Contact us: +44 (0) 20 3033 3870

Spring Budget 2017: Steady as she goes

8 March 2017

​“Our task today is to take the next steps in preparing Britain for a global future”, declared Chancellor Philip Hammond as he delivered his first and final Spring Budget speech.

Keenly aware of his place within the pantheon of politicians past, he joked at the outset about the historical precedent to this announcement, calling on his colleagues implicitly for a little forbearance.

And well he might wish to, with central themes designed to temper angry critiques on several crucial economic issues.

The biggest announcements of the 2017 Spring Budget represented reactions to areas of substantial discontent – the NHS, hobbled by a growing crisis, and business rates, subject to a campaign of press discontent and backbench chastisement as the impact of upcoming reforms was fully revealed.

The SNP’s Angus Robertson was swift to chastise the Government for giving “not a single mention” to Brexit – but in truth, while the Chancellor might not have uttered the word itself, his Budget was laden with explicit and implicit references to the UK’s journey out of the EU.

From his declaration that the measures were designed to provide “a strong and stable platform” for departure negotiations to the section devoted to raising UK productivity through measures including a new technical education system, the Spring Budget reflected some of the principal anxieties produced by the prospect of changing trade and immigration rules

 While Labour Leader Jeremy Corbyn’s reaction to the Budget was focused on the big picture ideological stuff of austerity, organised labour and public services – including the Islington North MP’s cherished local libraries – his right-hand man Shadow Chancellor John McDonnell was quick to seize on a more pragmatic objection.

“Tory tax hikes whilst doing nothing to address the crisis in our NHS”, he tweeted, highlighting the item perhaps most likely to stick in the throat of those otherwise inclined to support the Government and its economic approach.

The Chancellor’s decision to increase National Insurance contributions by the self-employed – while justified in the language of fairness as a means of equalising treatment with employees in firms – will be seen by detractors as a violation of the Conservatives’ pledge not to raise NICs.

While a reduction in the tax-free allowance for dividend income was equally positioned as a means of increasing equity in tax treatment, it may get similarly short shrift from supporters of small business.

Though undoubtedly a Chancellor with a very different style from his predecessor, there were some signs of the old Osborne style on display in the speech, such as a populist decision specifically to offer a majority of pubs special business rate reliefs.

However, this gesture will be overshadowed by rises in the duty on alcohol, and on the whole, the speech was greeted by less of the furious bellowing and barracking that characterised the Budgets of the Osborne years.

This is partly a sign of a party untroubled by leadership intrigue, still determinedly if fractiously united behind its powerful leader and uninterested in gimmickry in the face of a weak Opposition.

But it equally speaks to the motivations behind the measures – an anxiety brought on by the clear and present Brexit threat. While Philip Hammond may lack his forebear’s obvious leadership machinations, his Budget remarks were heavy with an acute awareness of the hand of history

Get the whole story

Discover every important announcement with DeHavilland's definitive sector-by-sector Spring Budget 2017 Roundup Briefing. Click here to download the briefing now.

DeHavilland's Policy Team

DeHavilland's Policy Executives enable our clients to cut through the noise and assess changes to the political landscape.