PHILIP HAMMOND will be hoping for a better fate than Selwyn Lloyd – the last Chancellor of the Exchequer to deliver a Budget on a Monday. Within months, he was the highest profile casualty of Harold Macmillan’s so-called ‘night of the long knives’ in 1962 as the Tories imploded after a prolonged period in power.
Yet, while Mr Hammond did bring forward planned tax cuts to thwart a threatened rebellion by Brexiteer backbenchers in this week’s Finance Bill votes, this was little more than a holding statement as Theresa May’s Government buys itself time.
Not only are major decisions on the allocation of public finances delayed until next year’s long-planned spending review, but the Chancellor admitted that he will have to rip up his current plans – and deliver a new Budget – if there’s a no deal Brexit.
Given this – and the fact that most of the main measures had already been announced by the Prime Minister and others – Mr Hammond did his best to lift the morale of his party by announcing a number of short-term fixes to try and demonstrate that austerity is coming to an end.
However it could be argued that the extra money announced for Universal Credit, social care, education, business rates, potholes and so on is an acceptance that some previous Tory spending cuts have gone too far and been detrimental to the country.
They also need to be set in the context of very low economic growth forecasts – and Mr Hammond’s insistence that he can afford to bring forward changes to personal tax allowances when he announced very few new sources of income for the Treasury other than the so-called Google tax and environmental measures to reduce the use of plastic packaging. There’s every likelihood that cuts to income tax will be offset by significant rises in council tax to shore up local government finances.
Yet, while the Government will view this Budget a success if it passes this week’s Parliamentary votes unscathed, the Chancellor’s delivery – which, at times, was juvenile – is unlikely to endear him to those Yorkshire families whose support is crucial to the Tory party’s future electoral prospects here.
They’re the people who judge governments by the quality of public services and, while Labour’s plans are unsustainable and would ruin the economy, they still need to be convinced that Mr Hammond’s cautious approach is the right one when so many of the area’s hospitals and schools are scrabbling for cash.
And they will have spotted that there was no mention of Yorkshire in a Budget which could – and should – have been used to rebalance the economy in favour of the North.
Though there’s a further £37m for the feasibility study already underway into Northern Powerhouse Rail, and a vague promise in the Chancellor’s post-Budget briefing of “a refreshed Northern Powerhouse Strategy to be published next year”, Lord Jim O’Neill – a former Treasury minister – said that the Government needs to show much greater commitment to this policy agenda or “stop talking about it”.
It’s a forlorn hope when the Government is so bogged down by Brexit. And here’s the irony. Given the purpose of an Autumn Budget was to provide business with greater certainty ahead of a new financial year, all the Chancellor did was prolong the uncertainty and paper over some of the policy cracks – for now.