Hammond Calls Colleagues ‘Extremists’

Speaking to Sky News, the Chancellor said that tonight’s confidence vote will be won by the Prime Minister, and serve to “flush out the extremists” in his party. Guido isn’t sure that calling dozens of colleagues ‘extremists’ is the best way to endear them to May’s administration… 

Hammond Stumped on Crucial Backstop Question

Attorney General Geoffrey Cox’s legal advice to the Cabinet on the Northern Irish backstop was finally revealed to the public today, though on the basis of Philip Hammond’s appearance at the Treasury Select Committee this morning, Guido is not certain that the Cabinet have read it in that much detail themselves.

Under questioning from the SNP’s Stewart Hosie, the Chancellor failed to answer a pretty fundamental question on whether the backstop would mean that that the EU could offer third countries access to the UK’s market without the UK getting access to the third country’s market in return, as is the case with Turkey today.

As this 2016 European Parliament report on Turkey makes clear, third countries “do not have any obligation to conclude such agreements with Turkey. Indeed, it is more advantageous for these countries not to conclude preferential agreements with Turkey because they already have access to the Turkish market through the EU-Turkey CU.” This morning Hosie asked Hammond if this humiliating one sided arrangement would also apply to the UK under the backstop. He couldn’t answer…

Caption Contest (Rescue Edition)

Treasury Modelling Based Off Nonsense Assumptions

The Treasury’s modelling is notoriously dodgy. So dodgy in fact that in 2010 George Osborne set up the independent Office for Budget Responsibility to provide less political analysis than the hyper-political plaything of the chancellor of the day.

Economist Andrew Lilico has pointed out that in its analysis, the Treasury makes three remarkable assumptions.

  • Assumes there is no economic gain at all from controlling our own policy compared with the EU doing it.
  • Assumes there is no gain from “Future domestic policy choices.”
  • Assumes GDP gains from new trade deals with non-EU countries are only 10% of what the EU estimated those gains would be.

These are clearly ludicrous assumptions as no credible economist assumes there are zero economic gains to be made from liberating companies from EU red tape. This further exposes the Treasury as a political tool not a serious economic body.

Guido remembers the Treasury’s bogus analysis during the referendum….

“Britain’s economy would be tipped into a year-long recession, with at least 500,000 jobs lost and GDP around 3.6% lower, following a vote to leave the EU, new Treasury analysis launched today by the Prime Minister and Chancellor shows.”

In February of this year, Cambridge academics concluded that most of the economic impact assessments before the referendum were “flawed”, and that the Treasury’s analysis was particularly bad.

“The short-term forecasts of the Treasury and OECD, which have turned out to be wrong, have further damaged the already weak public confidence in economists’ contributions to public debate.”

Wrong then, wrong now…

Hammond Slaps Down Rudd: “It Could Be No Deal”

Last night on his new show, ITV’s Robert Peston asked the Chancellor whether May’s deal being voted down by Parliament could lead to a ‘no deal’ scenario.

 “If Nicky [Morgan] and Amber Rudd are right and we’re not going to get no deal, you’re spending a colossal amount of money for something that’s not going to happen…”

Slapping down Amber Rudd’s assertion that Parliament would somehow “stop no deal,” Spreadsheet Phil told Peston that if the withdrawal agreement is voted down the UK would be in unknown territory, confirming that “it could be no deal.” Cabinet unity still going strong then…

UN-Loving Snowflakes Accuse May of Undermining Rules-Based International Order

The snowflakes at the United Nations Association have had a hissy fit to accompany the visit of another UN special rapporteur to the UK in order to fill Guardian column inches investigate “extreme poverty”, releasing a patronising note to warn British journalists of the “consequences” of “negative media coverage during a special rapporteur’s visit”Terrible when an international organisation has to face some level of scrutiny…

They have also compiled a list of eight egregious examples of British politicians “engaging in rhetoric which undermines the value placed on the rules-based international order”. It features no fewer than two separate accusations against Prime Minister Theresa May and one against Philip Hammond, for such heinous crimes as criticising tank-chasing lawyers and daring to accuse a UN body of making a “ridiculous” finding. Send them to The Hague!

Former Foreign Minister Sir Huge Swire is also named and shamed as one of the top British saboteurs of the international legal order… for tweeting this adorable picture of him cuddling his dog:

It’s not like the UN has any more serious instances of countries undermining the international rule of law to be worrying about. Oh, wait…

UPDATE: An earlier version of this article referred to the United Nations as the easily-offended organisation – it was in fact the United Nations Association.

Batten Gets Gregg-on-Face

UKIP’s astute new leader has fallen for joke twitter account called “GuardianMemeWin“. The account describes itself as “the most insufferable newspaper parody account ever” in its twitter bio. Batten’s analysis was retweeted by the official UKIP twitter account…

Beleaguered Batten is not the only one to have fallen foul of a fake account. Yesterday evening CCHQ retweeted a fake, unverified Philip Hammond account. It even spelled his first name incorrectly…

After making that mistake too many times Guido tends to block parody accounts…

Front Page Phil Good Factor

The Treasury will be happy with the coverage the Chancellor got this morning. So far the budget hasn’t unravelled, because the ambiguity of the budget has meant the Labour counter attack and Corbyn’s irrelevant response are getting no traction. The commentariat is unclear if it really signals the end of austerity or not, it certainly signalled a slowing in the urgency of the effort to close the deficit…

Budget: The Think Tanks’ Verdict

Hammond appears to have avoided a Halloween horror show with several popular announcements including a freeze on beer, cider and spirits duty and bringing the income tax threshold rise forward to next April. However, fiscal hawks are alarmed at the rate of fiscal expansion. Here’s what the wonks made of it…

The Centre for Policy Studies is happy for now but calls for a more radical Budget post-Brexit:

“The focus on the end of austerity, giving hard working people more money in their pockets through tax cuts for 32 million people, and the largest ever increase in NHS spending without any rise in personal tax are hugely welcome. However we hope the Government pushes a more radical agenda that delivers for ordinary people once the Brexit deal is complete.”

