Support 100 years of independent journalism.

  1. Business
  2. Economics
29 October 2018

Theresa May’s promise to end austerity has written a cheque her Chancellor can’t cash

The difficulty for Philip Hammond is that he also has to honour the other half of her conference promise: that debt will continue to fall as a share of GDP.

By Stephen Bush

What’s in the box? We’ll find out at 15:30 GMT this afternoon when Philip Hammond stands up to speak but what we know so far is that there will be £20bn more for the NHS, with £2bn of that earmarked for mental health services, extra money for Universal Credit, extra largesse for road-building and repair, plus a continued freeze in fuel duty, and a special commemorative 50p coin to mark Brexit. 

Speaking of Brexit, there will also be plenty of promises of jam tomorrow if negotiations with the European Union go to plan. But in the present day, the Budget is going to fall far short of Theresa May’s promise that austerity will end and the difficulty for Hammond is that he also has to honour the other half of her conference promise: that debt will continue to fall as a share of GDP. To do that, he’d need to pass significant increases in taxation, which tends to be difficult in a hung parliament (and don’t forget, he couldn’t carry off even a modest tax increase in the 2015-7 parliament). 

The PM’s promise has written a cheque that the Chancellor can’t cash and the advanced leaks about the contents of the Budget mean that it looks unlikely that there will be much good news in this afternoon’s statement that we don’t already know about. A long week could lie ahead for Hammond and May. 

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

Content from our partners
How to create a responsible form of “buy now, pay later”
“Unions are helping improve conditions for drivers like me”
Transport is the core of levelling up