The Budget pushed the language of economics left—but tax cuts on housing suggest that the real priorities haven’t changed all that muchby Tom Clark / November 22, 2017 / Leave a comment
Back in 2008, George Osborne reframed the whole way we discuss economics with a series of stern soundbites. As Lehman Brothers toppled, he buried the previous cuddly Cameronian Conservatism that had pledged to match New Labour spending totals, and instead pronounced that “the cupboard is bare” as he vowed to put “sound money” first. It took some chutzpah to blame a banking crisis on “big government,” but that’s what he did. And it worked. The stage for the long years of austerity was set.
Listening to Hammond today, you could hear the language of economics being reframed again, although perhaps not in the way that Spreadsheet Phil would have chosen. “Austerity” was out and “investment” was suddenly in, with plenty of bold talk on housing, upskilling and building hospitals—pretty much exactly the shift in tone that Labour and John McDonnell have been pushing from the opposition benches. But will the new “invest to grow” mood music alter the financial choices the government makes? That is much less clear.
This humbled and minority government has clearly decided that it can no longer afford to fixate on the (admittedly now much smaller) deficit in the way that it once did. Hammond loosened the purse strings by nearly £10bn in 2018/19, equivalent to cutting 2p off the basic rate of tax. But the score card in the Budget book suggests that the political priorities have not changed all that much.