Philip Hammond, in a way, had an easy job at Conservative Party Conference – take to the stage, set out the financial agenda for the Conservative Party in the next twelve months and make it more digestible than John McDonnell’s proposals last week. His speech on Monday in Birmingham was impassioned and for Philip Hammond, was one of his more agile and out-going performances, encouraging members to “hold steadfast” to their Conservative principles and “avoid populist socialist pitfalls”.
Of course, this means that austerity is still high on Hammond’s fiscal agenda. Spending is going to remain steady and the Conservatives plan on keeping the budgets tight to meet the demands on the economy as the UK prepares to leave the European Union. Hammond’s headline message to members, was to stay strong and resolute on the party’s economic principles that would guide the economy through the tough years to come.
Hammond was explicit in reassuring businesses in saying, we are the “party of business”. He has often clashed with the Prime Minister’s more interventionist approach to corporates, but this statement will no doubt have come on the back of Labour’s announcements last week. Indeed, Hammond’s steady hand in dismissing Boris on the eve of his speech will have reassured business leaders that he is in charge at the helm. Further helping business, the Chancellor announced a £100million initial commitment to a “National Retraining Scheme” with the CBI and Trades Union Congress and support for businesses struggling with the Apprenticeship Levy.
Hammond’s plea to “regenerate capitalism” will have enthused the young conservatives in the hall and those watching from outside the secure zone. It is exactly this type of messaging that the Conservatives are striving to get across during this Conference, driving home to members across the country and the public that free-market capitalism is what the country needs to create opportunity for all.
Hitting the headlines after his speech, Hammond’s direct aim at international technology companies made a splash. He told the conference hall “The best way to tax international companies was through international agreements. But the time for talking is coming to an end and the stalling has to stop. If we cannot reach agreement the UK will go it alone with a digital services tax”. This is the first time that the Chancellor has committed to ensuring that the likes of Amazon, Google and Facebook pay the right amount of tax in the United Kingdom. It has been a challenge that has plagued Hammond’s tenure as Chancellor and this ambition will inevitably alleviate his frustrations.
But is it enough to challenge Corbyn and Labour’s ambitious plans for the economy? The headlines are not as big as Labour’s big announcement on jobs, housing, green economy skills and development. While Hammond was determined to keep finances on track, the Conservatives will have to think at some point whether the impacts of strict fiscal rules will lead them past the General Election. There are concerns that the public’s appetite for austerity is wearing thin, and at some point the Government will need to increase spending to address the challenges of the modern voter. Hammond acknowledged the unrest in his speech. His party’s inaction might just seal their fate.
Authored by: Kenneth Pritchard