Robert Halfon: A new, magical Conservative leader with presents for all? Sorry – I don’t believe in Santa Claus.

Plus: Bad Tory language. Cutting VAT, Good Conservative news for workers. And: a second referendum – not a People’s Vote but a Cheater’s Vote.

Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

Confidence in the Prime Minister

Despite opposing the Government’s Brexit deal as it stands, I voted for Theresa May in last week’s confidence motion. It wasn’t a difficult decision.

First, I didn’t think it was right to change the Prime Minister in the midst of Brexit negotiations.

Second, Theresa May has a great deal of support and sympathy from the public outside Westminster – even from those who aren’t in favour of the deal and want a “clean” Brexit.

Third, I didn’t want to go down in history as a Conservative MP who helped depose an existing Tory Prime Minister: the ties of loyalty that bind us remain still strong.

Fourth, if there is to be a leadership contest, I would like it to be a lengthy one, in which leadership candidates are tried and tested in all parts of the country with national and local media and hustings with members. I found it very difficult to believe the narrative from the coup d’etat supporters, that a new leader could, or should, be selected in two to three weeks.

Besides, even if this was possible, who was this new, magical Father Christmas, who was going to climb down the Commons’ chimney with presents that bring together the Conservative Party, unite Parliament and produce a deal that everyone can rally around? However much I miss them, my days of believing in Santa Claus are far behind me.

Finally, I still have a hope that once Brexit is over with, Theresa May will return to being the Prime Minister she was in 2016 – galvanising the nation in dealing with the burning social injustices in our country.

All this doesn’t mean that I think everything in the Downing Street Garden is rosy. Certainly not. But I was prepared to give the Prime Minister the benefit of the doubt and don’t resile from that, nor regret it.

Bad Language

I have always believed in the politics of language. It amazes me just how the centre-right has allowed Labour to commandeer the language of compassion and social justice. As The Times highlighted last weekend, Conservatives are associated with ‘austerity’, ‘kill zones’, and ‘a noose’ around the Prime Minister’s neck – terminology that should remain in a Stephen King novel.

All the while, Labour are associated with terms of benevolence, sympathy for those in poverty (John McDonnell’s remarks about Esther Mcvey being long forgotten). The divisions and violent language between different Tory factions make us look more like a Mad Max film than a governing party. If we are not careful, we will re-toxify ourselves late-1990s style – and if we don’t stop, Conservatives will be whacked by voters at the ballot box.

As an aside, it is interesting that Remainers who won’t accept the 2016 result have come up with the ‘People’s Vote’, whereas Leavers, once associated with great terminology such as ‘take back control’ or ‘more money for the NHS’ are now associated with ‘no deal’ (rather than a ‘clean Brexit’), or arguing about the unintelligible ‘backstop’.

Workers Unite

Amidst the fog of Brexit, some lights occasionally shine brightly. Especially when it comes to workers. In the Budget, the Chancellor cut taxes for the lower paid and increased the National Living Wage by 4.9 per cent.

On Monday, Greg Clark announced icing on the cake with a huge strengthening of workers rights – the biggest upgrade for over 20years. There is some great stuff here, including scrapping the Swedish derogation, which brings an end to the legal loophole allowing some firms to pay agency workers less than permanent staff. Prior to this legislation, temps working “anti-social shifts” could be earning as much as £7 less an hour than their permanent counterparts, according to the TUC.

Under the new measures, staff will made aware of their rights on their first day of employment in a statement which sets out eligibility for sick leave, maternity and paternity leave. More powers will be granted to impose harsher penalties on employers for non-payment of wages.

Seasonal workers will also see a boost in holiday pay, with companies now having to calculate holiday pay based on a 52-week period, rather than a 12-week period. Outlined in the Government’s Good Work Plan, employers will be banned from exploiting staff by retaining tips, ensuring that customers can be confident their money is going where they have intended.

All-workers, including those on zero-hours contracts, will be entitled to “request a more predictable and stable contract”, tackling the prevalent one-sided flexibility.

Workers of Britain unite. It is a Tory Britain, not Labour that is really making a difference.

VAT

I’ve written before on ConservativeHome about the EU Withdrawal Agreement meaning that we have to give £39 billion of taxpayers money to the EU. If the transition period is extended by two years, that could be another £10-15 billion a year, on top of the £39 billion.

