1. PHIL SPACE
It’s Budget Day. But here’s a spoiler alert: for many Tory MPs and for No.10, it’s Brexit Day next March that looms larger. Theresa May’s allies fear doing anything that will upset already-mutinous backbenchers who see the PM as an electoral deadweight and Philip Hammond as the ‘Remoaniac-In-Chief’. That’s why, for all the number-crunching and hot takes, today could turn into a mere space-filler in the political calendar. Many big decisions on tax and spend look set to be postponed until after the UK quits the EU. The Whitehall spending review is next summer, and I wouldn’t be surprised if the Spring Statement is also held back until after we’ve left.
Still, today is politically useful for the Government if the overall Budget message can somehow persuade the voters that “better times are ahead”. Who wouldn’t like the idea of more cash for the NHS, more homes being built (by letting councils borrow more), more tax from internet giants and even more repairs to basic things like road potholes? The Treasury doesn’t want to ‘out-Corbyn Corbyn’ on the end of austerity, but to signal a gradual return to balancing the books.
The danger is that Labour’s pitch sounds more tempting because it offers a swifter, simpler end to the misery. And you can bet Corbyn will today focus on impact of the cuts on the poorest. He could pick up on one of the most fascinating revelations this weekend: the GMB’s Freedom of Information request that showed Treasury officials explicitly warned ministers that the public sector pay cap would “make it harder for the government to hit the Child Poverty Act targets”. George Osborne carried on regardless.
Let’s see just how radical Hammond will be in tackling another Osborne legacy, cuts to Universal Credit. We have an excellent on-the-ground piece on the impact the new benefit is having on claimants. We also have a blog by Iain Duncan Smith this morning in which he urges the Chancellor to delay income tax cuts and instead use the money on welfare. Specifically, he wants the Universal Credit ‘work allowance’ threshold to be raised, declaring this would be “the most targeted way of giving the poorest families the biggest tax break”. “While three quarters of the gains from increasing the personal tax threshold are felt by the top half of earners in the country, every penny invested in restoring the UC work allowances threshold goes to families who we know are already in need of income support,” he writes.
I wonder whether Hammond will offer one tempting signpost on the end of austerity by announcing Osborne’s freeze on working age benefits really will end in 2020? In her own blog for HuffPost, former Education Secretary Justine Greening points to the bigger political prize the Tories need to focus on: compassionate Conservatism. She writes that “lost potential is the biggest drag on this country’s productivity…until the Treasury has social mobility at the heart of its tax and spending strategies then it will continue to fail to shift the dial”. And on ITV’s Good Morning Britain, Greening livened things up with a bit of honesty when asked if she would run for the Tory leadership. “I might be prepared to….Things need to change don’t they? And people need to have some hope for the future.” It’s a reminder that for some Tory MPs, an ideas (and power) vacuum at No.10 is the space that most needs filling.
2. A REAL DIVVY
Hammond is not a man who sounds enthusiastic about Brexit at the best of times. And his version yesterday of a Brexit ‘dividend’ won’t do much to further endear him to the Eurosceptics. The Chancellor thinks there could be a double boost to the public finances if the PM’s Chequers compromise plan works out: he can use ‘buffer’ money set aside for a ‘no deal’ Brexit and reap the benefit of continued trade with the EU. Some in the European Research Group think the Treasury’s Project Fear past means its figures can’t be trusted, and already predict that the ‘modelling’ of Chequers v no-deal will be more spin than substance. Remainers scoff at the idea of any ‘dividend’ at all.
What Brexiteers also loathe is that Hammond seems to buy into the ‘despite Brexit’ narrative, that the economy’s strong record on jobs, for example, will continue despite the downsides of quitting the EU. They are particularly irritated by his talk of ‘minimising’ the impact of Brexit. Asked if Chequers would leave the economy “worse off”, he told Andrew Marr: “Getting a deal that allows us to continue trading with our European neighbours with low friction at the borders and low friction behind the borders will minimise any negative effect on the UK.”
Proving that stamp collectors are also happy to double up as coin collectors, the Sun today hails victory for its campaign to see Brexit marked with some kind of historic commemoration. There won’t be a Royal Mail stamp, but there will be a special 50p piece, the paper reports. ‘Friendship with all nations’ is expected to be the phrase on its reverse side. Friendship within the Tory Party is another matter altogether. Don’t forget that the DUP and some Brexiteers have flirted with the idea of voting down the Budget or bits of it. Once today’s Red Box theatre is out of the way, the Cabinet has some difficult choices this week on whether to adopt the red lines drawn by Arlene Foster and Jacob Rees-Mogg.
3. MIND: THE GAP
Politicians on all colours have spent recent years pledging to narrow or even end the gap between spending on mental health and other health areas. One big Budget announcement trailed overnight is that NHS mental health services will receive a £2-billion-a-year real terms funding boost by 2023, providing 24/7 mental health support in every major A&E department, as well as more specialist mental health ambulances. This is not on top of the annual extra £20bn already pledged for the whole NHS, but part of it.
Labour is already urging a ringfence around the cash to ensure it doesn’t leak elsewhere. The IPPR think tank says that the money pledged is half of what is needed, warning an additional £4.1bn on mental health is needed to deliver treatment rates equivalent to those available for comparable physical health conditions. “Half way there is better than nowhere at all. But there is still a long way to go to close the gap between the government’s rhetoric and reality on mental health,” it says.
Meanwhile, the BBC has some new Freedom of Information request data showing that the number of students seeking mental health support while studying at university has increased by more than 50% in five years. Universities say their funding of mental health support has gone up by 43%, but as HuffPost has been reporting of late, there is a real lottery in the state of provision across the country.
4. FAR RIGHT TURN
The election of far-right candidate Jair Bolsonaro as Brazil’s new President shows once again what can happen if ‘established’ political parties fail to connect with the public. Bolsonaro’s repellent views, and even his admiration for military dictatorship, were less scary to many voters than the prospect of what they feared would be a ‘gangster’ state run by the left-wing Workers’ Party. But it’s worth remembering (as our colleagues at HuffPost Brazil point out) that the centre-right parties in Brazil are also to blame for Bolsonaro’s rise, with their own corruption scandals ensuring he got into the final run-off. His reputation as a ‘clean’ politician, as much as his message on fighting crime and boosting the economy, appears to have been the key factor. Read our backgrounder on how he did it.
5. FRACKED OFF
It’ll be interesting to see whether the Chancellor has any extra Budget help for the UK’s fledgling fracking industry today. But opposition within Tory ranks is growing. There are an estimated 200 parliamentary seats where fracking could occur, 93 of which are held by Conservatives. At the party conference North East Derbyshire MP Lee Rowley, a former gas analyst, warned the new practice could cost key seats. Trial fracking near Blackpool recently led to two mini-earthquakes. Today, Richmond Park MP Zac Goldsmith tells the Guardian it is “an issue that has the potential to turn whole regions against the government”. Further clues to a Tory rebellion on planning changes could come on Wednesday in a Westminster Hall debate.
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