George Osborne Is Gone, But Osbornomics Is Not Forgotten: Reaction To Autumn Statement 2016

Philip Hammond’s most interesting announcement was the Autumn Statement will be his last as well as his first – the Budget will switch to spring from autumn, and spring will see only a fiscal and economic update rather than any policy changes. This is a well-crafted effort by Hammond to present himself, in contrast to his predecessor George Osborne, as a more sober, sombre and cautious Chancellor of the Exchequer – just the kind of finance minister Britain needs in this period of turmoil. In reality, however, Hammond is doing a very good impression of Osborne on the substance of fiscal policy.

Hammond has tweaked Osborne’s fiscal rules to give himself a little more room for manoeuvre given the expected economic impact of Brexit. As such, he is promising now to achieve budget surplus at some point in the next parliament – rather similar to John McDonnell’s promise, despite the Conservatives’ persistent demonisation of Labour statecraft. McDonnell’s promise is itself rather similar to Ed Balls’ promise, despite Labour’s persistent demonisation of New Labour.

Osborne’s rules were of course always rather flexible, since he was simply able to postpone the date at which they would be met. The illusory idea that fiscal policy should be governed by rules remains firmly in place, and Hammond’s success in cornering Labour into valorising fiscal discipline, even under a leader elected (twice) on a radical anti-austerity platform, is one indebted to the Osborne playbook. Austerity is no longer in vogue, but austerity politics is here to stay.

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