But there is another elephant in the room. The EU principle of harmonisation entails that, as long as we are in the EU, we abide by the rule that the five per cent rate of VAT on household bills in Britain cannot be scrapped or lowered. Citizen’s Advice suggested that cutting the five per cent rate to zero would save households, on average, £60 a year on their domestic energy bills. If the EU withdrawal agreement goes through, the Government have indicated that the UK will remain compliant with EU VAT laws during the transition period.

Article Nine of the Northern Ireland Protocol sets out a different picture under the backstop arrangements, stating “Northern Ireland will remain part of the UK’s VAT area, with HMRC continuing to be responsible for the operation and collection of VAT, and Parliament for the setting of VAT rates”.

But that being said, the European Scrutiny Committee suggest that the real question is what will happen after the transition period, since the Government is “yet to specify clearly what its actual plans are for a new arrangement with the EU on VAT after the end of the proposed transitional period”. Will hardworking families be paying the higher rates on their household bills – or will we really leave the EU and be able to cut VAT for hardworking families?

Referendum Redux

After glancing at first-edition Sunday Times and Mail On Sunday papers late on Saturday night, I nearly choked on my Lemsip. I was dismayed to read reports suggesting that David Lidington and Gavin Barwell were planning, preparing and talking with opposition MPs about having a second referendum.

By Sunday morning, both Gavin Barwell and David Lidington had responded to my tweet on enquiry – stating that they are opposed to a second referendum. Although the detail of the newspaper reports were not denied (particularly in relation to Cabinet Office planning), it was reassuring to hear the Prime Minister speak robustly in the Commons on Monday, guaranteeing that there would be no further referendum of any kind. A second referendum would not be a People’s Vote, but a Cheater’s Vote.

Happy Christmas and New Year to all Conservative Home Readers.

Willie Rennie pulls Lib Dems out of Scottish budget negotiations

While all eyes are on a key vote on a proposal put forward by a minority government at Westminster this week, another political drama looms. On Wednesday  the Finance Minister of a minority government at Holyrood will present his budget. Derek Mackay is going to have a hard time getting his proposals through. All Willie […]

While all eyes are on a key vote on a proposal put forward by a minority government at Westminster this week, another political drama looms. On Wednesday  the Finance Minister of a minority government at Holyrood will present his budget.

Derek Mackay is going to have a hard time getting his proposals through. All Willie Rennie asked for as a preoondition to negotiaions for Lib Dem support was that they just drop the idea of an independence referendum in this Parliament, fulfilling a key part of our manifesto. It chimes with what we are hearing consistently on doorsteps – that people don’t want to go through 2014 again. They want to concentrate on getting rid of Brexit.

The arguments that all parties apart from the Conservatives, have united behind in the Scottish Parliament against Brexit apply equally to breaking up the UK. While you don’t expect the SNP ever to give up campaigning for independence, keeping it off the agenda for the time being is as sensible for them as it is good for the country.

The SNP lost 21 seats in the 2017 General Election as Scottish people reacted with horror to the prospect, floated by Nicola Sturgeon, of another poll. All tests of opinion so far suggest that they would lose another referendum, which is why they won’t call one. The problem is that if they explicitly say they’ll delay, their own people will kick off.

So they wouldn’t agree Willie’s pre-condition. And so Willie has withdrawn the Lib Dems from the negotiations.

From the BBC:

Scottish Lib Dem leader Willie Rennie said he had met Mr Mackay and Public Finance Minister Kate Forbes on two occasions “to explore what could be done” with the budget.

Mr Rennie said his party had been willing to “step in to help address the problems that have been mounting since the SNP came to power 11 years ago”.

This included investment in education and mental health services, an improved deal for councils and action to help tackle staffing shortages in hospitals and schools.

But he said the talks ended when the SNP politicians “could not agree to even a short cessation in their independence campaign”.

Mr Rennie added: “That was unacceptable to us. The SNP’s own Growth Commission admits that their plans will see us poorer after breaking up. Public services will be hit.

“Breaking up is hard to do. The lessons of Brexit are the lessons for independence, so it is disappointing that the Scottish government won’t learn and set aside their independence plans.”

