THE CHANCELLOR’S half-yearly statement on the public finances is usually one of the biggest events in the political calendar. Not so on March 13th, when Philip Hammond rose in the House of Commons to deliver his spring statement. The chamber was far from full. Conservative MPs sitting directly behind Mr Hammond checked their phones as he delivered his speech. “I am acutely conscious of the fact that the House has other pressing matters on its mind today,” Mr Hammond began.
Brexit is not just a distraction. It also makes a mockery of the process of fiscal forecasting. The Office for Budget Responsibility, the fiscal watchdog, makes its projections based on current government policy. For now it assumes a smooth exit from the EU on March 29th. Yet after a week of Commons defeats the government looks set to request an extension to the exit date. And although MPs have also voted against a no-deal exit, that is not enough to stop such an outcome happening by accident. Since no one has the foggiest idea how Brexit will pan out, fiscal forecasts are barely worth the paper they are written on.
Yet the government is required to deliver two fiscal updates a year. Mr Hammond also loves his numbers. MPs were therefore treated to the chancellor reeling off forecast after forecast, often with an absurd level of precision. By 2023, Mr Hammond claimed, the economy will have 600,000 more jobs. GDP growth that year will be 1.6%—no more, no less. To pad out the speech the chancellor chucked in a few cheap but crowd-pleasing announcements: an extra £100m ($130m) for the police in 2019-20 to tackle a surge in knife crime, and free sanitary products in secondary schools.
The real meat in this year’s spring statement was not policy but politics. Mr Hammond, normally not a very political chancellor, spent a lot of his speech attacking Labour. He claimed that John McDonnell, his opposite number, views business as “the enemy”. The message was clear: the Tory government might be making a pig’s ear of Brexit, but under Labour everything would be even worse.
The attacks on the opposition, however, concealed subtler criticisms of Theresa May. Mr Hammond argued that if MPs approved a withdrawal deal with the EU the economy would pick up and he would be able to loosen the fiscal purse-strings—what he calls his “deal dividend”. No-deal, by contrast, “would mean significant disruption in the short and medium term.”
Mrs May’s attempts to get her withdrawal agreement through Parliament have failed. Yet as Britain edges ever closer to the cliff edge, she has shown little desire to adapt the agreement to win Labour support. The only solution, Mr Hammond proclaimed, was to reach “a consensus across this House for a deal we can collectively support, to exit the EU in an orderly way.” Two years ago rumours swirled that Mrs May was to sack Mr Hammond over his pro-EU views. That he now feels free to tell her publicly how to do her job is a measure of how much authority she has lost.