The Spectator

Hammond’s House of Horrors

What is the point of Philip Hammond? Most chancellors have an agenda, but it’s hard to discern any purpose or direction from the current one. Gordon Brown’s project was to oversee the largest expansion of government spending in peacetime history — which he achieved, albeit with ruinous results. George Osborne spoke about trying to wind this programme back. The results were decidedly mixed, but at least he had an idea about what he sought to achieve. Mr Hammond, by contrast, has spent his time in the brace position preparing for Brexit.

When he delivers his Budget on Monday, he might have to admit that the country does not seem to be quite so worried. Companies have been hiring at a rate never seen before. Youth unemployment is at an all-time low. Salaries are (finally) rising faster than inflation. The Office for Budget Responsibility, which has been almost as gloomy as Mr Hammond in its outlook, will have to admit that it has yet again got it wrong and that the public finances are in healthier shape than it has assumed. Income inequality is near a 30-year low, and corporation tax receipts are churning in at a rate that has astonished the Treasury.

So it’s time for some innovation, some policies that might speed the recovery along. Instead Mr Hammond — we are told — will follow Mrs May’s lead and declare that austerity is over. He will celebrate this by resuming the Brown project: expanding government spending, increasing the national debt and lifting the tax burden (already at a 30-year high) even higher. It’s a very strange form of conservatism.

For a while, of course, a government can get away with increasing spending without raising taxes — it simply borrows more.

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