He claimed the Scottish government was now “stuck with the Greens and are at their mercy”, which he predicted would “cause problems for important Scottish industries in north east Scotland and see big tax rises”.

The key votes on the Scottish Budget don’t take place until the New Year. We shall have to wait and see how this political drama unfolds.

 

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

Spain threatens Brexit ‘veto’

Also making headlines: Theresa May ‘fighting on two fronts’ and Italy’s budget battle.

Spain

Spain’s press focused on Brussels and London as the country threatens to veto the Brexit deal over Gibraltar.

— Prime Minister Pedro Sánchez on Thursday tweeted that after a phone conversation with his British counterpart Theresa May, their “positions remain distant,” El País reported. Spain wants to ensure that any future trade deal between the EU and the U.K. would not apply to Gibraltar, unless explicitly agreed between the U.K. and Spain bilaterally.

— The Brexit deal has to stipulate “with total clarity” that any matter related to Gibraltar will always have to be negotiated between Spain and the United Kingdom — or Spain won’t support it, el Mundo wrote.

La Razón reported on Spanish EU Minister Luis Marco Aguiriano’s claim Britain secretly amended its position on Gibraltar.

United Kingom

U.K. papers, meanwhile, were consumed by the domestic opposition to May’s deal.

The Guardian wrote that the PM is “fighting on two fronts to save her Brexit negotiation strategy”: her own backbenchers on the one hand and European leaders on the other.

— MPs including Boris Johnson told May to “dump the backstop” plan for avoiding a hard border in Ireland, saying it “makes nonsense of Brexit,” the Telegraph reported.

Sky news ran an analysis of why the British government dropped the word “frictionless” when discussing a future trade deal with the bloc.

The Mail, meanwhile, splashed the PM’s demand let her “Get on with it!”

Italy

Italian media covered the ongoing dispute between Brussels and Rome over Italy’s budget plans for 2019.

— La Reppubblica ran an interview with Deputy Prime Minister Luigi di Maio, who insisted that while Italy is open for dialogue with the bloc on its 2019 budget, it will not change any “main pillars.”

Il Giornale reported Italian PM Giuseppe Conte is showing signs he’s willing to reshape some aspects of the budget.

Germany

Germany is debating asylum law again, after conservative leadership challenger Friedrich Merz questioned whether the fundamental right of asylums should be maintained in its current form.

FAZ reported the CDU leadership candidate toned down his comments on Thursday, saying fundamental right for asylum should be maintained but restricted.

Der Spiegel wrote that Interior Minister Horst Seehofer was “surprisingly clear” in stating that deportations to Syria are currently not an option, even if the person in question has committed a crime. This comes after the CDU’s Annegret Kramp-Karrenbauer, another challenger to replace Angela Merkel as party chief, recently demanded criminal asylum seekers be deported back to Syria despite the ongoing civil war.

France

France covered the ongoing “yellow vest” protests and Nicolas Hulot’s first interview since he resigned from government in August.

BFMTV said French President Emmanuel Macron will unveil new policy in response to the so-called yellow vest protests next Tuesday.

— Le Monde reported that several demonstrators called the police after they found migrants hiding in a truck during the protests. Their claim they were “better than customs” sparked accusations of racism.

Le Figaro liveblogged the interview with former French Environment Nicolas Hulot, in which he talked about renewable energy, carbon tax and the ongoing protests.

May’s Northern Irish backers fire warning shot

Also making headlines: Anti-government protests in France and the ongoing row over Italy’s budget.

United Kingdom

The British press was all about the move on Monday by MPs from the Democratic Unionist Party to vote with the opposition Labour Party on an amendment to the U.K. government’s Finance Bill, as well as to abstain from votes on other amendments.

The BBC called it a “stark Brexit warning.” In an analysis piece, the broadcaster’s Political Editor Laura Kuenssberg wrote that while the DUP insists this isn’t the end of the “confidence and supply” agreement that keeps the Tories in power, “the fabric of that arrangement is certainly torn … And once faith is broken between the two, it’s hard to see how it could be restored.”

The Independent said the “dramatic evening” had “thrown into doubt” Theresa May’s ability to maintain her governing majority.

