Chancellor’s challenge

Philip Hammond in Downing StreetImage copyright Getty Images

The chancellor is known by some around Westminster as “box office Phil”, an ironic nickname for a politician who favours caution and prudence over showmanship and headline-grabbing pyrotechnics. So this should be Philip Hammond’s sort of Budget.

The government is sticking with its aim of plugging the deficit and balancing the books. Although borrowing has fallen to its lowest level in a decade, the expected slowdown in productivity growth is likely to push future borrowing numbers back up, shrinking Mr Hammond’s room to spend.

Add in the economic uncertainty around Brexit, and Mr Hammond might be tempted to play safe and avoid any drama.

There are political reasons for caution too. The Tories have a precarious working majority in the Commons with the help of the DUP, which means any remotely controversial votes on tax rises or spending cuts could easily be lost.

Mr Hammond has already been burned from fumbling a Budget measure, when he had to scrap plans to raise National Insurance contributions for the self-employed within a week of announcing the policy in March.

Political chess

The chancellor does not revel in the political chess games enjoyed by his predecessor, George Osborne, who delighted in trying to outfox his opponents with a mischievous surprise. Not always successfully.

Philip Hammond definitely does not need his own “omnishambles” Budget this week, and nor does the government.

Badly wounded by the botched general election in June, hit by the departure of two cabinet ministers in a month, divided on Brexit, for the Tories this is a Budget that must not backfire.

Ironically, it was June’s election that kept Philip Hammond in his job.

Image copyright Getty Images
Image caption There has been evidence of real tensions between the prime minister and her chancellor

Hardly allowed out in public during the campaign, he was widely expected to be chopped after the expected victory – an impression Theresa May did nothing to dispel at a joint press conference with her chancellor in May.

Tensions between Number 10 and Number 11 were clear and the source of the agro was of course Brexit. A supporter of Remain during the referendum, Mr Hammond has found himself battling the Brexiteers in the cabinet.

‘Brexit negativity’

He wants a two-year post-Brexit transition deal agreed with the EU as soon as possible to stop businesses moving out.

He is resisting calls to set aside billions of pounds now for a no-deal scenario. Mr Hammond wants to protect financial services as much as possible.

In October, the former Tory Chancellor Lord Lawson accused Mr Hammond of acting in a way that was “close to sabotage”, because of his Brexit negativity, and urged Theresa May to sack him.

But the prime minister, an Oxford university contemporary of her chancellor, shows no sign of wanting to move him.

Former Chancellors can also be dangerous to a prime minister. Theresa May might recall the resignation speech of Geoffrey Howe in 1990 after he quit as Deputy Prime Minister, following a political career spent at the Treasury and the Foreign Office.

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Media captionWatch extracts of Geoffrey Howe’s 1990 resignation speech, widely considered pivotal in Margaret Thatcher’s downfall

If you haven’t seen it, his quietly deadly resignation speech is worth a few minutes of your time.

So considering the constraints, what are Tory MPs hoping for from Wednesday’s budget?

“Nobody is expecting much,” one veteran of the Conservative back benches told me. While no fan of Philip Hammond, “we don’t want a bloodbath”, they said.

‘Sunnier message’

“We don’t want him to screw it up,” said another senior Tory, who is hoping for a sunnier message from the sometimes doleful Chancellor.

The Tory MP Nigel Evans also says he wants a bit of cheer from Mr Hammond.

“If he comes to the despatch box and starts hand-wringing, and saying, ‘We’ve got no money,’ but at the same time we know they are prepared to up the amount of money they don’t necessarily have to give the EU, then we’ll all think, ‘What the heck’s going on?'”

The consistent view among Leave-supporting Tories is that they want him to sound upbeat about the possibilities of Brexit.

But the chancellor has strong admirers on the Tory benches too, relieved he is in the Treasury’s driving seat while the government argues about the final destination of Brexit.

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Image caption Shadow chancellor John McDonnell has demanded “an emergency Budget for our public services”, which he says are in crisis

The MP for Chelmsford, Vicky Ford, is a fan. “I want a chancellor who’s as boring as anything, but really understands the numbers and the finances. I think Philip Hammond’s been doing an incredibly good, detailed analysis and that’s exactly what we need at this time.”

Tory MPs agree it is a very difficult Budget for Philip Hammond to pitch. It needs to try to prove the government has a purpose other than Brexit, while having very little cash to splash. Maybe the chancellor will surprise us.

The former schoolboy disco entrepreneur turned wealthy businessman took career risks long before he entered politics. But Wednesday will be one of his toughest challenges yet.


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