New faces, old prioritiesby Soumaya Keynes / December 12, 2016 / Leave a comment
Published in January 2017 issue of Prospect Magazine
Five months ago, Britain’s government got a facelift. Out went old Etonian David Cameron and showman George Osborne; in came sometime grammar-school girl Theresa May and “Spreadsheet Phil” Hammond.
The rhetoric changed with the personnel, but in a rather baffling manner—“hard-working families” fell from fashion, and the “just about managing” or “JAMs” emerged as priority number one. You’d need a very good dictionary to distinguish those two phrases, but November’s Autumn Statement provided a first chance to establish whether we’ve got a new government in terms of decisions, rather than spin.
Fiscal events unfold in two acts. In the first, the chancellor delivers new economic forecasts, usually peppered with favourable comparisons to other countries (better than awful is better than nothing). In the second, he reveals how he will shape the public finances in this changing economy. Since March, we’ve had the Brexit vote and further lacklustre productivity growth, which led to a £26bn drop in the guesstimated size of the UK economy in 2020-21. Under the Osborne regime, with its tight borrowing targets, this grim news would probably have translated into an extra dollop of austerity.
Hammond did try to differentiate himself. In a performance worthy of someone nicknamed after an accounting tool, he embraced boring. He neither doubled down on austerity, nor went for a stimulus. He kicked Osborne’s habit of tabloid-friendly handouts, joking that he was less adept at pulling rabbits from hats. This left him with less need than Osborne to bury nasty surprises in the smallprint: fewer rabb…