The Guardian meanwhile focused on moves by Brexiteer rebels in the PM’s own Tory party to bring on a no-confidence vote in an attempt to topple her. The paper noted that Foreign Secretary Jeremy Hunt had backed the PM, warning his colleagues on the backbenches that toppling May risks “most appalling chaos.”

France

The protests sparked by rising fuel taxes, which have morphed into a wider movement of public discontent with French President Emmanuel Macron, continued to dominate French papers.

Les Echos wrote that by Monday, there had been 15,000 to 20,000 protesters on the streets, but the  movement is losing support as the number of injured protesters and police rises.

— The driver who killed a protester in the south-east Savoie region on Saturday was indicted for “intentional violence with a weapon that resulted in death,” reported le Dauphine.

— Nurses in France are also standing up to the government, with Le Monde reporting that 660,000 members of the profession had been urged to demonstrate in front of the Ministry of Health in Paris Tuesday.

Italy

Italian media looked at Brussels as the row over the country’s 2019 budget — which the Commission has rejected — continues.

— An EU verdict [potentially triggering an excessive deficit procedure] wouldn’t get Italy to make any last-minute changes in its budget proposal to get more on track with the EU, Repubblica reported.

— Economy Minister Giovanni Tria said that there would nonetheless be “the will to discuss” the government’s program in Brussels after the Eurogroup meeting, Il Messaggero wrote.

Germany

TAZ also covered the eurozone budget, writing that French-German ambitions to achieve a tighter meshing of Europe did not find support among conservatives.

Der Tagesspiegel covered a row around Friedrich Merz, who is one of the candidates seeking to take over as head of the Christian Democrats (CDU) after Angela Merkel. Since he let on that he is a millionaire, a “strange debate” has begun in Germany over whether it’s ok for a party leader or chancellor to be super wealthy, it wrote.

— EU countries decided to move ahead with plans for 17 new projects on military cooperation, Süddeutsche Zeitung reported.


Read this next: Brussels police shoot knife-wielding attacker who injured officer

LibLink: Vince Cable: Brexit’s real life impacts are already hitting the UK hard

Vince was up in Edinburgh this week (not, contrary to some reports, flying business class and staying in luxury). After an early start to do budget media stuff, he voted on the budget at 6:30 or so and caught a flight an hour later. He and Christine Jardine got to the Edinburgh West dinner at […]

Vince was up in Edinburgh this week (not, contrary to some reports, flying business class and staying in luxury). After an early start to do budget media stuff, he voted on the budget at 6:30 or so and caught a flight an hour later. He and Christine Jardine got to the Edinburgh West dinner at about 9:45 and both were in sparkling form.

In fact, I think that the speech Vince gave was better than his Conference speech. There was none of the schoolboy, carry-on style humour, and just a very simple, effective liberal message. He talked about needing to be honest with people about the future funding of public services – we will need to pay more tax. He talked about Brexit and our desire to stop it too, but he had plenty of vision about helping those who need it most – putting more money into Universal Credit and stopping its rollout until the problems with it are sorted out. He talked of his surprise that Labour had abstained on he Tory tax cut for better off people as he led our MPs to oppose it.

Timed to coincide with his visit was an op-ed in the Scotsman which he used to describe the detrimental impact that Brexit is already having on us:

Take Jaguar Land Rover. This great British brand employs 40,000 people in the UK and has just suffered a sales slide of 13 per cent, in large part because of the uncertain landscape of Brexit. JLR’s management has been clear about the risks of cutting ourselves off from our European neighbours and business partners. JLR is cutting jobs and has been forced to pause production. This is the real-life impact of Brexit. And what Scots are missing out on under current leadership is the creative thinking to make real change happen. After a decade of the SNP, growth is flimsy and productivity is lagging. It couldn’t be clearer that investing in people through education and mental health is the way to make the most of the talents we already have right here on our doorstep.

And he emphasised that Brexit is not inevitable:

The march proved a crucial point: Brexit is not inevitable. Where there is public and political will, there is a way. We can still secure an exit from the Conservatives’ chaotic Brexit through a People’s Vote.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

We must not allow ourselves to be bullied by idle threats from politicians in Paris

In 2016 the greatest democratic event in this country’s history took place. 17.4 million people voted to leave the EU. They wanted us to become a strong, independent trading nation once again – a country unafraid of standing on its own two feet. That is why we’ve got to stop allowing ourselves to be bullied […]

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In 2016 the greatest democratic event in this country’s history took place. 17.4 million people voted to leave the EU. They wanted us to become a strong, independent trading nation once again – a country unafraid of standing on its own two feet. That is why we’ve got to stop allowing ourselves to be bullied by our EU counterparts and start believing in Britain.

