Since June’s General Election changed the political game, the Government has been running to stand still. Putting Brexit aside, on the domestic front it has felt like Labour is consistently setting the agenda as the Conservatives constantly have to fight on issues that are more natural, and more comfortable, territory for the Opposition.
Today’s Budget was perhaps their best chance yet to regain that political initiative but in parts watching Philip Hammond speak it was hard to escape the sense that he continues to dance to Jeremy Corbyn’s tune. The fear that the Conservatives are in danger of losing a whole generation of voters over the perceived intergenerational unfairness of the housing crisis, tuition fees and stagnant wages is driving so much Conservative thinking at the moment, and you could see it in many of the announcements today. You think train fares are too high? Here’s a cut for younger people. You’re worried austerity has gone too far? Don’t worry, we don’t talk about that any more. You can’t get on the housing ladder? We’ll reduce the Stamp Duty on that.
As predicted, measures on the housing crisis took centre stage, and in addition to the abolition of Stamp Duty for most first time buyers we saw a series of initiatives, funds and plans to try and tackle it, as well as yet more threats to big housebuilders about the consequences if they fail to build out planning consents. But today’s Budget lacked, on housing and across the board, the sort of big unifying idea that will shake the public out of their existing perceptions. In policy area after policy area, it was a small spending rise here and a tweaked tax change there. A small change to the Universal Credit payments process will assuage some, for example, but will hardly fundamentally alter the balance of people’s opinion on the UC overall. Even on housing there were lots of small ideas to tackle what is generally agreed to be a big problem.
Moreover, whilst the days when Budget purdah was strictly observed and the Chancellor had to resign if anything came out beforehand are long gone, but there can seldom have been a Budget day when so much of the central thrust was widely and publicly discussed beforehand as that we saw today. And therein perhaps lies another big problem. So much of it felt old hat. We have heard talk before of their measures to tackle the housing crisis, boost productivity and grow wages. And the more they talk without delivering, the less credible each fresh wave of similar promises becomes.
As such, it is hard to see how today’s Budget will really shift the political mood. Indeed, quietly and quickly at the start of the speech, perhaps the most important story of the day was mumbled out. Forecasts for the UK’s productivity and growth for every year of the Parliament were downgraded, and downgraded substantially. Over the course of the next five years, the Chancellor said growth would range from 1.3-1.6%, way below historic trend levels and way below what is needed to induce any sort of feelgood factor amongst the electorate.
So following a decade of wage stagnation, the Government now think we have five more years of sluggish growth ahead. Whilst Treasury forecasts are not always accurate, if that one proves to be true then Theresa May faces an even longer, even harder, slog ahead of her than she has been through in the last five months. Long after today’s announcements are forgotten, the consequences of a lost economic decade turning potentially into a second will be the thing that determines the fate of the Government, and of the country.