We need to have a confident Chancellor

What a difference a year makes. Last March, Chancellor George Osborne presented his Budget to the Commons with a grim warning about the “disruptive uncertainty” that would grip the UK economy if voters had the temerity to vote to leave the European Union. No less an authority than the Office for Budget Responsibility, Mr Osborne said, had concluded that Brexit “could have negative implications for activity via business and consumer confidence, and might result in greater volatility in asset and financial markets”.

Today, Philip Hammond presents his Budget knowing Mr Osborne’s threats were empty. Since the vote to leave, the economy has, if anything, performed better than before the referendum. Economists have queued up to present revised predictions, admitting that they were too gloomy. The latest revision came yesterday from the Organisation for Economic Co-operation and Development. Britain’s prospects are good.

Mr Hammond would do well to reflect on the forecasters’ change of heart, not least since healthy growth relies on the confidence of households and businesses to go on spending and investing. His Budget should be upbeat in tone, a clean break with Mr Osborne’s cynical pessimism.

In content, we hope that Mr Hammond will remember that many of the hard-working and responsible voters who have traditionally backed the Conservative Party will soon feel the painful impact of some of Mr Osborne’s misguided policies. From next month, tax relief on the mortgage costs of buy-to-let investors will fall, a bitter blow given that many of those investors saving for retirement having been driven out of more conventional pension investments by Mr Osborne’s tax raids. That is neither fair nor sensible: a wise government encourages thrift. It is right that Mr Hammond takes a responsible approach to the public finances; the ruinous profligacy of the last Labour government must never be repeated. But the Chancellor should remember that the best way to bring money into the Exchequer is to lower tax rates and encourage business, investment and consumption, all of which create more wealth.

In economics and politics, confidence matters. Britain and its people have a lot to be confident about. The Chancellor should use his Budget to say so.