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Liam Booth-Smith: Budget is a government signal Brexit may do damage

Liam Booth-Smith
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The first test of a Budget is the five hours following the chancellor’s statement at the dispatch box.

That period, in the run up to the early evening news, is where the opposition, pundits and wonks grind through the document in order to find the sleights of hand, holes and hidden meaning. If nothing tangible can be found in that first five hours, the government exhales deeply.

The second and more important test is the next day’s headlines and how they shape the ongoing narrative around the Budget. The government has passed the first, but it’s not clear if they will the second.

Housing was central to the budget but so much of the detail was briefed in advance it lacked force on the day. The focus on younger people, an extended young person’s rail card up to 30 years old being the symbolic announcement, was similarly lost in the run-up. As I write, Sky News has spent the last hour discussing depressed wage growth and the Office for Budget Responsibility’s downgraded growth and productivity forecasts. The political message from this Budget was that Philip Hammond has probably secured his job, but the government hasn’t been able start a positive new conversation.

In policy terms there was a lot to be pleased with in the Budget, however. New devolution deals, the Transforming Cities Fund, and extra cash for schools, NHS and the Universal Credit reforms all respond to requests for action from different parts of the local state. Therefore, councils were just another bowl to which the Treasury offered its basic brand bread and soup.

The more I reflect, the more I think this Budget was one of the safest we’ve seen in years. Everyone got a little bit of what they wanted. Just enough to ensure a chorus of cautious welcomes. In the short-term this will get the government through a major fiscal event relatively scratch-free, but few long-term challenges were abated. For example, social care was ignored, prompting a collective press-released ‘it’s behind you’.

Budgets normally project a clear political sentiment. First an elegant combination of policies briefed in advance to set the scene. Then, fresh meat on the day to feed tomorrow’s front pages. Gordon Brown and George Osborne were experts at such message-craft. Central to the success of this political theatre is everyone knowing their lines and no one talking over anyone else. The voters should be in no doubt about who the Budget is helping and how. In the words of Saul Bellow, “simpler and simpler” should be the goal.

In this context the Budget was an oddity. Rather than a coherent set piece, it was a portmanteau; a combination of policies jostling for position. This is a government of ten stories desperately trying to tell one.

And this brings me onto Brexit. The government’s biggest agenda is also its most spectral. The government is cagey about releasing its own working and has, to date, traded largely in platitudes with the EU: “no deal better than a bad deal”, “Brexit means Brexit”, “we can go to the wire”, etc.

The chancellor allocating £3bn to a Brexit contingency fund is the first significant signal by government that Brexit might do some damage. As negotiations trundle on I wonder how much bigger this pot will get as each department, service and business lobby makes their case to the Treasury?

Liam Booth-Smith, chief executive, Localis

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