It was a remarkable week for the Government. Remarkable, in that it managed to get through not one but two potential political disasters relatively unscathed. The Chancellor presented a Budget that mostly united a fractious Conservative party, while an eleventh hour compromise helped Theresa May avoid an embarrassing defeat on the EU Withdrawal Bill. The question is, is any of this enough to right the course or is it just a sticking plaster over much deeper problems? Problems avoided this week look likely to come back to haunt the Government – and perhaps sooner than May or Hammond expect.
The atmosphere for Philip Hammond’s Budget speech on Wednesday was more reminiscent of the father of the bride’s speech at a wedding than a piece of political theatre. His supporters were willing him to do well, everyone was slightly worried he might crack under the strain, but the Chancellor somehow managed to get through with a combination of bad jokes and good intentions. Despite declaring it would be a “balanced” budget, Hammond managed to find billions of pounds in new spending. That included a headline grabbing cut to stamp duty for first time buyers, new money for the NHS and business-friendly tax changes. It was enough to dampen some of the criticism aimed at the Chancellor, and Tory backbenchers gave him a positive, if not rapturous, reception at that evening’s meeting of the 1922 Committee.
Except of course, terrible gags about Jeremy Clarkson and cough sweets weren’t enough to hide an increasingly dire economic outlook. Growth is down, investment is down and productivity remains stubbornly low. For most people, that means Hammond’s giveaway budget barely felt like one. It might have given the Chancellor some political breathing room, but it’s hard to escape the feeling that he’s kicked a lot of cans slightly further down the road. The extra money for the health service was less than it had asked for, and NHS England is likely to introduce new care rationing as a result. Despite a good write-up in the press, the OBR was scathing about the stamp duty change and warned it would push house prices up even further. Wage levels are also not likely to return to pre-crisis levels until 2025. Once the media circus moves on, the Chancellor might find the public aren’t as grateful for his giveaways as he hoped.
They say that the real test of a Budget’s success isn’t how it goes down on day one but whether it survives the Sunday media round. Fortunately for Hammond, Theresa May might be about to do him a favour and bury the Budget story entirely. She’s off to Brussels for (yet another) set of showdown talks with the EU27 over the divorce bill. The talk is that she has more money to offer – if the EU is willing to start trade talks. The Irish Government still isn’t happy about progress over the Northern Irish border though. May’s suitcase full of cash might not be enough to buy off the Taoiseach.
It’s not just Brussels and Dublin that have been causing May a Brexit headache. Rebellious backbenchers, still led by former Attorney General Dominic Grieve, managed to extract another concession from the Government this week. This time, the Government agreed to review its decision to back away from the EU Charter of Fundamental Rights after Brexit. The Whips Office had little choice in the matter – the rebels were pretty certain they would have won had the issue been put to a vote. May might have avoided an embarrassing Commons defeat this week, but the cross-party anti-Brexit Awkward Squad have scented blood. Newly empowered, expect to see them demand even more from the Government before the Committee Stage of the once-Great Repeal Bill ends at Christmas. The Prime Minister managed to avoid a disaster this week, but there are still 70 more weeks to go until Brexit. How many more disasters can she avoid?