Budget needs big ideas to see off Mcdonnell

In happier times, backbench MP John Mcdonnell would have unveiled an “alternative budget” in complete obscurity. Now he is shadow chancellor, Labour is ahead in the polls and his ideas, if not to be taken seriously as intelligent proposals, are there to be feared. Laying out the opposition’s stall before next week’s Budget, he has called for pausing welfare reform, a splurge in spending and raising public sector pay.

No wonder he told his party’s conference that Labour was preparing for a possible run on the pound if it took power (although he now insists that such a crash is unlikely). Mr Mcdonnell boasts that business is getting “openness and transparency about what we want to do” – and such is the scale of his proposed spending, so clear is his passion for socialism, that it is enough to make any wealth creator run for the hills.

But what will the electorate think? There is a risk that even if Mr Mcdonnell’s policies are wrong, the very fact that he has a vision for the economy makes him seem like an alternative to the Tories. Brexit raised people’s ambitions and sense of the possible – yet many in the Government still see it not as an opportunity but a risk, and so are tempted to play it safe when it comes to economics. This is a mistake. Some of Britain’s problems are so big that tinkering won’t help, could do harm, and will alienate impatient voters. It was good politics of Mr Mcdonnell to demand an extra 100,000 new social homes a year.

Philip Hammond must not try to outdo Labour’s reckless spending plans or steal its Left-wing solutions. But he has to do far more than the Government currently proposes on housing alone. One genuinely bold, philosophically conservative policy would be to abolish stamp duty altogether, which would help not only first time buyers but current owners to upscale – opening up the housing chain – as well as older owners to downsize, freeing space for growing families. A general approach of cutting taxes across the board, financed by spending restraint, would assist everyone by spurring growth.

Mr Hammond has to apply radical conservative policy not only to power Britain through Brexit but to keep Mr Mcdonnell’s hands off the Budget box. The last election proved that the promise of “strong and stable” is far less attractive than a plan to raise the standard of living – and that is what the Chancellor has to deliver next week.