A spring without a Budget is a bit like one without the Grand National or the Boat Race. It doesn’t feel right. The sight of the Chancellor’s red box, regardless of its contents, has always instilled in me a frisson of elation as one contemplates the warmer, sunnier months ahead. We do, however, have the consolation of a spring statement, which Phillip Hammond will deliver next Tuesday.
What can we expect? Very little, if the briefings are anything to go by. Hammond has let it be known that the occasion will not mirror the autumn statements of the Brown, Darling and Osborne years, which were used as a second opportunity to jack up taxes or come up with a handout. In some years it was the autumn statement, not the Budget, which carried the more significant fiscal changes. Hammond, however, has said that he will not be making changes to tax rates or unveiling more spending – it will be more of a straightforward update on the public finances.
But is he really going to resist the opportunity for a giveaway or two, given that the outlook for economic growth has improved since the Budget in November? It now looks as if the economy grew by 1.8 per cent in 2017 rather than by the gloomy downgraded estimate of 1.5 per cent made just four months ago. That improves the lookout for tax-take, leading to a reduced deficit in the near term and ought to mean the elusive balanced budget occurring a little earlier than previously projected.
A Chancellor with a keener political antennae would surely grasp at the chance to deliver an unexpected dividend, with Boris’ suggestion of a little extra for the NHS – a kind of downpayment on the promised extra £350 million a week which could potentially flow into the health service once we have finally finished paying our dues to the EU. John McDonnell was on the Today programme this morning asking for more for the NHS – why not surprise him?
Trouble is, Hammond is not a very political chancellor. On the contrary, he has previously come up with proposals, in the shape of extra National Insurance Contributions on the self-employed, which seemed calculated to annoy as many of his party’s natural voters as possible. Admittedly, Hammond did not know at the point he delivered last year’s spring budget that there was going to be an election two months’ later – Theresa May had yet to depart on her fateful North Wales walking holiday – but we have learned enough about him to know that he has no desire to be a crowd-pleaser.
Put it 50-50, then, that there will be a modest extra award to the NHS. Just as likely, we will hear him boast for 15 minutes about how the public finances are in slightly better shape than they were last autumn – and then tell us to wait until autumn to enjoy the consequences of this small upward tick in the economy.
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