At last year’s Conservative Party conference, Philip Hammond delivered a masterclass in how not to take on Jeremy Corbyn. In a hackneyed speech, he accused Labour of wanting to take Britain back “to the 1970s”, invoked Cuba, Zimbabwe and Venezuela and dismissed Corbyn and John McDonnell as Marxist dinosaurs.
This year, the Chancellor was notably more circumspect. He acknowledged “that too many people feel that they have lost control, that they are working for the system but the system isn’t working for them.” Though he maintained that “Labour’s answers will solve nothing”, he added that “their questions deserve a response” and warned that the Tories were destined for defeat if they appeared “the party of ‘no change’”.
The problem for Hammond is how few alternative answers he offered. He ridiculed Labour’s programme: “Railways? Nationalise them. Wealth? Confiscate it. Run out of money? Just borrow more.” But opinion polls consistently show that all of these policies – railway renationalisation, higher wealth taxes, and greater infrastructure investment – are supported by the overwhelming majority of voters. (One could also note that the Tories, ironically, have nationalised the East Coast Mainline, increased wealth taxes and borrowed hundreds of billions more than promised.)
Having earlier acknowledged British capitalism’s flaws, Hammond went on to laud the system all the same: record employment, a budget deficit below 2 per cent, eight years of sustained economic growth. All true, but the same economy has also delivered the worst decade for living standards since the Napoleonic Wars, rising household debt and enfeebled public services.
To these defects, Hammond offered few solutions. He implicitly acknowledged that young people would not become capitalists without owning capital, but said little about how housebuilding would be increased. He repeated the promise of higher funding for the NHS, while maintaining that austerity would have to continue elsewhere. Only the spectre of a no-deal Brexit led him to promise “fiscal firepower” if needed.
Unlike some of his Brexiteer colleagues, Hammond, a Remainer, recognises the risks of EU withdrawal. He stated obvious yet now provocative truths: “we will be neighbours”, “Europe remains, by far, our biggest market”. He confidently asserted that Theresa May would reach a Brexit agreement and boasted of a future “deal dividend” to the economy.
Yet after nearly a decade of austerity, this is merely redolent of David Cameron and George Osborne’s past promise of “sunlit uplands”. To Hammond’s insistence that only capitalism can protect “the long-term interest of our country and our people”, the voters increasingly have a Keynesian response: “in the long-run we are all dead”.