Wednesday 23 November 2016

Hammond Underwhelms

Compare and contrast. A confident figure seizing the moment and pledging a radical remaking of Britain. Yes, Theresa May looked formidable on the steps of Downing Street in July. She had stolen Labour's 2015 Manifesto and she was going to get away with it. Wind the film forward to November, and her chancellor gets up and lays out a programme that differs from his predecessor's by degree, not kind. And it comes covered in the Prime Minister's ultra-cautious thumb prints.

Let's grab at "call me" Philip Hammond's headline figures. Borrowing is going up by £122bn as he abandoned Osborne's arbitrary budget surplus. Instead, that aim has been kicked into the long grass, like many of May's other "priorities". It's as if Hammond has just heard tell of Alastair Darling's deficit reduction plan from 2010. It also means the debt is set to soar to £1.9tn, partly because of the economic consequences of Brexit (what are those guarantees government will be throwing at big business to keep them in Britain?), and partly because of their uselessness these last six years. Unfortunately for Hammond, the debt-free option that was available to Osborne, of printing money, can't offer a way out as Brexit is getting the blame for inflationary pressures on household goods. An opportunity was squandered for a people's quantitative easing approach as the printing presses shovelled funny money to the banks, which in turn has helped another asset bubble take off.

As the British economy is a tremulous beast prone to tailspin every time someone criticises it, can we soothe the poor dear and take any positives from Hammond's statement? Well, letting fees are gone. You know, one of Labour's policies the Tories had previously decried as communism. Another victory for our ineffective opposition. There's to be a modest splurge on roads, superfast broadband, and 40,000 extra housing units. All welcome, but not enough. The minimum wage (it's not a living wage no matter how much you repeat it) is due for a 30p increase, and there's to be no more savings from social security. That is, at least until after the current planned round of cuts go through.

Unlike Dave and Osborne who would loudly proclaim they were going to do stupid things and went ahead and did them, May and Hammond have gone for the old over-promising and under-delivering trick. Whereas the previous pair's bravado was usually reflected in favourable media coverage, the first batch of hot takes from the hovering commentmongers were luke warm as Hammond plodded his way through, following yet another insipid PMQs performance. This wasn't the statement of a government preparing to go to the country. It's one concerned at keeping policy issues as non-controversial as possible while it muddles its way through Brexit. Politically, it might be just enough for the time being, but for how long?


BCFG said...

Tne IFS are predicting real and nominal wage decline up to 2021. So much for Brexit raising wages!! Maybe they can stop blaming immigrants and maybe the left can stop pandering to that pathetic weak as piss excuse for ant immigrant racism. Fat chance!

It is also predicted that the poorest third will see a fall in household incomes. Anyone who took May's comment about helping the poor even half seriously cannot themselves be taken seriously.

My tip to the poor, if the Tories start claiming they are going to help you head for the hills, fortify your position and start shitting your pants.

jim mclean said...

Over the last week I have came to the conclusion that Brexit will not take place because the electorate realise they are safer in the EU than a Tory of Labout independent UK