This blog tended to predict that Hammond would come forward with something bold and inspiring which would kick start a period of sustained growth independent of Brexit, driven by massive house building of affordable rental homes, modernization of hard infrastructure like roads, railways and hospitals and soft infrastructure as in broadband, 5 G, universal mobile cover everywhere and a skills upgrade across the piece. This would drive up economic activity so as to increase revenue and create enough income to fully fund public services, made even better if supported by taxation reform such as a turnover tax. He has failed to do this.
He needed to come up with a plan which would pump up to £500 billion into the economy over the next seven years, part borrowing, part DQE and part private. This would have sent a signal to the world and moreover to the British people, that GB was going to motor, whatever the direction, length or outcome of Brexit negotiations, to become the number one global choice to build a business. If soon matched by a similar reflation programme in Trump’s US, the global economic drive would pass back from China and a stagnating EU to the old Anglo-American couple who led the industrial revolution. At its heart it is a vision thing. Trump has it (rather surprisingly to many) but May hasn’t. She fusses and fiddles and soothes with platitudes.
So the nation is now engulfed in gloomy forecasts (why does anybody listen to this stuff and how on earth were we so stupid as to set these wild guesses onto a statutory basis?) and a little bit of this and that. £20 billion into infrastructure, a few houses, innovation and skills over five years. In an economy with a GDP of about £1.8 trillion annually and over five years £9 trillion, the effect at best can only be marginal, if visible at all. There was a tax tweak here and there; easing off the austerity package a little, but keeping it in force and bearing down on those with the least.
What this tells you is that, not only does this government have no clear idea about what it wants Brexit to look like, but neither has it a clue how to either safeguard the country from any economic shock, or worse, how to prepare it for a great leap forward. No wonder national productivity is so poor. Just look at the meagre output of the government.