Tory Budget overshadowed by Brexit and bad news

Uncertainty over the UK’S departure from the EU and poor growth forecasts are fuelling a growing sense of unease about the state of the British economy

So ‘Spreadsheet’ Phil can crack a decent joke, throw in a few headline-grabbing, populist policies and even cheekily pinch some of Jeremy Corbyn’s oftderided clothes.

But, hardly noticed in the corner of the House of Commons, lurked an elephant – maybe more of a mammoth – that cast a shadow over the proceedings. And that giant creature’s name was Brexit.

In his Autumn Budget statement, Mr Hammond barely mentioned the approach of the biggest challenge our economy will have ever faced in peacetime, now just 16 months away.

But then, perhaps there wasn’t really all that much that could be said, given negotiations with the European Union have barely moved on since this country voted to leave the EU some 17 months ago.

After announcing a £3 billion fund to help prepare for our departure – adding the ominous caveat that he would “allocate further sums if and when needed” – Mr Hammond blithely declared this budget was “about much more than Brexit” and didn’t mention the subject again.

But there was to be no hiding the mounting sense of unease about the UK economy. Mr Hammond introduced the bad news by saying he would now use some “long, economicky words”. It sounded a bit like he hoped we’d stop listening at this point – and with good reason.

For the Office for Budget Responsibility had downgraded its forecast for economic growth from 2 to 1.5 per cent this year with further downward revisions for the following years and a low of 1.3 per cent in 2019. To put that in context, these were the weakest growth estimates produced by the Treasury or OBR in 34 years. The government’s independent experts are starting to get the jitters and one reason is the uncertainty over how the UK will leave the EU, coupled with the growing prospect of a chaotic “no deal” exit.

Apart from a joke about “Hammond and May” disappointing Jeremy Clarkson on driverless cars, the Chancellor sought to draw attention away from all this with the announcement of significant funds designed to tackle the housing crisis, particularly in London. He pledged the government would ensure the construction of 300,000 new homes every year and there was a Corbynlike threat to use compulsory purchase orders to buy land for housebuilding from private owners.

He also announced the abolition of stamp duty for first-time buyers of homes costing up to £300,000, a measure that will also benefit those fortunate enough to be in a position to buy a £500,000 house.

Like a number of other announcements, the stamp duty move will only apply in Scotland if Holyrood decides to adopt it, presumably with lower thresholds. The Scottish Government should not keep people waiting for its decision. After listening to Mr Hammond, who said Scotland would receive an extra £2bn as a result of the budget, many might think Nicola Sturgeon is now flush with cash. However Chancellors are well known for taking a smoke-andmirrors approach to the figures and the First Minister quickly took to Twitter to claim the changes would still mean a “real terms” cut of £239 million. Perhaps we could ask the OBR could intervene.

It’s the kind of confusion that dominated the EU referendum campaign. But it will not be possible to use smoke and mirrors to conceal the very real effects of Brexit when it happens. The government needs to strike a deal with the EU, and soon, in order to give itself the time to draw up a sensible plan.