POLITICS

Budget 2017: What the Chancellor WON'T Say

'The debt is out of control' and 'I'm about to get sacked,' for instance.

22/11/2017 11:21 GMT | Updated 22/11/2017 11:22 GMT
PA Wire/PA Images
Philip Hammond will not be relishing the thought of delivering his budget today

 

1, “There are no unemployed people.”

At least not if he wants to: (a), keep his job; and, (b), tell the truth.

Unemployment is at its lowest since the 1970s, which he would have been able to trumpet, had he not appeared to deny there were 1.42 million people out of work in the UK between July and September this year during his pre-Budget interview with Andrew Marr on Sunday

2, “The UK economy is leading the G7 on growth.”  

That’s because it simply isn’t the case, at least not since the Brexit vote. The International Monetary Fund is predicting UK growth will slow to 1.7% in 2017 and 1.5% in 2018. In 2016, only Germany was growing faster than the UK.

3, “The national debt is out of control.”

Jaw-dropping borrowing figures released this week starkly underlined the bind the Chancellor is in. The Government borrowed £8billion in October - £500million more than in the same month last year. The national debt now stands at £1.79 trillion and has tripled since the turn of the century. Debt interest payments jumped 25% to £6bn last month alone.

It means Britain is paying £8m an hour to service its national debt. All of which the Chancellor will want to keep very quiet about should he want to take advantage of low rates on Government borrowing to invest in housing, as some Cabinet colleagues have asked him to do.

Toby Melville / Reuters
Philip Hammond with Business Secretary Greg Clark 

 

4, “We are spending less money in the North than we are in London.”

A recent report by the IPPR think tank highlighted that  planned transport infrastructure is set to be £1,870 in London compared with £280 per person across the North. Given that the North saw a swing toward the Conservatives at the General Election, the Chancellor may choose to spend more cash in the region, but he will be coming from a very low base.

Infrastructure spending could be thin on the ground, full stop. It was revealed in August that an effective “moratorium” has been imposed on loans to the UK by the European Investment Bank (EIB). The EIB loaned £6.9bn to the UK in 2016.

5, “Any pay rise I give you will be meaningless.”

He might want to avoid this little admission. Wages are falling in real terms, and falling faster than pay. Inflation rose from 0.5% in June 2016, when the Brexit referendum took place, to an eyebrow-raising 3% in October. Hammond is widely expected to lift the 1% public sector pay cap, but whether he will meet unions’ demands remains to be seen. Nurses want a 3.9% rise while teachers are lobbying for as much as 6%.

Unions have also been asking the Chancellor to introduce the real living wage, which is some £1.25 higher than the national living wage of £7.50 for the over-25s (under-25s get the minimum wage of £7.05). The TUC’s Frances O’Grady pointed out that the living standards squeeze caused by the financial crisis and the Brexit means that the average British worker hasn’t seen a real-terms pay rise since 2006.

Unless the Chancellor is prepared to dig *very* deep, it’s unlikely he will be able to solve these problems. 

6, “I’m about to get sacked.”

Hammond has been behind a series of gaffes, including claiming there are no unemployed people, committing to getting into a driverless car for a photocall (anyone a fan of metaphors?), and using “fit for the future”, a by-word for austerity for his budget tagline.

So, the Chancellor is not a popular figure among Tory MPs.

As a remainer, Brexiteers have also frequently criticised Hammond for a failure to show the vision needed to steer the country towards Brexit. Theresa May was lukewarm in backing him before June and was thought to have lost patience with him ahead of the Budget this week, forcing his department to promote measures on education ahead of the budget.

The Tories are desperate to change the conversation given a disastrous conference, which followed an equally disastrous election campaign. Given the constraints on the public purse, however, it seems Hammond has little room for manoeuvre to deliver on this and that his days as Chancellor could indeed be numbered.