Batten down the hatches!

Here’s the Budget in four words...

PHILIP Hammond will put a brave face on it. When he rises to deliver his first Budget on Wednesday, he will be a study in cautious optimism. There will be talk of how Britain is well placed to make the most of the Brexit opportunities. Of a workforce that’s retooled for global competition. Of a new ‘white-heat revolution’ in British technology and innovation.

But as he does so, the Chancellor will have his fingers firmly crossed behind his back. Because he knows a storm is coming.

Some people are framing this week’s statement as the first ‘postBrexit budget’. They’re wrong. It’s the final pre-Brexit budget. The last chance for Hammond to get the nation’s economic affairs in order before we take the supreme leap into the unknown.

It is a leap he will make with his eyes firmly open. ‘Some members of the Cabinet think their job is to act as cheerleaders for Brexit,’ says a friend, ‘but Philip isn’t really much of a cheerleader. It’s not his style.’

There will certainly not be any pom-poms on display at the Dispatch Box. The priority is ‘economic resilience’, according to one Treasury official. In other words, this will be a Budget for battening down the economic hatches.

Hammond actually has some room for manoeuvre. Better-thanexpected tax receipts have left him with an additional £12-£13 billion of cash to play with. But he has no intention of splashing it.

‘He’s not going to make the same mistake George Osborne made,’ says a Minister. ‘George spent £25 billion one year, then a year later he had to ask for it all back.’

Hammond’s circumspection is the product of more than his predecessor’s hubris. Within Whitehall there is a growing realisation the pre-Brexit phony war is nearing its end. Ministers have been warned that the boost to manufacturing from the falling pound is about to be offset by higher raw material prices. They are also bracing themselves for the first major round of financial service redundancies and relocations. And as pressure on the NHS and other public services mounts, the Home Office has begun to discreetly divert additional funds to riot-control planning.

Which is not to say the Government’s cupboard is bare. But those goodies that do appear will have been surreptitiously smuggled over from the pantry, rather than pur- chased fresh. ‘We need to live within our means,’ says a Treasury source. Of course this is still a more upbeat picture than was predicted. Many economic forecasters warned a post-Brexit collapse of market and consumer confidence would send Britain careening towards recession. And the first Hammond budget will be nothing like the apocalyptic ‘Emergency Budget’ that represented the Remain campaign’s final, forlorn throw of the dice.

But he will still have to find a way of sounding upbeat, while preparing some potentially unpalatable economic contingency plans. Theresa May’s ‘stronger, fairer, more global Britain’ is a wonderful vision. But Brexit uncertainty, a daunting domestic deficit, accelerating Eurozone inflation, and a diaphanous ‘Trump Bubble’ are what the Chancellor sees when he looks out of his window. These contrasting perspec-

A GREAT British institution is under threat. Since 1990, Prime Minister’s Questions has been beamed live and in full to a grateful and expectant nation. But as the weekly clashes between Theresa May and Jeremy Corbyn continue to produce all the drama and excitement of the test card, broadcasters are beginning to think the unthinkable. ‘It’s something we’re going to have to review,’ one TV producer admitted to me last week. ‘Obviously we’ll continue to cover it when there’s a major issue or crisis going on. But it’s going to be hard to keep justifying complete, uninterrupted coverage. The other week, we cut away to deliver the Helen Bailey murder verdict. I can see us doing that more and more.’ They used to say politics was showbusiness for ugly people. Not any more.

tives have made for some interesting discussions between the Downing Street neighbours in recent weeks. ‘Workmanlike’ is how one Treasury official described preBudget negotiations – usually Whitehall code for ‘they were chucking the china at each other’.

But from all accounts, ‘workmanlike’ is a fair description. Cameron and Osborne was a dual premiership. Blair and Brown were competing premierships. But May and Hammond have rewound the clock, reverting to the classical relationship between Prime Minister and Chancellor. She directs the political strategy, he manages the economics that drive it.

Which doesn’t mean there aren’t tensions. May and Hammond are not personally close, but that’s because neither really has any interest in getting close. Both are relatively dry in terms of their politics and their personalities. ‘To be honest, they’re both two of the dullest people you could ever meet,’ said one Cabinet colleague. Another characterised them as being ‘a bit like an old married couple – they don’t really love each other, but they need each other’.

THEIR biggest differences have arisen mainly from differing interpretations of their respective roles. May sees it as her responsibility to drive Brexit forward. Hammond, wary of the economic implications of driving too hard and fast, keeps tugging on the hand-brake. There is also friction over May’s flirtation with anti-globalisation populism, which Hammond fears could undermine efforts to release a new wave of post-Brexit entrepreneurialism.

But in keeping with the ‘George and Mildred’ style of governance favoured by the PM and her Chancellor, these differences will not be on show this week. Hammond will make all the right noises. He will talk optimistically of building a ‘stronger, fairer, better Britain’. And, as he does so, he will go quietly about the business of boarding up the windows and stocking up on candles and water.

There’s a storm coming. And when it breaks, No11 Downing Street may be the safest place to be.

THE news that Jeremy Corbyn had cancelled last Monday’s scheduled meeting with his backbench MPs sent a rumour swirling round Westminster that he was on the point of resigning. But there was a more mundane explanation. ‘It’s one of his TOIL days,’ a Shadow Minister explained. ‘He was doing the broadcasters over the weekend, trying to explain away the Copeland result. And whenever he does that he takes the next day as time off in lieu.’ Nice work if you can get it.