This government has two big interconnected challenges. The first is, to quote the Prime Minister, to make a success of Brexit. The second is to see off the threat posed by Jeremy Corbyn, John McDonnell and a Labour Party now dominated by the far-left.
In both cases the government is in a bind. On the one hand, Corbyn and Brexit bring with them significant amounts of political and economic uncertainty. And so the government is acutely aware that it cannot afford to put a foot wrong. On the other hand, there is something to the argument that the Conservatives will never make a success of Brexit or defeat Corbyn if they go about government with a softly, softly safety-first attitude. According to this theory, boldness – and a collection of game-changing policies – are the order of the day.
What is true of the government’s predicament in general, is true of the Chancellor in particular as he prepares to unveil the budget in the House of Commons next Wednesday. Two recent budgets – Hammond’s own earlier this year and Osborne’s 2012 omnishambles budget – are reminders that a chancellor’s first job is to avoid any unforced errors. Hammond doesn’t exactly have much money – or a big majority – to play with. But some argue that fundamental weaknesses in the economy require decisive action and radical solutions. To further raise the stakes, Hammond’s colleagues have pinned their hopes on the budget as a turnaround moment for the Conservatives after a torrid few months for the party.
Will the Chancellor deliver the bold and brilliant budget? Or will it blow up in his face?
For this week’s episode of Free Exchange, CapX collected together four leading policy experts to discuss what the chancellor should – and shouldn’t – do on Wednesday.
Daniel Mahoney is Deputy Director and Head of Research at the Centre for Policy Studies
Alan Lockey is Head of the Modern Economy Programme at Demos
Julian Jessop is Chief Economist at the Institute of Economic Affairs
Alex Wild is Research Director of the Taxpayers’ Alliance
You can listen to the full episode here, or subscribe via iTunes.