Sometimes in life the biggest risk you can take is to play it safe. This is the predicament of Philip Hammond as he approaches the Budget next month. If he adopts a safety-first approach, it will almost certainly go wrong and he’ll be forced into a credibility-draining U-turn, as he was in March. His best hope is to be bold, and to hope this generates enough momentum to carry him over any bumps in the road.
The two longest-serving chancellors of recent times have relished the theatrics of Budget Day. Both Gordon Brown and George Osborne loved pulling a rabbit out of the hat at the last minute, wrongfooting the opposition and grabbing the headlines. Hammond isn’t like that. He is more cautious and technocratic, with remarkably little interest in political strategy for so senior a politician.
But for him to adopt a cautious approach to this Budget would be a mistake. First of all, he needs to find money for several politically difficult items. He must plug the gap created by his abandoned National Insurance increase for the self-employed, find a way to pay for the tuition-fees freeze announced at Tory conference — and, crucially, honour the financial commitments that Theresa May made to grease the wheels of her agreement with the Democratic Unionist Party after she lost her majority at the election. And he has do all this against projections for the public finances that will look worse than previously expected because of the Office for Budget Responsibility’s expected downgrade to productivity growth.
This would be a difficult hand for any chancellor to play. But Hammond is painfully short of support. He hasn’t set about building the kind of solid Treasury operation that both Osborne and Brown constructed. Admittedly, they both did this because they wanted to move next door, whereas Hammond is one of the few Tories who is not planning a leadership bid.