Some optimism but little of real bounce
Of all the AA Milne characters, Tigger is not one readily associated with Philip Hammond. But the Chancellor was anxious to shrug off his Eeyore nickname and did so with aplomb in the Commons yesterday. His Spring Statement was high on optimism, while resisting the temptation to use better deficit forecasts to boost public spending in pursuit of easy votes. That is being held back for the Budget in the autumn: an improved outlook for the public finances is expected to give the Chancellor room to spend an extra £15 billion. While much of this will doubtless go on the NHS and social care, the defence budget should not be neglected in view of the heightened tensions with Russia.
But for those looking for jam today, the Chancellor had little in the jar. He is still, rightly, wedded to fiscal prudence; but this gives him little opportunity to add substance to his sunnier disposition. Although the Budget has been moved from the spring, the Office for Budget Responsibility publishes its forecasts twice a year. But since Mr Hammond had so little to say in response, it could have been achieved by way of a Commons written answer rather than an oral statement.
What was it intended to achieve? Without a Queen’s Speech this year, there are no set-piece parliamentary occasions for the Government to dictate the political weather until the autumn. Preoccupied with Brexit and hampered by the lack of a majority in the Commons, the domestic agenda is bereft of anything that might change the narrative. Mr Hammond’s statement did little to offset the impression of a legislative void. There was a sense of going through the motions.
Mr Hammond has made a virtue out of pragmatic economic stewardship and it is a sober quality that many Conservatives admire. But when both the Prime Minister and the Chancellor evince a similarly undemonstrative demeanour it can make for dull fare. True, Mr Hammond would struggle to get anything radical through Parliament given the arithmetic; but there are tax reforms that do not need legislation that could have been flagged up for later in the year. In particular, the small businesses whose contribution to the economy he properly extolled could do with more help than is on offer. The Chancellor pointed to what is possible: his stamp duty changes in the Budget have already helped 60,000 first time buyers onto the housing ladder. More tax incentives like this, especially for the young, are required.
Mr Hammond kept his best lines for an attack on the Labour front-bench, where the shadow chancellor John Mcdonnell portrayed a country that most people would struggle to recognise – one ravaged by poverty, with failing public services and despairing citizens. As Mr Hammond said, they are the real Eeyores.