Between Jam and a Sticky Place

Between Jam and a Sticky Place

This week saw the predictable ‘Jam Tomorrow’ headlines following Philip Hammonds first (and last) Autumn Statement, but the ‘Just About Managing’s’ will be crucial to the success, or failure, of Theresa May’s government. The JAMs have been the central focus of Mrs May’s direction since her ascension to No. 10, but could they be her downfall? With real-world earnings set to be no higher than they were at the time of the financial crash in 2008, the JAM seems an awfully long way off for many. As a new Government with a focus on low earners, the Autumn Statement saw the minimum wage increase by 30p from April, whilst the tax threshold goes up to £11,500 in 2017, though no faster than planned by George Osborne before the Brexit vote. The action doesn’t seem to match the rhetoric.

However well-intentioned a rise in the tax threshold and minimum wage may be, these measures simply won’t boost incomes enough to cover the rising cost of living, and this is the trap for the Prime Minister. Targeting voters at the lower to middle income scale is well and good, but not if the Government can’t find tangible policies that will have a demonstrable effect on these groups. Expectation management is crucial here. And what about a General Election? Most commentators are expecting the PM to call an election sooner rather than later, and before the cold economic winds really start to blow. How do you choreograph this with the two Budgets now set for next year and the triggering of Article 50? Speculation is mounting that the order could be: 1. Article 50; 2. A giveaway budget; 3. General Election. Given the Government has put balancing the books on hold until after 2020, Hammond could be waiting until next year to hit the ‘spend’ button.

These questions and deliberations are being poured over by the Prime Minister and her close advisers. A JAM friendly election in 2017 could help the Prime Minister lead her party into the sunny uplands of a potential three figure majority. Leaving it any longer, creates a vacuum of time in which the Government really has to deliver for those JAMs. Otherwise, the Conservatives could face an Eton Mess.