The first fiscal event of the new May Government, the Autumn Statement, will be an opportunity for new Chancellor of the Exchequer, Phillip Hammond, to set out the direction of Britain’s economy.
Recognised as a cautious, fact-driven legislator, ‘spreadsheet Phil’ – as he has been dubbed by some of the kinder newspapers – is considered to have an astute financial eye, as well as a steady temperament demonstrated in his previous roles as Secretary of State for Defence and Foreign Secretary. However, his dislike of showmanship has led to rumours that this could be his first and last Autumn Statement, with suggestions he views the biannual grandstanding process as ‘gimmicky’.
The greatest challenge to his success as Chancellor is, of course, Brexit, a fact he is absolutely attuned to. “Britain did not vote…to become poorer”, he stressed in his conference speech. Understood to indicate a leaning towards some form of access to, if not membership in, the Single Market, he has found himself developing opposition from hard-line leavers.
This determination to reassess the economy, rather than go about ‘business as usual’ has reportedly resulted in clashes within the Cabinet, as Brexiteers Fox, Johnson and Davis have allegedly been at loggerheads with Hammond and BEIS Secretary of State, Greg Clark. Leaked Treasury documents predicting a loss to the economy of up to 9.5% should all Single Market access be revoked are widely believed to have been released with Hammond’s approval to highlight the precarious financial situation.
In the face of a new economic outlook, he has declared a desire to ‘reset’ the British economy in preparation for its new challenges. Stepping away from Osborne’s commitment to eradicating the deficit by 2020 is a key marker of this. Although the rationale behind it could be either a desire to move away from the ‘austerity politics’ that defined the previous Government, or simply to manage expectations of a brave new world of trade beyond the EU. Certainly, the outlook is not as bright as the Osborne years, as it was reported last month, the deficit rose to £10.6bn in September, standing £2.5bn above expectation, and meant the figure was 14% higher than the previous year.
Beyond the small insights into one of the most closed leading politicians of the modern age, speculation as to the contents of the Autumn Statement are rife, and we will have a better understanding of Hammond the man, and post-Brexit Britain, after 23 November.
Full briefing here.