ANALYSIS: NHS the big winner as Philip Hammond tries to spike Labour's guns

Posted On: 
29th October 2018

Forget the opinion polls, Philip Hammond still believes Jeremy Corbyn is poised for power.

Philip Hammond is flanked by Treasury ministers outside 11 Downing Street.
Credit: 
PA Images

Despite a full-scale civil war over Brexit, and weekly briefings that Theresa May is just days away from a leadership challenge, the Conservatives are still, somehow, ahead of Labour.

The Tory poll leads are small, but they are consistent. Whatever Jeremy Corbyn is selling, most voters are still reluctant to buy.

Jeremy Corbyn slams 'broken promise Budget' over Tory austerity claims

Philip Hammond's Budget 2018: READ IN FULL

AT A GLANCE: All the big announcements in Budget 2018

But with today's Budget, the Chancellor of the Exchequer was taking no chances.

Spreadsheet Phil, the fiscal hawk with the eye on the bottom line, has been replaced by Spendthrift Phil, chucking money around like a drunken sailor on shore leave. Except the extra cash has been very carefully targeted to appeal to those voters who could be enticed by the Labour leader's promise to go on a massive spending spree of his own.

According to the red book - the 100-page Treasury tome containing all the numbers which have been crunched by the Chancellor - the Government plans to spend an extra £100bn over the next five years. Of that, £84bn is earmarked for the NHS, traditionally the biggest weapon in Labour's electoral armoury.

To put it another way, most other Whitehall departments will see their budgets rise by no more than inflation in order that the health service does not go without. That is a fairly bold move by a Tory Chancellor at any time, particularly so when the next election is still four years away.

Other Labour-friendly measures announced by Hammond included the abolition of the Private Finance Initiative, a scheme which John McDonnell already had in his sights, and £2.7bn for Universal Credit, a measure which the Resolution Foundation think tank said would be worth an extra £630 a year to claimants. Freezing the duty on beer, spirits and petrol won't hurt either.

Inevitably, Labour dismissed the Budget as a con and insisted the Chancellor had broken Theresa May's promise to end austerity. But with so much extra cash kicking around all of a sudden, it has to be doubtful whether that charge will stick.

Of course, Hammond's plans could yet be thrown off course by the UK's imminent departure from the EU. Despite the Treasury's insistence that there's enough in a rainy day fund to cover for any hit to the economy from a no-deal Brexit - something the Chancellor seemed strangely reluctant to say yesterday - the Office for Budget Responsibility warned that such a scenario "could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances".

Tonight, however, the Chancellor will be reasonably satisfied at how his unexpectedly-generous Budget has landed. The next set of opinion polls will tell us exactly what he's got in return for that £100bn.