Philip Hammond continues to take advantage of the fallout of the financial crisis to shrivel the British state. The problem is that his policies are shrinking the economy faster
This country is supposed to leave the European Union in 2019. Just when Britain needs to muster all its resources, the Office for Budget Responsibility predicts the economy will grow at only 1.3% – half the rate it did a decade ago. Clearly, something has gone badly wrong. Yet instead of identifying the problem and fixing it, Conservative chancellors have made a bad situation worse by running perverse austerity programmes. Philip Hammond had a chance to change tack today and adopt a new economic model based on an activist fiscal policy which would boost public spending and produce the jobs people want and need. This would have been a message of hope and security in bewildering times.
But Mr Hammond was unmoved. Instead he labelled detractors of his austerity plans “Eeyores”, claiming he was more Tiggerish about the UK’s outlook. Pooh-like is a polite way of describing such unwarranted optimism. The chancellor’s plans for a sustainable recovery rest upon a combination of marketisation, public spending restraint – alleviated by some extra cash – and tax cuts. These are just the same failed austerity policies repackaged for a wearier age. The chancellor continues to take advantage of the fallout of the financial crisis to shrivel the state. His problem is that his policies are shrinking the economy faster.