It’s only by accepting that we’re strong enough to walk away from the negotiating table – and thoroughly preparing to do so – that we will secure a trade deal with the EU that is good for our consumers and businesses.

We’ve heard some ridiculous suggestions from France recently. Apparently it will grind the Port of Calais to a halt unless we hand over £39 billion of taxpayers’ money, even if we don’t finalise any deal at all.

There are around 60 sailings to my constituency port of Dover from Dunkirk and Calais every day. The cross-Channel trading route is a huge success story. More than £120 billion of trade moves through Dover’s docks every year and when you add Eurotunnel to the mix, the Channel Ports account for about a third of the UK’s trade in goods.

Clearly the French and the Europeans want to keep this flowing after Brexit day next year. Indeed, a desire for any other outcome would be irrational economic self-harm. EU nations sell twice as much to us as we do to them, so any extra tariffs or traffic slowdowns would hit French farmers and German car-makers twice as hard.

Yet the public continue to be spoon-fed doom and gloom about border chaos, food shortages, price hikes, gridlocked motorways and even civil unrest from within this country – the latest manifestation of Project Fear. These vacuous threats from across the Channel represent a serving of Projet Peur 3.

To find the source, look no further than the Élysée Palace in Paris. President Macron and the EU want to bully us into accepting a bad deal. They think Britain’s greatest days are behind us and that we must be punished for daring to leave.

They are wrong about the British people. We know what it takes to stand up to bullies.

Fortunately, Xavier Bertrand – the forward-thinking boss of the Calais and Dunkirk region – takes the opposite view to President Macron. M. Bertrand knows the Port of Dover is an economic powerhouse that benefits the people of Calais and Kent. He wants to do the right thing, keep trade flowing and look after the people he serves.

But while calling out empty threats from across the Channel, we’ve got to strengthen our hand in the negotiations as well. We need to turbocharge preparations to leave the EU on World Trade terms and get serious about preparing to strike a World Trade deal. Unfortunately this week’s Budget did no such thing.

The truth is this work should have started the day after the 2016 referendum. I have long argued we need to be ready on day one for every eventuality – deal or no deal. No-deal preparations seem to have been held up by Whitehall officials who never believed Brexit would happen, and certainly don’t want it to now.

This week was crunch time and the Chancellor had the perfect opportunity in his Budget to prepare, ambitiously and positively, for a no-deal outcome. Instead he chose to set aside an extra £500 million – a drop in the ocean in terms of both government spending terms and what is actually needed.

He should be announcing an expansion of off-road lorry parking and committing to significant investment in our borders. The M2/A2 to Dover needs to be upgraded and widened. And we must start modernising our border systems, joining the likes of Singapore as world leaders in frictionless trade and security.

I state again that 17.4 million people voted to leave the EU – well over three million more than have ever voted for a political party in an election. They all believed in creating a better country for our children and grandchildren, where everyone has the chance to get on and succeed, where we are free to run our own nation and economy in a way that works best for us – not Brussels. Remainers are right when they say Brexit is the most important challenge our nation has faced since the Second World War. But they are wrong when they ignore its exciting opportunities, and dismiss what we must do to take them.

We need our leaders to start demonstrating a full commitment to making it work – no matter what happens in the negotiations. By continuing to talk our country down, allowing us to be bullied by idle threats from abroad and failing to prepare for any eventuality, all we’ll achieve for our country is a bad deal.

A bad deal would shackle us forever. EU rules are bad for hard-working taxpayers, as they allow giant corporations to dodge taxes. EU regulations are bad for business, as they protect those firms from honest competition. EU tariffs are bad for consumers, as they increase the cost of food and clothing. And all of it is bad for the rest of the world, as we cut off developing nations, as well as allies who not so long ago fought beside us for our freedom.

