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29 October 2018

Theresa May and Philip Hammond’s rows over austerity expose the government’s great weakness

Unlike David Cameron, the Prime Minister is working against, not with, her Chancellor. 

By Patrick Maguire

Philip Hammond has sought to stress one thing above all else ahead of this afternoon’s Budget. According to the Chancellor, any increase in public spending – or, as Theresa May prefers to call it, the end of austerity – will be conditional on the United Kingdom securing a good Brexit deal.

That was the message Hammond sought to hammer home in a series of broadcast interviews yesterday. Pointlessly, it turns out: a matter of hours before the Chancellor’s statement, Downing Street has contradicted him in the plainest possible terms.

Asked whether any moves to ease austerity would in fact be conditional on the outcome of negotiations with Brussels, the Prime Minister’s official spokesman said: “All of the spending commitments that the Chancellor will set out today are funded irrespective of a deal.”

The only way to do that in the event of a no-deal Brexit would, realistically, be to tax or borrow more. Neither option is likely to get the pulses of the Chancellor or most of the Tory parliamentary party racing, which in of itself is significant.

That the Prime Minister has picked the hymn sheet whose tune is most discordant from the one Hammond is playing underlines one of the great weaknesses of her government: there is no unity of purpose between Downing Street and the Treasury. It’s one of the many things that explains her failure to pursue anything like a coherent political project in the way that David Cameron and George Osborne, essentially joint premiers, did.

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Message indiscipline within cabinet has been the primary symptom of May’s terminal lack of authority, and the frequency with which she has found herself at odds with her Chancellor on fundamental questions such as this is arguably its most serious manifestation. Without the Treasury on side, a prime minister can’t turn their rhetoric into something that bears at least a passing resemblance to reality. Instead, May is working against, rather than with her Chancellor – one of the reasons why the Budget promises more pain than gain.