That Brexit dominates the political landscape is an unalterable fact. One might wish that it was otherwise. But there is no gain from yearning to be elsewhere. This is why we wrote off this year’s Conservative Party Conference, arguing that it was an exercise in suspended animation while further developments in the negotiation were awaited. Tory MPs and activists could thus throw caution to the winds. They could disagree with each other about the party’s future direction over, say, economic policy without damaging Party unity further.
At the same conference, Philip Hammond said, during his speech to it, that “when the Prime Minister gets a deal agreed…there will be a boost to our economic growth…a “Deal Dividend”…which we will share, in line with our balanced approach…between keeping taxes low; supporting public services; reducing the deficit; and investing in Britain’s future.” But the same truth that applied to the Conservative Conference will apply to his Budget on Monday.
As during the run-up to every Budget, the Chancellor has been lobbied energetically (including on this site by a columnist and contributors). Some want particular taxes cut; others action on housing; others still wider, capital spending; others, new fiscal rules. Others yet – namely almost all of Hammond’s ministerial colleagues – want him to do for their budgets what he has already promised to do for the NHS: in other words, increase them further, given Theresa May’s own conference promise of “an end to austerity”.
The Chancellor may be aided by a windfall of some £13 billion, we are told, wafted into the Treasury by higher-than-expected tax receipts – “despite Brexit”, we can’t help adding. That should enable him to meet help both meet the NHS bill which Downing Street has sent in his direction and bale out Universal Credit. And we can be sure that there will be some add-ons and twiddly bits for some of the sectors and interests he praised in his conference: artificial intelligence, self-driving cars, personalised medicine, virtual reality, advanced robotics.
But the discomforting truth is that the Prime Minister may not get a Brexit deal at all – and that, if she does, the Commons may vote it down, with uncertain consequences: there is really no way of knowing. That being so, there may no “Deal Dividend” at all; instead, there may be No Deal, with investors paying more money in rather than getting cash out, if a sudden gap opens up in the public finances. All that Hammond can be certain of on Monday is uncertainty.
He thus has little option but to make a virtue of necessity. If he is wise, the Chancellor will set himself one task only next week: to persuade voters, business, Parliament and – not least – our EU interlocutors that Britain is doing all it can to be ready for No Deal. Dominic Raab is pressing his foot on the accelerator. He told the Cabinet this week that departments need to redouble their efforts. The Government is planning a wave of No Deal legislation next month. Next week, Hammond must provide the opener to this show.
The Prime Minister once proclaimed that “No Deal is better than a Bad Deal”. We have heard rather less of that from her recently. But there was always doubt over whether she meant it: most of the key players in Downing Street are desperate for a deal, and Brussels knows it. The institutional Treasury and the Chancellor himself have been near the heart of the problem. If you think about it, his words in Birmingham were a vivid illustration of the issue: if you assure the world there will be a deal, after all, why should business prepare for No Deal?
Hammond would have little room for manoeuvre in any event. He is in a weak position. Theresa May cut him out of her election campaign last year, and planned to ship him out of the Treasury. Backbenchers dynamited his first Budget, with its attempted national insurance hike. The DUP or the ERG could exploit any controversial measure by voting against it in the Finance Bill: threats to that effect have already been made.
There have been better and worse Chancellors than Hammond – and unluckier ones, too. But there can seldom have been one so vulnerable to “known unknowns” and “unknown unknowns” on this scale. He is the No Man’s Land Chancellor, waiting for Brexit as those tramps waited for Godot (though admittedly they had no set date for his arrival). He will know that this could be his last Budget. He can use it to be neither Eeyore nor Tigger, but simply to play it straight.