That’s why it is so important to agree a deal with the EU that works for us. And if we can’t agree one, we will walk away. Many countries are waiting in the wings, ready to strike free trade deals with their old friends. We cannot let the opportunity slip.

We must believe in Britain. We are strong enough to go our own way. Future generations won’t forgive us if we become so desperate to secure a trade deal with the EU that we do so at the expense of Brexit’s great opportunities.

Let’s stop being defeatist. Let’s become a truly free-trading, global nation again. We have had some great days. But if we hold firm, the greatest yet lie ahead.

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Unlike Labour, Lib Dem MPs will oppose Budget tax cut for better off

As I said on Monday, the bit that annoyed me most about the Budget was that better off people were getting  a tax cut when the benefit freeze continued and only a third of what was needed was put back into Universal Credit. Add to that the people who have their much-needed disability benefits cut […]

As I said on Monday, the bit that annoyed me most about the Budget was that better off people were getting  a tax cut when the benefit freeze continued and only a third of what was needed was put back into Universal Credit. Add to that the people who have their much-needed disability benefits cut back for the most arbitrary of reasons after deeply flawed assessments and you can maybe see why I am so fuming.

Astonishingly, Labour is backing the Tory plansalthough some may revolt.

So it’s good to see that Vince Cable will lead Liberal Democrats in voting against the tax cuts and asking for the £1.3 billion to be spent on reversing the cuts to social security. The press release actually says welfare, but I really wish they wouldn’t call it that. Social security is important for everyone. There needs to be a safety net to help those in the most difficult situations at any time. It’s what a civilised society does. It should be enabling and freely given, not grudgingly given with unreasonable expectations written into its heart as it is at the moment.

Vince said:

Government is about priorities. With public services desperate for investment, now is not the time to reduce taxes for high earners. Instead Philip Hammond should use the money to further reverse cuts to Universal Credit or end the benefits freeze a year early.

In Government Liberal Democrats focused tax cuts on lower earning families, and we support continued efforts to do so.

We encourage Labour MPs who disagree with both front benches about the raising of the higher rate threshold to vote with us against it and put pressure on the Treasury to change course.

One of the unpleasant trade offs in coalition was that we had to support a cut in the very top rate to 45p. I didn’t like it then but neither did Labour. They called us for everything. And now look at them. They have the most socialist leadership since Michael Foot and they are the ones backing Tory tax cuts when they aren’t getting anything else – we did get the rise in the tax threshold for the poorest which the Tories take credit for every damn budget.

We are doing the right thing tonight. Labour should be ashamed of themselves.

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

Brexit was the elephant in the room as Philip Hammond presented his Budget

Fiscal activism underpinned by a resilient and sound economy was the main message of this Budget. In recent months it became clear the budget deficit had turned the corner and was on a credible improving trend. The Chancellor has taken advantage of this not to pay down debt and achieve a balanced budget sooner, but […]

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Fiscal activism underpinned by a resilient and sound economy was the main message of this Budget. In recent months it became clear the budget deficit had turned the corner and was on a credible improving trend. The Chancellor has taken advantage of this not to pay down debt and achieve a balanced budget sooner, but rather opt for what he called a balanced approach to the public finances. This means spending more, not raising net taxes and instead allowing the budget deficit to persist, albeit at low levels. This fiscal year the budget deficit is 1.2% of GDP and is projected to be 0.8% by 2023/24.

Despite this, the Budget was trying to be all things to all people, and heavily interventionist, with 86 new tax and spending measures.

The Budget confirmed a sizeable net £103.5 billion fiscal boost over the six fiscal years from 2018/19 to 2023/24. Of this, £98.5 billion was increased spending, the vast bulk being the previously announced boost to NHS spending. For four of the six fiscal years, net tax cuts were announced, and these will be particularly large next year at £4.2 billion, led by an increase in personal tax allowances.

The Chancellor stressed a “Double Deal Dividend” but was unable – probably because of the ongoing negotiations – to focus on saying whether there will be any Brexit Dividend. Brexit was the elephant in the room. Of course, it is not just Brexit, but what you do when you leave the EU that is key and that will help deliver this dividend.

