For most people being Foreign Secretary would be a great job, but Philip Hammond never looked like he particularly relished that role. What he has always wanted to be is Chancellor and today in his first major parliamentary event in the role he crisply set out what he thinks is wrong with the UK economy. He said that to make a success of Brexit, Britain would have to deal with its productivity gap, the housing challenge and address the regional imbalances in the economy.
Cabinet colleagues say that Hammond talks more passionately about productivity than any other subject. Judging by today, he views investment in economically productive infrastructure as the key to dealing with the problem. He announced a £23 billion national infrastructure fund, paid for by extra borrowing, to fund infrastructure improvements in the next five years. He also committed the Tories to substantially higher infrastructure spending throughout the next parliament, which is the first big Tory commitment of the 2020 campaign. Hammond, the least political Chancellor in a generation, has the discipline to make sure that this money is spent on the most economically productive, rather than politically useful, projects.
The Chancellor used his own reputation for dryness, bordering on dullness, to good effect today. His non-flashy nature meant that this extra borrowing is not seen as reckless. Hammond is also confident enough in his credibility to announce a new fiscal rule that sets no firm date for when the Budget will be in surplus. We shall have to see whether the markets are as relaxed about this as Westminster is.
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