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| Don’t feel sorry for Hammond – this is a budget of great opportunity | |
| (about 2 hours later) | |
| Feeling sorry for Britain’s chancellor of the exchequer is all the rage. Philip Hammond is an unlucky man we’re told, having to prepare next week’s budget with a weakening economy, fears over public finances, and pressure to relaunch a government that’s had a tough autumn. | Feeling sorry for Britain’s chancellor of the exchequer is all the rage. Philip Hammond is an unlucky man we’re told, having to prepare next week’s budget with a weakening economy, fears over public finances, and pressure to relaunch a government that’s had a tough autumn. |
| No one doubts that preparing a budget against this backdrop isn’t hard work. But for both Hammond’s interests and those of the nation it’s time we put the pity aside. Not least because the sense that everything is very difficult risks being turned into a fatalism that nothing can be done – which is a long way from the truth. There is no excuse for a do-nothing budget. | No one doubts that preparing a budget against this backdrop isn’t hard work. But for both Hammond’s interests and those of the nation it’s time we put the pity aside. Not least because the sense that everything is very difficult risks being turned into a fatalism that nothing can be done – which is a long way from the truth. There is no excuse for a do-nothing budget. |
| The reality is that in many ways Hammond is a very lucky man. For a start there is the absolute, but too rarely stated, privilege to serve your country as chancellor. It is a great gig, steering your party and your country through the big economic questions of your time, and doing so with a level of institutional clout from the Treasury that many finance ministers around the world only dream of. And you get all that without the sheer brutal exposure that being prime minister entails. If you can’t do something useful in that position, you probably shouldn’t be in politics in the first place. | The reality is that in many ways Hammond is a very lucky man. For a start there is the absolute, but too rarely stated, privilege to serve your country as chancellor. It is a great gig, steering your party and your country through the big economic questions of your time, and doing so with a level of institutional clout from the Treasury that many finance ministers around the world only dream of. And you get all that without the sheer brutal exposure that being prime minister entails. If you can’t do something useful in that position, you probably shouldn’t be in politics in the first place. |
| And while it may not feel that way to chancellors at the time, they are very lucky to have the institution of the budget. In an era when the decline of deference and the pace of politics means that many politicians feel, often rightly, that they lack the agency to bring real change, the budget is an unparalleled opportunity to build much-needed momentum. Far beyond the Treasury much of Whitehall runs to the rhythm of budget planning and then roll-out. Even more importantly institutions that the government does not directly control – from housing associations to charities, from local government to our biggest firms – pore over the detail of a budget for signs of where the government is taking the country and for a sense of their own place in it. On budget day the chancellor is handed a megaphone – Hammond just needs to make sure he’s got something to say. | And while it may not feel that way to chancellors at the time, they are very lucky to have the institution of the budget. In an era when the decline of deference and the pace of politics means that many politicians feel, often rightly, that they lack the agency to bring real change, the budget is an unparalleled opportunity to build much-needed momentum. Far beyond the Treasury much of Whitehall runs to the rhythm of budget planning and then roll-out. Even more importantly institutions that the government does not directly control – from housing associations to charities, from local government to our biggest firms – pore over the detail of a budget for signs of where the government is taking the country and for a sense of their own place in it. On budget day the chancellor is handed a megaphone – Hammond just needs to make sure he’s got something to say. |
| When it comes to the daunting task of constructing a budget there are also reasons for the chancellor to consider himself lucky. Politics is about knowing what change is needed – and building a consensus for it. Both are hard, but they are much easier when there are problems that become so acute that the need to address them becomes that rare thing – a national consensus. You wouldn’t want to say Gordon Brown was lucky to be prime minister when banks started going bust, but the need to respond to that crisis gave his premiership a sense of purpose and its greatest hour. | When it comes to the daunting task of constructing a budget there are also reasons for the chancellor to consider himself lucky. Politics is about knowing what change is needed – and building a consensus for it. Both are hard, but they are much easier when there are problems that become so acute that the need to address them becomes that rare thing – a national consensus. You wouldn’t want to say Gordon Brown was lucky to be prime minister when banks started going bust, but the need to respond to that crisis gave his premiership a sense of purpose and its greatest hour. |