I agree with the idea of a Deal Dividend in that once there is clarity about what lies ahead then this will trigger a rebound in investment. Uncertainty over the last two years is likely to have dented or delayed investment plans. The Double Deal, as the Chancellor called it, is that he is keeping back some fiscal fire power in case he needed to act and boost demand in the event of a No Deal. But it is the Brexit Dividend – including how to spend domestically the sizeable sums we send to the EU, as well as delivering a pro-growth economic agenda – that is key.

The economy has suffered from a lack of demand. But it also needs a supply side agenda too and the Chancellor was right to acknowledge this. Given this, the economic and fiscal numbers were credible.

The good news is that the budget numbers are on an improving trend. As long as the market believes the projections are credible, and borrowing rates stay low, then the current economic environment provides a powerful dynamic in which the budget deficit can fall further, as it did post-war when public debt plummeted from 240 per cent of GDP. Last year’s debt of 85.2 per cent of GDP was a peacetime high and is projected today to fall to 74.1% by 2022/23.

This Budget was partially aimed at showing austerity is over. The trouble is, there is no clear definition of this, but you tend to know it when you see it. For many, it will mean an end of the squeeze on departmental budgets – and we will have to wait until next year’s Comprehensive Spending Review to see what will happen, particularly to the previously non-ring-fenced areas.

While I am an advocate of fiscal activism, the reality is that the UK needs to save in good times to be able to spend in bad. It did not do this and the financial crisis blew the fiscal numbers off course. Not only did austerity restrain demand at a time when the economy needed it, but also the government then missed the opportunity to borrow at record low rates to fund necessary infrastructure. Now, one could argue tax cuts should be high on the agenda, hence it is welcome that personal tax allowances were raised from next year.

Ending austerity should not mean unlimited public spending. There clearly needs to be ongoing reform, including regional wage policies. Ending austerity should not mean keeping taxes high to fund spending. It also does not mean sacrificing capital spending to fund current expenditure. Thankfully the Budget showed both a desire to avoid further tax hikes, an aim for cuts and to protect capital spending plans.

It is important to appreciate that the margin of error on these one year ahead fiscal numbers is huge. Thus, we should resist the temptation to aggregate forecast changes over the next five years, as it makes little sense to do so. The key is: what happens to growth?

The trouble is the UK’S economic picture is one of low growth, low inflation and, presumably, low interest rates. The UK’s trend rate of growth has previously been revised down since the global financial crisis. At this Budget the growth forecast was tweaked lower by the independent Office for Budget Responsibility (OBR), to 1.3%, and higher from 1.3% to 1.6% for next, and averaging around 1.5% up to 2023.

This leaves the UK vulnerable to any global setback. Vital is what happens to productivity growth and this would be boosted by increased investment and innovation – and it is helpful there were incentives to try and boost these. I would not be surprised if UK growth in 2019 is higher than expected: as consumption could be boosted by rising wages, higher employment and the announcement of an increase in personal allowances from next spring, while a Brexit deal would likely boost investment.

The most striking aspect is that the OBR projects a further 800,000 jobs by 2023, bringing to 4.2 million the net new jobs since 2010. This puts to shame Project Fear’s misplaced projection of massive job losses in the wake of a vote to leave.

Previously I have described the EU as like the Titanic. Despite warnings of impending problems and the need to reform, it will not change direction and we are lucky to be jumping ship. The trouble is, after a Budget like this, and with a Chequers Deal pending, the UK is in danger of becoming like the Marie Celeste – in touch of the new world, it is being left to drift with no-one at the helm. One hopes that once a credible deal is agreed the sense of direction will be clearer.

What about a no deal? Clearly we want to avoid a no deal, but a valid question is that the implied threat on the eve of the Budget that if there was no deal then the Chancellor would have to take action to make Britain universally competitive – including cutting taxes and easing the regulatory burden on firms, as well as to use fiscal policy to provide support to the economy – was a bizarre one. It must surely have been aimed at our EU neighbours, to encourage them to reach a deal.

But one wonders why this is couched in a threat and should it not be the focus of policy now – deal or no deal? Of course, the Chancellor is constrained from pushing this, while the negotiations are ongoing, but it should highlight that the UK should be in a better position once it can determine its own post-Brexit destiny. Of course, this makes it vital we do not box ourselves in with a Chequers-style deal and instead edge towards a free trade agreement like Canada Plus.

Photocredit: UK Parliament/Jessica Taylor

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