses and tax cuts prudently applied.
After promising a balanced approach to deficit reduction and spending, the most I can say is “so far, so good”.
He will be judged by his performance against the background – never forget – of our national debt soaring above £1.9 trillion. The best way the Chancellor can serve the many, and not just the few, is to run a tight ship and get on, I trust, with reforming the NHS and our welfare, education and law and order systems instead of feeding them evermore cash to waste.
The world is riddled with debt. We need less, not more, of it.