| For all the divisions over Brexit, there are now the outlines of just such a national consensus building. When did you last actually hear someone defend the levels of inequality we have lived with since the early 1990s? In stark contrast to the world before the financial crisis, the question isn’t whether the gap between rich and poor, or between north and south, is a problem. It is one of what we can do about it. No one is arguing that we don’t need radical change on housing, now they have woken up to the fact that our housing costs have trebled over the past 50 years. Today’s 30-year-olds are only half as likely to own a home as the baby boomers were at the same age – and Tory and Labour voters alike know it. Our national reliance on low-paid work, and our failure to treat those doing it with the respect that citizens owe one another, is a topic of conversation in the boardroom, not just the kitchen. | For all the divisions over Brexit, there are now the outlines of just such a national consensus building. When did you last actually hear someone defend the levels of inequality we have lived with since the early 1990s? In stark contrast to the world before the financial crisis, the question isn’t whether the gap between rich and poor, or between north and south, is a problem. It is one of what we can do about it. No one is arguing that we don’t need radical change on housing, now they have woken up to the fact that our housing costs have trebled over the past 50 years. Today’s 30-year-olds are only half as likely to own a home as the baby boomers were at the same age – and Tory and Labour voters alike know it. Our national reliance on low-paid work, and our failure to treat those doing it with the respect that citizens owe one another, is a topic of conversation in the boardroom, not just the kitchen. |
| None of this is to say that delivering change is easy, but it does mean that for a political leader who understands the mood of the times, there is an agenda out there that would unify rather than divide the country. | None of this is to say that delivering change is easy, but it does mean that for a political leader who understands the mood of the times, there is an agenda out there that would unify rather than divide the country. |
| It is for Hammond to decide whether he stands for or against the consensus for change. If the former is true, a budget that presses “go” on house-building – and “stop” on huge welfare cuts that risk the biggest rise in inequality since the Thatcher era – should be on the cards. | It is for Hammond to decide whether he stands for or against the consensus for change. If the former is true, a budget that presses “go” on house-building – and “stop” on huge welfare cuts that risk the biggest rise in inequality since the Thatcher era – should be on the cards. |
| This kind of budget would celebrate record levels of people in work, but seize the opportunity that a tight labour market provides to take big strides in improving the quality and security of the work they do. And it would leave no one in any doubt that an occupant of Downing Street understood that our failure to prioritise the education of those who do not go to university betrays not only those young people, but the future of our economy and our nation. | This kind of budget would celebrate record levels of people in work, but seize the opportunity that a tight labour market provides to take big strides in improving the quality and security of the work they do. And it would leave no one in any doubt that an occupant of Downing Street understood that our failure to prioritise the education of those who do not go to university betrays not only those young people, but the future of our economy and our nation. |
| So yes, the chancellor is likely to be handed forecasts for slower growth and higher borrowing in the budget. And yes he has to navigate them without a firm majority in the House of Commons. But Hammond isn’t the only one to find the Britain of today is not as he would like it to be – from squeezed pay packets to regional divides of scarring intensity. But the whole point of assuming the privilege, and more importantly the responsibility, of being chancellor isn’t to bemoan the state of the world – but to change it. | So yes, the chancellor is likely to be handed forecasts for slower growth and higher borrowing in the budget. And yes he has to navigate them without a firm majority in the House of Commons. But Hammond isn’t the only one to find the Britain of today is not as he would like it to be – from squeezed pay packets to regional divides of scarring intensity. But the whole point of assuming the privilege, and more importantly the responsibility, of being chancellor isn’t to bemoan the state of the world – but to change it. |
| • Torsten Bell is director of the Resolution Foundation | • Torsten Bell is director of the Resolution Foundation |