Inherent to the idea of “economy” are trade-offs. More of this for less of that. Voters live with trade-offs in their personal finances, as do politicians faced with the larger canvas of the national budget. They can spend more on one cause, at the cost of tax rises, debt or cuts elsewhere. They can protect workers at the risk of blunted incentives to hire. They can intervene to raise productivity at the risk of market distortion and waste. The number of absolute win-win policies, anywhere, ever, is near nil.
It is Philip Hammond’s bad luck to retain a grown up’s sense of economic management as an imperfectible art just as his party loses its. Of all the problems that Tories have with their chancellor of the exchequer, his lack of enthusiasm for an EU exit is not foremost. Nor is his poor political touch, a fair but incongruous criticism from the Conservative right, which has still not constituted the leadership of a majority-winning Tory party since 1987.
No, they want him gone because of his caution. A bolder chancellor, they say, would implement howlingly obvious policies – on skills, housing, industry – to prime Britain for life after exit. A source told the Sunday Times that the Budget Hammond gives on Wednesday has “got to be big, it’s got to be powerful, it’s got to be revolutionary”, in that portentous syntax I thought our species had reserved for things worth saying.
There is one good reason to sack Hammond. His removal, or rather his replacement by one of his critics, would throw the burden of action on to Westminster’s biggest talkers. It would force them to show rather than tell. It might even teach them some respect for the innate difficulty of government. At the moment, they talk a scintillating but unspecific game about economic reform. Control of the Treasury would force them to answer the following:
When easy-sounding ideas do not happen, it is because they are not easy
Which policies? On what evidential basis? At what fiscal cost? At what political cost? With which perverse effects, offset in which ways? In the remote past, namely 2015, these questions constituted the minimum intellectual test of economic propositions. Smart, decent politicians were discredited through numerical sloppiness at the margins.
The test is now increasingly waived. British politics is not post-truth, yet, but it is post-rigour. Any chancer can win an audience for a screed against Britain’s dysfunctional economic model, as though other countries do not make ugly trade-offs in their own economies, as though there is a big bag of genius ideas leading to positive-sum outcomes that our rulers are too proud or myopic to open.
All so plausible in the abstract, all so complex in the specificities, all so arduous in the execution
There is even something of a learn-by-rote manifesto for the blagging radical. You might know it: the government must make technical training the prestigious equal of scholarship, blend health and social care to accommodate an ageing population, expand housing for the young, support the industries of the future (we all know what those are), improve productivity (because no one has ever tried) and pay for it all with taxes on assets rather than incomes, and build the whole thing on the greenbelt.
Idle talk
All so plausible in the abstract, all so complex in the specificities, all so arduous in the execution. When easy-sounding ideas do not happen, it is because they are not easy. The point of institutions such as the Treasury, and men such as Hammond, is to filter idle talk about big, powerful revolutions into practical action that does not beggar the country, bring down the government or make other things worse.
The Conservative right's exile from the Treasury for more than a generation (Norman Lamont, from 1990 to 1993, was the last of its chancellors) has been a disaster for its own intellectual rigour. Hammond's critics are not knaves, they are just wafflers. They overrate the power of government to transform economies without incurring costs, fatal unpopularity or perverse consequences. Cynical, we call them, as they scheme against him, but in truth their signature flaw is a kind of innocence.
On Wednesday, they want him to spend more money on housing and skills while setting some aside for the contingency of an abrupt exit from the EU, without raising taxes (an act that almost brought him down in the spring) or losing sight of the deficit. After these fiscal preliminaries, they want him to announce all the self-evident policies for national renewal that those malingerers who work on economic management every day have somehow never entertained.
It is the pie-in-the-sky thinking of activists. And that, in a sense, is what the economic right of the Tory party have become after decades away from the chancellor’s desk. Their return would be, if nothing else, an education. – Copyright The Financial Times Limited 2017