Nick Clegg's change of strategy on infrastructure spending had already been announced

It was in the Coalition's mid-term review.

As the IMF calls for  Plan B, everyone has got very excited that Nick Clegg has come out and said he thinks cutting spending on infrastructure went too fast at the start – and maybe needs addressing. "It’s another coalition split" goes up the cry…

But it’s not you know. The change in strategy had already been announced. It’s just everyone missed it.

As I said a few weeks ago, the mid-term review marked a shift in the coalition’s priorities. A seismic shift.

The original coalition agreement made one thing very clear. Every pledge, every promise, every plan promised in the manifestos and the agreement itself, would be secondary to one basic principle – that being that

“The deficit reduction programme takes precedence over any of the measures in this agreement”

and I suspect most commentators think that is still the stated priority of the government. Quite a lot of Members of Parliament probably think that too

But it isn’t, you know.

It changed on 7 January. Now, the new coalition agreement or mid-term review says…

“Dealing with the deficit may have been our first task, but our most important task is to build a stronger, more balanced economy”

Which is quite a different thing.

It sounds like the goal now is investment. It’s growth. It’s a boost to the supply side of the economy.

Nick was just re-stating what’s already been announced.

Plan B.

Nick Clegg. Photograph: Getty Images

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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How austere will Philip Hammond be?

The Chancellor must choose between softening or abandoning George Osborne's approach in his Autumn Statement. 

After becoming Chancellor, Philip Hammond was swift to confirm that George Osborne's budget surplus target would be abandoned. The move was hailed by some as the beginning of a new era of fiscal policy - but it was more modest than it appeared. Rather than a statement of principle, the abandonment of the 2019-20 target was merely an acceptance of reality. In the absence of additional spending cuts or tax rises, it would inevitably be missed (as Osborne himself recognised following the EU referendum). The decision did not represent, as some suggested, "the end of austerity".

Ahead of his first Autumn Statement on 23 November, the defining choice facing Hammond is whether to make a more radical break. As a new Resolution Foundation report notes, the Chancellor could either delay the surplus target (the conservative option) or embrace an alternative goal. Were he to seek a current budget suplus, rather than an overall one (as Labour pledged at the last general election), Hammond would avoid the need for further austerity and give himself up to £17bn of headroom. This would allow him to borrow for investment and to provide support for the "just managing" families (as Theresa May calls them) who will be squeezed by the continuing benefits freeze.

Alternatively, should Hammond merely delay Osborne's surplus target by a year (to 2020-21), he would be forced to impose an additional £9bn of tax rises or spending cuts. Were he to reject any further fiscal tightening, a surplus would not be achieved until 2023-24 - too late to be politically relevant. 

The most logical option, as the Resolution Foundation concludes, is for Hammond to target a current surplus. But since entering office, both he and May have emphasised their continuing commitment to fiscal conservatism ("He talks about austerity – I call it living within our means," the latter told Jeremy Corbyn at her first PMQs). For Hammond to abandon the goal of the UK's first budget surplus since 2001-02 would be a defining moment. 

George Eaton is political editor of the New Statesman.