We picked up Philip Hammond’s evidence to the Treasury Select Committee last week, reporting how he has abandoned his department’s Project Fear economic forecasts. He explained to the committee that the pre-referendum frighteners it published under George Osborne “didn’t capture all of the potential outcomes”.
Adam Boulton in today’s Sunday Times (£) refers glancingly to another part of the session, in which the Chancellor told the committee that he plans to downgrade the Autumn Statement, or rather take it back to its roots. It was originally part of a plan by which government would give two economic updates a year, enshrined in legislation by Labour during the mid-1970s, with Denis Healey giving the first such statement in 1976 (the year of his notorious turning-back at Heathrow Airport in the midst of economic crisis).
Healey’s original statement included an announcement of his spending plans. When Ken Clarke became Chancellor the best part of 20 years later, he put the spending and tax announcements back together again in the Budget, moved it to the autumn, and introduced a brief summer statement focused on forecasts.
Clarke believed that it was sensible for tax and spending plans to march in step together, but Gordon Brown, who succeded him, wanted a second annual bite at the announcement cherry – and so went back to a spring budget and re-introduced the Autumn Statement in the form of a Pre-Budget Report. George Osborne continued to treat the statement as a way of maximising his political impact, using it in effect as a second Budget opportunity each year in which to gain some vantage, or attempt to.
Hammond evidently prefers Clarke-like substance over spin-focused style, and wants in future years to move closer to the original vision of the statement. I wonder if he will come to regret it. This year’s statement is the Government’s one big pre-Christmas opportunity to take the economic initiative. He may need such a chance again next year.
And in future years, too – given the coming Brexit negotiations, the uncertainty about what will come out of them, and the need to react quickly. What looks at first glance like the stripping-away of a gimmick may be seen in retrospect as the casting-away of an opportunity.