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| What awaits Britain under a new Chancellor? Photograph: Pound Coins from Pixabay (License) (Cropped) |
Under previous Chancellors Gordon Brown and George Osborne, the Autumn Statement became virtually a second budget, a second for the Government to manage and tweak the country's finances. Osborne in particular liked to tinker at every opportunity, adjusting targets again and again, an announcing new surprise policies to keep political opponents off balance.
The new Chancellor, Philip Hammond, as befits his reputation as 'dull', has suggested he'd like the Autumn event to go back to being just a rudimentary update, rather than a full blown budget adjustment. And considering the economic situation, that might not be a terrible idea.
An economy runs principally on the basis of confidence and Hammond has everyone to reassure: Brexiters and 48ers; the banks; businesses big and small, and workers. Whatever advantage Osborne's constant surprises afforded him in the political arena, would only have been yet another element of volatility in an already volatile time.
As well as provide assurance of a steady hand, Hammond must also find a way to satisfy his party's extreme right-wing - while, for sake of the appearance of competence, avoiding the complete repudiation of the actions of the previous Conservative ministry. That means maintaining at least token continuity with his predecessor's insistence upon tackling the deficit at the expense of front line services.
If those matters weren't hard enough to juggle, Hammond must also find a way to meet the new commitments made by the new Prime Minister Theresa May. That means, at the least, finding some way to slow down austerity just enough to help those who are 'just getting by'.
In times of high drama, a period of calm, anchored in fiscal stability and dullness, with no unpredictable moves and longer term planning - that actually sticks to a long term economic plan - would usually be a thing very welcome, for any economy. If that is what Hammond brings, it signals, hopefully, a return to managing fiscal matters with a long term view, rather than with short term grandstanding better fitting a corporate boardroom.
However, the new Chancellor doesn't have the luxury of simply postponing a little of austerity programme and holding station. To that effect, Hammond has already deprioritised his predecessor's constantly shifting deficit targets and proposed a small increase in spending to a improve some roads, with May herself adding today the promise of a little more research and development funding. These steps are clearly an effort to show concerns - that withdrawing too much Government money, too quickly, will only make straightened times leaner - have been acknowledged.
Yet Hammond is rightfully under pressure from the Left to do more. John McDonnell, the Labour Shadow Chancellor, has also called for the undoing of tax breaks for the richest that were delivered by George Osborne, eve as frontline services and local councils were subjected to stringent budget restrictions.
With the money saved from reversing those measures, McDonnell has called for dropping the next round of welfare cuts, planned out by the treasury under Osborne - that will hit hardest precisely those who the Prime Minister lately pledged to protect: those 'just getting by'.
Socially and economically, the times have become hard and uncertain, and disproportionately for the most vulnerable - for women, minorities, people with disabilities and the working poor. And each of these groups are exposed to a range of risks, pressures and dangers by declining prosperity and rising desperation, as people turn inwards and shield themselves with hostility towards those who should be their neighbours.
While stability for the Conservatives may stop at settling down jittery markets, progressives want the Government to look further afield: to help calm the fears of ordinary people. Hammond's promises of infrastructure spending and pausing austerity are a start. Yet McDonnell isn't wrong to question the record of the Tories on delivery - Osborne made bigger promises of infrastructure spending, that might have helped stimulate the economy if they had ever seen the light of day.
For progressives, the time is long overdue for a budget with more spending commitments: on research and investment, to help stimulate the economy, creating jobs in the immediate present and to lay the foundation for more down the line; on the critical shortfalls in the NHS and social care budgets; on ending, and even reversing, cuts to welfare, to help people during hard times; and on building many desperately need homes.
All of those commitments are expensive and neither debt nor deficit can be completely ignored. But the present status quo simply is not stable. Worrying about public debts, themselves fairly stable, weighing on the future as a tax burden is madness when the poor, just to get by, struggle under mounting insecure private debts.
And the Government, on the public behalf, is in the strongest position to help. Even just reversing tax cuts and subsidies for rich corporations and individuals - before you even get to the matter of how cheap interest is on Government borrowing - would go a long way to paying for what's needed.
Stability and reassurance are needed. But the Government must act first to create stability, because right now there is desperation and precariousness bordering on disaster. Progressives have to believe that Hammond can and should do more, before he can declare the ship steady, the waters calm and a course plotted for the harsh waters awaiting Britain outside of the European Union.
References
'Theresa May vows to be 'one nation' prime minister'; on the BBC; 17 July 2016.
Rob Merrick's 'Austerity must be ended not postponed, Labour will tell the Chancellor: Shadow Chancellor John McDonnell will set out three key tests for next week's Autumn Statement - including that Philip Hammond 'end the giveaways to the few''; in The Independent; 15 November 2016.
Nicholas Watt's 'Chancellor Philip Hammond 'still aspires for surplus'; on the BBC; 17 November 2016.
John Rentoul's 'This week we find out what kind of Chancellor Philip Hammond really is: Abandoning the target of balancing the Government's books in 2020 is one thing - losing control of public borrowing altogether is quite another'; in The Independent; 19 November 2016.
'Theresa May aiming to put post-Brexit UK at 'cutting-edge''; on the BBC; 21 November 2016.
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