Here are the two words that matter most in today’s Spring Statement: “balanced approach”. Those words appear five times in the official text of Phillip Hammond’s speech, and I suspect we’ll hear them again through the course of this year and beyond. Here they are in context:
“We will continue to deliver a balanced approach. Balancing debt reduction against the need for investment in Britain’s future. Support to hard-working families through lower taxes. And our commitment to our public services.”
In terms of macroeconomics, this is a possible signal that in the Budget in the autumn, Hammond will finally yield to arguments that have been made in No 10 and elsewhere in Government to target a primary surplus not an absolute one, or perhaps aim for a point somewhere in between. Doing so would presumably allow the Conservatives to formally declare an “end to austerity” well before a 2022 general election – even if the real-world economic experience of many people, especially on low-incomes might point in another direction.
It would also, in a political sense, bring the party full circle, completing a loop that began more than a decade ago with a man called George Osborne. For those who don’t remember, Osborne used to be some sort of big cheese in Tory economic circles. Back in the middle of the previous decade, he became shadow chancellor and set out an economic approach he captured in the phrase “sharing the proceeds of growth”. By that, he meant a Tory government would divide any fiscal slack it had between spending more on frontline public services, reducing some taxes, and reducing government borrowing. Here’s an example of his
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