For students of the relationships on which British Governments are founded, the weekend’s newspapers made for ominous reading.
While some found David Cameron and George Osborne overly close allies, nobody wants a return to the dark days of Tony Blair and Gordon Brown’s gang warfare on Downing Street. So the sight of anonymous aides in Numbers 10 and 11 briefing against their respective bosses is quite depressing.
Among other allegations, the tit for tat goes something likes this: the Treasury says that the Prime Minister and her team are “economically illiterate” and wanted even higher taxes; they reply that the Chancellor is “politically clueless”; Number 11 says its neighbours are slow to make decisions; Number 10 says the Chancellor “smuggled” a risky manifesto breach past his colleagues; Philip Hammond’s team say that Theresa May stole his positive policy announcements; and so on, and so on.
As is so often the case in such arguments, there may be some truth at the heart of each side’s grievances.
Certainly, the Chancellor’s objection to the Prime Minister pre-empting his announcements was visible during the Budget Speech when he corrected a passage that she had rendered incorrect:
“I am delighted to use the occasion of International Women’s Day to announce three additional measures…well, not quite announce them, because my right hon. Friend the Prime Minister has already announced two of them.”
At the time it went down as another of his surprise jokes, but evidently it was motivated by at least a little underlying frustration. Similarly, it’s not unimaginable that the Prime Minister’s machine can take time to make decisions, given the twin factors of Brexit consuming so much bandwidth, and its every decision being funnelled through its twin Chiefs of Staff. The same goes for the possibility that May’s team is more sympathetic to tax rises than her predecessor or her neighbours. As we reported in the Autumn, the Prime Minister has been clipping the Treasury’s wings somewhat in her first few months, and that has evidently stored up some annoyance, too.
From the other side, it’s fair to say that the Treasury evidently didn’t adequately check their proposals against the manifesto, as we reported last week, and if they were aware of the potential clash, the Chancellor misjudged whether MPs and the newspapers would think it a serious problem. On the charge of political cluelessness, Hammond has a lot of ministerial experience but this is the first time he has been at the centre of a storm like this. His time at defence and the FCO didn’t involve introducing controversial legislation and was scandal-free – he has been fortunate in avoiding a firestorm like this during his rise, but is also therefore not the most experienced damper of wildfires in the Cabinet.
Either way, shooting at each other is evidently not going to make the problem go away. Nor will simply deferring it to the Autumn. The issue has now become so big – out of proportion, really, to its cash size – that I doubt trying to fudge it with some compensatory counter-measures will be enough, either.
At worst, leaving it unresolved will only mean that it will overshadow the Chancellor’s first Autumn Budget just as it overshadowed his final Spring one – only to then be defeated by a rebellion against the legislation. And in the meantime, the wound will continue to fester and his position will be undermined ever more seriously. His joke about Norman Lamont being sacked just weeks after delivering “the right budget, at the right time, from the right chancellor” would come to haunt him.
The Government cannot afford for that to happen. May is strong because of her early victory in the leadership election, and the enduring power of the referendum, but she is a politician without a natural Parliamentary gang who is still in the early months of cementing new alliances. Hammond is a key player in that process, and even a reduced Treasury is still a powerful tool in the patronage game. Just as importantly, he is a traditional conservative who reassures business about the Government when the private sector intermittently fears some of the more radical aspects of Nick Timothy’s industrial strategy, and is a symbol of stability amid the doubts and controversies of Brexit. In short, the Prime Minister needs him.
Given that it is in both their interests to sort out this policy – and to quell the argument – sooner, rather than later, what is to be done?
The manifesto promise must be honoured. Yes, it might stick in the Government’s craw given Hammond and May’s shared dislike of Cameron and Osborne’s love of impractical fiscal pledges, but the pledge was clearly made nonetheless – and they backed the manifesto publicly. Yes, Hammond breached the manifesto in his Autumn Statement when he abandoned Osborne’s deficit timetable, but that was more a recognition of reality than a change of tack – and anyway it is an inescapable political truth that voters find it easier to forgive the deferment of pain than the hastening of it.
If the choice is between dragging the issue out, only to be defeated on it the end after extended political suffering, and killing it off now, it must be killed off. In a fiscally neutral budget, that will mean a tax rise or spending cut elsewhere and thus an amendment to the Finance Bill. But the manifesto retains its power, and the Government cannot afford to fight it or each other any longer.