Yesterday’s big event at Conference was Philip Hammond. Though, if you watched his speech, you’d be forgiven for not quite realising it. Hammond is not known for his oratory or his rabble-rousing charisma, but even by his standards yesterday’s speech was dull. He even warned people mid-way though not to “switch off” as he began a worthy but lengthy passage on the productivity gap.
The most interesting thing about Hammond yesterday (apart from what he actually said, which we will come on to) was that he revealed how completely different his Treasury will behave compared to under his predecessor. When he was Chancellor, George Osborne strayed into any policy territory he wanted; if he could make an announcement that would generate a headline, he would. If he could pull off a cleverly timed policy trick, he would. And he’d do it all while sticking to a mantra of fiscal austerity that had more to do with selling a consistent political narrative than with good economics.
But it seems that Hammond is determined to be different. Firstly, he has abandoned the previous Government’s 2020 deficit target and put the country on a new path of (modest) spending for growth. Apart from some (largely already committed) funds for housebuilding and tech firms, he didn’t give out all that many prizes preferring to wait instead until the forthcoming Autumn Statement. And he offered a frank and sombre assessment of the road ahead as Britain leaves the EU: it will be turbulent, unpredictable and possibly challenging for business. A striking contrast to Boris Johnson and Liam Fox’s rather more upbeat assessments in their Conference speeches this week.
But in truth, we have much still to learn about Hammond’s strategy for managing the economy and much still to learn about his fiscal approach. He claimed new ground at Conference yesterday. We will have to wait until November to see what he will do with it.