Does Budget giveaway hint at early election fears?
Philip Hammond and Theresa May forced to deny rumours that tax cuts and spending hikes mean vote in the offing
Philip Hammond’s giveaway Budget has increased speculation about the possibility of an early general election.
Among the chancellor’s announcements for the next fiscal year was the surprising decision to bring forward a planned income tax cut from April 2020 to April 2019. The Government will also spend billions in extra cash generated by a stronger than predicted economy, instead of using it to pay off the UK’s debts.
It was “an old-fashioned giveaway budget” that was “as much about politics as economics”, said the Financial Times. That view is echoed in The Sun’s leader column, which said: “We’re in shock. Years of grim, penny-pinching budgets and the most cautious chancellor in living memory did not prepare us for yesterday’s feast of crowd-pleasing giveaways.”
Perhaps the biggest question is “why Hammond sought to bring forward tax giveaways via raising the thresholds”, says Sky News’s Ian King, who notes that “these are the kind of things that are normally done by a chancellor in an election year”.
That notion of a possible election on the horizon was picked up by a number of commentators including the New Statesman’s Stephen Bush, who described the Budget as one that shows a Conservative Party “that is rediscovering the art of servicing its electoral coalition at the expense of everyone else”.
Bush argues that this bid to win over voters is evident in the “hefty tax cuts for the higher earners that defected to Labour in 2017, the reversal of Universal Credit cuts for the lower income voters it picked up in 2017, and an attempt to change the political question from one about whether the present economic model needs to change (an argument Labour wins) to one over who is the most competent and effective manager of a change in the economic model: an argument whose outcome is somewhat more uncertain”.
Labour peer Lord Wood appears to agree with that assessment, tweeting: “This feels like Philip Hammond’s attempt at a pre-election Budget. Which makes me think we are going to have an election in 2019.”
However, when asked if the Budget was a marker for a possible general election, Hammond told ITV’s Good Morning Britain: “I hope not. What we are preparing for is Britain’s future.”
Prime Minister Theresa May doubled down on Hammond’s words, telling reporters that “we not preparing for another general election as that would not be in the national interest”.
But that, of course, may not be up to her if Brexit negotiation break down, precipitating a general election.
Indeed “Hammond’s giveaways, combined with frequent mentions of higher taxes under a Labour government, smacked of an administration which fears a disorderly Brexit and the threat of a general election”, says the Financial Times’s Claer Barrett.