Hammond’s muted and no-surprises Spring Statement was echoed in the responses from the media, commentators and opposition benches across Westminster. Usually, when the Chancellor steps to the dispatch box for a fiscal event, the tweets are poised and the commentators briefed to hit back. This time, in the first Spring Statement of Hammond’s new revised fiscal format, responses have been quiet and observant.
Leading the charge and one of the fierier respondents came as Hammond hinted at easing austerity during his short, 26-minute Spring Statement, which led to a some-what rambling rebuttal from Labour’s Shadow Chancellor John McDonnell who accused the Chancellor of “outstanding complacency”. McDonnell criticised Hammond for suggesting that “light was at the end of the tunnel” for nurses and doctors in the NHS as well as other struggling public servants, stating that he should act to address spending concerns in the NHS and other public services. McDonnell used this as an opportunity to show how out of touch Hammond is from the day to day struggles of many working in the public sector and attempted the drive home this point during his rebuttal, stating that the outlook up to 2022 was going to have a severe impact on living standards.
Of course, the devil is in the detail and as the minutes ticked on and more people had time to read through the OBRs report, the headlines started; the total predicted bill for Brexit is £37.1 billion. Hammond did not mention this figure in his statement, instead opting to lead with the headline figures of revised economic growth. This figure has provided an opportunity for Remainers to highlight how much Brexit is costing public services.
From other parts of the opposition benches, the SNP decried the lack of new public spending, while Caroline Lucas criticised Hammond and the Government for failing to take definitive action on introducing new green taxes. But the SNP’s Kirsty Blackman said the biggest laugh came when the Chancellor said that progress had been made on Brexit. MPs from both sides of the house could be seen laughing at the point, a discouraging sign for the Prime Minister.
Within the Westminster bubble but out with the Palace boundary, responses from commentators have been largely poor. The Institute for Fiscal Studies stated that the figures much weaker than two years ago. IFS Director Paul Johnson nudged the blame for the “dreadful” numbers further towards Brexit, echoing McDonnell, that comparatively the UK was behind other economies.
The Resolution Foundation continued the trend highlighting the negative outlook for future years and potential impact on living standards. Their Chief Economist Matt Whittaker posted a comparison of real-terms pay growth, stating that it showed some good news in the revised figures from the OBR. However, as has been picked up by many including New Statemen journalist George Eaton, the long-term growth figures to 2022 are weak and far behind other countries.
McDonnell raised in his response that the UK is the slowest growing economy in the G7. This has been trailed in responses to the Chancellor’s statement and has led to is the comparative analysis of development in sectors of the UK that are lagging other countries; automation, artificial intelligence and solar energy. Hammond said in this statement that there was work to do. But, with Brexit taking up so much of Government’s budget, time and attention, their efforts will be hampered from the word “go.”
Authored by: Kenneth Pritchard