The speech on fiscal priorities which the Chancellor was due to deliver today was cancelled at 2.36pm yesterday. In its place, a ‘fast-tracked Spending Round’ on 4th September was announced by press release at the, ahem, unusual time of 10.42pm.
The round takes the place of the planned full Spending Review – on the basis that, as Sajid Javid’s Telegraph article (published at almost exactly the same time) explains, ‘it would be a distraction to start debating every line of government funding’ at this crucial Brexit juncture.
That can be true in a number of possible ways: it could be distracting to the Treasury in the midst of complex negotiations, and labour-intensive preparations for deal or No Deal scenarios; it could be distracting for ministers to force them to fight one another for money just when Downing Street needs them to be completely disciplined and obedient; or it could be distracting for voters when the Prime Minister wants and needs to communicate a very clear message to them, not least for the election which is inevitably on its way. Or all of the above.
In a way, this is a compromise – or at least a hiatus – in a fiscal dispute. One reason a lot of ministers in the fag-end days of Theresa May’s administration were concerned and annoyed about her attempts to make financial commitments in the search for a legacy was that they felt it was pre-empting the necessary and imminent full Spending Review planned for the Autumn.
Postponing that review restricts the new Government’s freedom of action by effectively continuing Philip Hammond’s top-line rules for fiscal policy, but, as ever, such ‘rules’ are often in practice mere guidelines. Hammond’s successor writes himself new space: ‘Thanks to the hard work of the British people over the last decade, we can afford to spend more on the people’s priorities – without breaking the rules around what the government should spend.’
That might sound a little uncomfortable, but ministers will likely be able to live with it for the good reason that it won’t last very long. Officially this Spending Round ‘will give Whitehall departments certainty over their budgets for next year’, but will it really last that long?
Consider the possible scenarios. Either the Conservatives deliver Brexit, then win an election. In which case they’d have a new mandate, potentially a real majority, and Javid would have a good basis to introduce a proper, wide-ranging Spending Review and full new Budget, setting a new agenda for himself and Boris Johnson, finally free of May and Hammond’s hangover. Neither man is likely to want to wait until next year’s official Budget date – some time in mid-to-late Autumn 2020 to do things their own way/
Or the Government collapses, and is replaced by the mish-mash of separatist/unionist/socialist/liberal/conservatives we saw yesterday parading their fragile agreement on not liking Brexit. They’d want to try to do things differently, whether they were able to reach agreement or not.
Or the Conservatives lose an election, in which case some variant of Labour, in majority or in a coalition of some sort with the Lib Dems and/or the SNP, come in – and they’d certainly want to crack on sharpish with fulfilling whatever exciting form of job-destruction and asset-seizure that John McDonnell was dreaming of for all those backbench years. Again, bye-bye one-year Spending Round.
So in practice, this change may be frustrating or restrictive to some degree, but it isn’t likely to be something ministers have to suffer for very long.