ANALYSIS: How Fiscal Phil declared an end to austerity

Posted On: 
22nd November 2017

When the Chancellor's nickname is Fiscal Phil hopes are never high that his Budgets will be something to tell the grandkids about.

Philip Hammond's Budget actually contained some jokes.
Credit: 
Parliament TV

And, by that benchmark, what Philip Hammond delivered in the Commons this afternoon did not disappoint. The odd lame joke aside, it was a fairly dull affair. 

But take a closer look at the numbers and it becomes clear that the man who likes nothing more than curling up in bed with a good spreadsheet (probably) may well have given the last rites to the age of austerity.

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Remarkably, the Chancellor announced that over the next five years, he plans to spend around £25bn more than the Government expects to raise in taxes.

Admittedly, a hefty chunk of that - around £15bn - is being spent over the next two years to make up for an economy which is set to grow even more slowly than experts forecast just eight months ago.

And an extra £3bn is being set aside to prepare for a Brexit which, although Mr Hammond did not want it to happen, is nonetheless unavoidable.

But there were enough crowd-pleasers to put a smile on Tory MPs' faces, and - if the speculation is to be believed - save the Chancellor's job.

The NHS in England will benefit from an additional £2.8bn in day-to-day spending up until 2022/23, with a further £3.5bn being earmarked for capital projects.

Various housing commitments - including the quickly-unravelling stamp duty tax break for first time buyers - eats up another £15bn of new commitments, while around £7bn has also been found to freeze fuel and alcohol duties and help those affected by the introduction of Universal Credit.

Treasury sources insisted that the Chancellor's determination to balance the nation's books by 2025 remains in place - fully 10 years after George Osborne forecast it would be done after the 2010 election.

However, it is difficult to escape the conclusion that we have now entered a new political and economic reality.

Showing a political nous which his Cabinet allies insist he keeps remarkably well hidden, Mr Hammond appears to have realised that voters are growing increasingly weary of seemingly endless spending cuts.

He won't be called Fun-time Phil any time soon. But it's a start.