The big story of the past week was, of course, the Budget, not Philip Hammond’s most wonderful time of the year. After his disastrous first budget which featured the quickest U-turn in history, he was trying to play it safe, and it worked. It barely made the news, and all his rivals looking to get him out of the job will have to postpone their plans for sabotage. It was a budget that was meant to appease as many individuals and parties as possible whether it be Theresa May, Brexiteers, or even young people, and it was the first of many Brexit budgets.
It was described by Robert Peston as the most boring budget of all he has covered, and on the surface, he’s correct, but there were some very un-boring and worrying undertones. The big announcements were the stamp duty charge changes, including abolishment for house purchases of under 300k, the changes to Universal credit, the extra funding for the NHS, and the extra money for Brexit preparation in case of a no deal situation. But the big story was the OBR forecasts, and the rather bleak economic outlook we have ahead of us.
Hammond announced stagnant GDP growth forecasts for the next five years: 1.4%, 1.3%, 1.3%, 1.5%, 1.6%, this compared to the 2.5% long-term growth rate forecast just two years ago before Brexit. This is the first time in modern history that economic growth is predicted to fall below 2% in every forecast year. Borrowing is continuing to grow, and the UK national debt continues to rise, almost double what it was when the Tories took over from Labour in 2010. The Tories continue to blame this mess on the previous Labour government, but the truth is that all of this is on them.
Time and time again the Tories put party interest and inner wars over the national interest, and this was no different. As the economy and prosperity continue to tank under them, Hammond put Brexit at the top of the bill, and it got more money than the NHS did! 3bn for no deal prep, and just 2.8bn increase for the NHS – compare this to the 40% increase Gordon Brown gave it in 2002. The money is much too short of the 4bn increase the NHS says it needs, and the chief executive of the NHS trust called it “too little, too late” as we head into what is now an annual winter crisis.
The bigger issue is – especially regarding the economy – is that we have absolutely no idea what Brexit will bring, but it’s likely to not be prosperous. The OBR has even affirmed this, saying that given the uncertainty regarding how the government will respond to Brexit negotiations they are still unable to condition forecasts appropriately. So, their terrible forecast doesn’t even properly factor in leaving the European Union! The Resolution Foundation suggested the downgraded forecasts would mean a £1,000 a year cut to an average families’ income, and we can’t even count in the costs to come.
The divorce bill for Brexit is yet to be decided, but the latest figure being mentioned is £40 billion, a third of the annual funding the NHS receives – so much for the extra £350 million a week! £2.1bn has already been put into the civil service budget, £517 million will need to be spent relocating the European Medicines Agency, and the two-new state department’s handling Brexit and international trade will cost taxpayers another £400+ million.
If anything, this was just the warm-up budget of those to come. As the forecasts and then effects of Brexit come into force over the next few years, budgets will be shaped around it and Britain tries to make it out on its own. The undertones of the budget should worry everyone, even leavers, but of course, that would be ‘talking the country down’. We are heading into an uncertain future, and it’s becoming clear that the country and the economy is not ready. If Hammond wanted this job to get any easier, he’s going to be waiting around for a long time.