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Many Chancellors have faced worse economic conditions, in the course of preparing for a Budget, than Philip Hammond, but few have confronted worse political ones.  As he looks forward to delivering it next week, he is unlikely to catch himself singing “always look on the bright side of life”.

Consider the landscape.  Tory MPs have become reluctant to vote for tax rises and spending cuts (that’s to say, reductions in the rate of spending), as some showed under David Cameron when they opposed tax credit and disability benefit changes.  Cameron at least had a majority after the 2015 election, as did Theresa May when the Chancellor introduced his first Budget last spring.  He was forced to withdraw a major plank of his proposals, his plans for NIC reform, and the defeat tarnished his reputation for competence.  Consequently, the hunt next week for foul-ups and unpopular plans will be carried out with more zest than ever.  And May now has no majority at all.

All this would be challenging enough even were it not for the curveball of Brexit.  The economy has confounded the predictions of his own department – it said that a Leave vote would “push the economy into a recession” – but it would be equally foolish to assert the opposite for the next few years, given the uncertainties ahead.  The bungled general election has damaged Conservative self-confidence, and driven Tory MPs to think more about young people, which is sensible, but sometimes to confuse all of them with students, which is not.  One school of thought wants the Chancellor to stick to his aim of balancing the Budget in the next Parliament.  Another wants him to junk it.  Some want him to deliver a cautious Budget, because he is not in a position to deliver anything else.  Others want him to deliver an adventurous one, because the Government urgently needs a sense of purpose.  It has been briefed at different times that Hammond will deliver both.

But the most profound effects of the Brexit vote to date are not so much economic as political.  The Chancellor’s lack of enthusiasm for it, and his struggle last summer to keep Britain as close to customs union membership as possible, has won him some new admirers: it is ironic that this dry-as-dust businessman, whose opposition to same-sex marriage showed up his traditionalist instincts, has picked up support on the Party’s left.  But Hammond is essentially a solitary operator, who has forced his way upwards through sheer brainpower.  He lacks the support network of a Boris Johnson or an Amber Rudd.  He is thus vulnerable to the wrath of the Tory Brexiteers.

And finally – just in case the Chancellor, despite all this, feels inclined to over-confidence – the Prime Minister planned to fire him after last summer’s election.  He is only still in place because her position is so weak.

ConservativeHome is a pro-Brexit site.  We believe that the Treasury, which saw a central foundation of its economic worldview demolished by the referendum vote, badly needs shaking up – which is why we would like to see Michael Gove sent there.  It is against that background that we none the less say unhesitatingly that Hammond deserves the support of all Conservative MPs next week.  We do not mean that they should psych themselves up to back him whatever he does.  But we do mean that pro-Leave MPs should not approach the Budget somehow wanting him to fail.  The stakes are too high.  It is true that DUP support lends the Government a working majority, that the next election is not due until 2022, and that the Conservative poll ratings are remarkably buoyant.  But Tory MPs have the capacity to subject the Prime Minister to a leadership challenge, thereby destabilising the Government, perhaps to breaking-point, if order within the Conservative Parliamentary Party breaks down.  It looked for a moment last week as though this was possible soon.

Letting disagreements about Brexit leak into the Budget’s treatment could deal the Government irreparable damage.  So just as the Chancellor must strive to meet the concerns of Leave supporters – for example, over preparations for No Deal – so they too should work to give him the benefit of the doubt.  We remain unconvinced that May can lead the Tories into the next election, a view that our monthly survey suggests that we share with our readers.  But a change of Prime Minister in say 2019 is one thing.  Forcing a leadership election now, amidst the most important negotiation for Britain in modern times, would be a contemptible act of self-indulgence.

None the less, for May merely to survive isn’t good enough.  Five years of drift risks Britain’s first-ever hard left government in 2022 – a possibility that not enough people on the centre-right have taken to heart.  The Government urgently needs the sense of direction that Party Conference failed to provide.  Next week’s Budget set-piece, to whose contents we will turn soon, offers an opportunity to set it.

123 comments for: Why pro-Leave MPs should prepare to back the Chancellor next week

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