The TaxPayers’ Alliance is broadly positive but calls for more serious tax reform:

“Increases in the personal allowance and higher rate income tax thresholds, with freezes to taxes on beer, cider, fuel and short-haul flights, will give much-needed breathing space to hard-pressed taxpayers. That said, the tax burden overall will be still be increasing. And to truly seize the opportunities afforded by Brexit, we should be looking at a much more serious and overdue reform of the tax code.”

The Adam Smith Institute is significantly less impressed, calling it a “botched budget”:

“What the Chancellor gave with one hand though, he took with the other as he hit firms large and small that make capital losses by restricting their exemptions—meaning less risk taking, less profit and fewer economic dividends… A digital revenue tax—lifted straight from the Corbynite playbook—will punish the millions of people who shop online and use online services every day.”

The Institute of Economic Affairs also takes aim at the “Fiddly Budget”:

“More broadly, it was a Budget littered with spending commitments across the board. In an attempt to signal the ‘end of austerity’, it appears this government has given up on deficit elimination… Fiscal responsibility is being sidelined, giving way to short-term giveaways and unaffordable pledges.”

As the Office for Budget Responsibility points out, the Government would have been on course to balance the books by 2023 with the unexpected fiscal windfall this year, but has spent it all already:

“Buoyant tax receipts and an improved outlook for employment have delivered the Government a significant fiscal windfall since March, sufficient to deliver its objective of a balanced budget by 2025. But this had already been swallowed up by the Prime Minister’s promise of more money for the NHS in June, to which the Chancellor has added a further near-term tax and spending giveaway. This leaves the medium-term outlook for government borrowing little changed since March.”

Balancing the budget was meant to be this Government’s fiscal priority, yet this Budget puts it firmly on the back burner…

Phil’s Potty Mouth

Big Phil spent over a minute making jokes about his mandatory business rates relief for public lavatories. There are some real groaners here…

Why is Hammond in Politics?

Phil Hammond says…

“I didn’t come into politics to raise taxes.”

Budget Photo 2018


The lady in red, Liz Truss, is wearing a £245 “Forever dress” from British designer, Karen Millen. The rest of the Treasury team are in dark grey suits.

Will this be Hammond’s last budget?

HM Treasury’s Morning View

Guido has given Rich the morning off and instead we are running the official Treasury budget day cartoon. A fitting memento for his last budget. The artist appears to have caught the personality of the Chancellor perfectly; flat and grey with spreadsheet to hand…

Hammond on No Deal Impact

“If we leave with no deal we will be in a different set of circumstances and it would require a different approach.”

Hammond: I Believe in Universal Credit

Hammond: No Deal Means New Budget

“If we were to find ourselves in that situation then we would need to take a different approach to the future of Britain’s economy.”

This is clearest sign from the Chancellor since January 2017 that a no deal Brexit would make the UK the tax haven of Europe

Hammond Can’t Back Brexit

 

Three times Big Phil Hammond was asked on Good Morning Britain whether he thought Brexit was a good idea, and three times he completely dodged the question:

PM: “Do you think Brexit is a good idea?”

PH: “Yes, the British people have determined that we are leaving the EU. Our challenge as a Government…”

PM: “So just to clarify… do you personally believe this is a very good idea for the country and that it will work?”

PH: “I have already answered your question. I’m a democrat, so I believe we should do what the British people have decided…”

PM: “But that’s not what my question is… do you personally, as the Chancellor… believe that this is a good thing for the country that we’re doing, and do you personally think it will be successful and a positive thing for the country…?”

PH: “…Delivering the plan that Theresa May has set out…”

As Theresa May herself said, “you can only deliver Brexit if you believe in Brexit”. How does she expect to be able to do that if her Chancellor doesn’t agree?

Hammond’s Halloween Budget

It’s set to be All Hammond’s Eve next month as Philip Hammond has decided to go for October 29th as the date for this year’s Budget – just two days before Halloween. He’ll be hoping the voters don’t get spooked…

Guido can already imagine the headlines. Will it be a Halloween Horror Show or Death to Taxes?

‘Operation Yellowhammer’ Picture Leaked Accidentally On Purpose?

Another careless aide has been snapped in Downing Street flashing a Treasury briefing about no deal Brexit planning. The planning has been dubbed ‘Operation Yellowhammer’ and appears to show penny-pinching mandarins at the Treasury encouraging departments to fund no deal planning through “internal reprioritisation”, despite £3 billion having already been set aside for no-deal planning in the last budget by a reluctant Philip Hammond. Some speculation that it was accidently on-purpose rather than cock-up…

UPDATE: It now emerges that the indiscreet note-carrier was not a hapless aide but in fact Treasury Minister John Glen. Either he’s cunning or a bit of a clutz…

Hammond Hires Taxpayers’ Alliance Alumna Sonia Khan

Guido can reveal that Chancellor Philip Hammond has hired Sonia Khan to join his team as a media SpAd working alongside Poppy Trowbridge. Hammond’s other media SpAd Giles Winn will be moving into a broader SpAd role. Khan has held a number of press roles around Whitehall, most recently press secretary to Liam Fox in the Department for International Trade.[…] Read the rest

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Quote of the Day

George Freeman on Jeremy Corbyn’s Brexit Position:

“The Leader of the Opposition’s Position is crystal clear – he’s for Leave up north and Remain down south.”

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