Should The Chancellor Have A Spring In His Step?

Mr Hammond would be right to be pleased with his first proper outing. There wasn't much showboating, and there weren't as many gimmicks as we had become used to under Mr Osborne (pasty tax anyone?), he was playing it safe this Spring. The autumn might dampen his spirits though.
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This week Philip Hammond had his first and last Spring Budget (he used the Autumn Statement last year to move future budgets to the Autumn, and statements to the Spring - yes I was confused too).

As it was his first, and the first of course that Theresa May's government has produced, much has been made of this Budget. What will it say about the new social conservatism of 'Mayism'? What direction will it set for Brexit Britain? And so on.

So what did it say? Well, in short not a great deal. At little over 60 pages it was one of the shortest Red Books we've ever had (the 2015 one, for example, was over double that). There are good reasons for its brevity. Firstly, given the Chancellor's switcheroo (see above) on the Autumn Statement and Spring Budget, there will be another one this autumn - I think it's fair to assume that he will be keeping much of his powder dry for that set piece. Secondly, we are still members of the European Union, indeed we haven't even activated Article 50 yet. As such, it was always likely that the Chancellor would keep any policy changes tightly focussed on domestic policies that aren't really influenced by our membership of the EU, or too troubled by the legislative wrangling that is about to commence following the 'Great Repeal'.

Therefore, with the above in mind, what hints of things to come can we glean from Mr Hammond's big reveal?

The first thing we should note was his confidence. For a man who has a reputation for being a bit of a 'bean counter' and who was called 'Eeyore' by former Chancellor Nigel Lawson, he took to the despatch box with relative gusto. George Osborne, many will remember, cast a rather nervous figure in his early days, often coughing his way through and habitually sipping water.

'Box office Phil' was of course helped by the fact he went into the Chamber on the back of increased growth forecasts up from 1.4% to 2% (a sign of the times we now live in that these are stats worth shouting about). Borrowing also fell. Despite even his own predictions as a Remainer during the Referendum campaign, he was able to say that the economy remains pretty stable (for now).

This week's Budget essentially focussed on social tweaking and tax changes to reflect our changing workforce, and of course a relief fund for those losing out to the Business Rates changes. Directors and their dividends took a hit, and the self-employed can now expect to pay more. This has been described by many commentators as going after members of the 'gig economy' - but that's an over simplification. One of the many revolutionary aspects of the internet and digital connectivity is that it is easier than ever to go into business for yourself. It has therefore become increasingly harder for the Treasury to go after easy to identify companies and their employees - the low hanging fruit has been picked. The Chancellor's National Insurance 'tweaks' are a reaction to the changing make-up of the modern workforce; though he may pay for them given the Conservatives had previously pledged to leave NI alone .

The Chancellor's other nod to the evolving world of work was his financial commitments to education, with a particular focus on technical skills. There was £300m pledged to fund new PHDs for STEM subjects, the creation of new T Levels (A Level equivalents for technical subjects), and a 50% increase in the number of hours of technical education for 16-19 year olds. Of course he also committed £270m to robots and driverless cars, so those technical skills may well come in handy!

His other 'social' focus was on the troubling area of social care. He committed an extra £2bn to social care and an additional £325m to grease the wheels of NHS transformation plans. It is widely known social care services are starting to creak at the seams, and our ageing population is only going to exacerbate the situation.

Thus, given our nation faces a skills problem and an ageing problem, it perhaps makes sense that the Chancellor tried to address both ends of the spectrum. In light of Theresa May's more 'social conservatism' his Budget seems rather on message.

Mr Hammond would be right to be pleased with his first proper outing. There wasn't much showboating, and there weren't as many gimmicks as we had become used to under Mr Osborne (pasty tax anyone?), he was playing it safe this Spring. The autumn might dampen his spirits though.

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