Don’t let No Deal wipe out this £15bn bonus

AMID the smoke, mirrors and doublespeak of Brexit, a rare and precious thing emerged this week – an undisputed, unvarnished piece of good news.

Just days before delivering his Spring Statement on the nation’s financial health, Chancellor Philip Hammond received a remarkable windfall from Britain’s hardworking taxpayers.

Our budget surplus (net tax revenue after public spending is subtracted) was a truly stunning £14.9 billion in January – the highest monthly figure ever recorded.

The unexpected cash mountain is the product of record employment, steady (if not spectacular) economic growth, and a successful crackdown on tax avoidance. It has, however, come at a price. Though tax-free allowances have rightly been increased to help the lower-paid, the overall tax burden is at its highest for half a century, largely because of the austerity policies made necessary by the 2008 crash.

The Chancellor would do well to remember that this money didn’t come easily. It represents the hard graft of millions of workers. So what should be done with it? Mr Hammond has suggested it could be spent on public services, many of which have seen deep cuts since 2010.

One he will look at in particular is policing. We are in the grip of a chilling knife crime epidemic, which is spreading from our major cities to the suburbs and smaller towns.

While there are many reasons – skewed police priorities, ‘soft’ justice in our courts, a steep decline in stop-and- search – the public is crying out for more officers on the streets. An injection of serious money would certainly help that process. But Mr Hammond should be wary of lavishing all this new cash on the state.

There is a powerful moral argument that the bulk of it should go back to those who earned it, in the form of tax breaks.

A further raising of income tax allowances, increasing the upper thresholds, or perhaps some support for families by offering significant transferable allowances between married or cohabiting couples.

He should also consider helping savers, who have been sorely disadvantaged by historic low interest rates, and a cut in business rates to boost beleaguered small traders in our ailing high streets.

But however Mr Hammond decides to slice the cake, one thing is certain. If Westminster doesn’t finalise a Brexit deal, there will be nothing left but crumbs.

This hard- earned windfall, and much more besides, would be wiped out at a stroke by a No Deal outcome. Business knows it, the public knows it and the Prime Minister knows it.

We can only pray that the message is finally getting through to our fractious, bull-headed political class. The Commons vote next week may be their last chance. Or as Mr Hammond likes to put it, their High Noon.