The story of this Spring Statement is that welfare has been cut back to make up for a notable rise in the cost of servicing the national debt. There is also a trim to the money being given to government departments.
There is relatively little else actually happening in policy terms. There were no tax rises, no changes to Chancellor Rachel Reeves’ borrowing rules and as expected, this was definitely not a Budget.
The real question now is whether the chancellor can escape from a never-ending cycle of microhaggling with the government’s independent forecaster the Office for Budget Responsibility (OBR) in this way, twice a year for the rest of the Parliament.
When asked about whether new tax rises could now come in the Autumn like last year, she said emphatically: “We’ll never have to do a Budget like that again.”
But the numbers are precarious and extremely sensitive to the economic and political changes around the world.
If the US imposes 20% tariffs on the UK next week, it could lead to a downgrade in UK growth and “wipe out” the £9.9bn headroom the chancellor has to meet her borrowing rule, the OBR chairman, Richard Hughes, told me.
Other uncertainties include higher interest rates and lower UK productivity, he said, adding that “the risks are very elevated”.
That is why growth, confidence, and comprehensive economic strategy is so important.
By June there should be new plans for trade, industry and infrastructure. In the next few weeks, there could be an economic deal with the US, and the start of a Brexit reset with the EU.
Despite the uncertainties, the OBR’s judgement on the economy was better than had been expected. This year’s growth was downgraded, but close to normal levels of growth are predicted to return in later years.
The OBR’s acknowledgment that the government’s planning reforms could significantly boost house building, was seen as a major win in Downing Street.
It’s a policy that doesn’t involve taxes or spending yet is expected to provide a huge boost to growth.
At this stage this is not about an extra brick being laid or even planning approval, but it is a “spreadsheet win” that eased the chancellor’s fiscal pain.
This comes as a result of local authority housing targets and council land being freed up.
When the Planning and Infrastructure Bill passes later this year, which strips back judicial reviews, there should be a further increase in predicted growth.
But the test is obviously actual spades and diggers in the ground and architects’ plans being approved. This government is now all-in on Bob the Builder.
There was some accountancy-driven cunning. Lists of public defence-related spending up and down the UK came from the unconstrained capital budget for buildings, which is basically exempt from the chancellor’s non-negotiable financial rule to only borrow to fund day to day spending.
But the cuts to welfare are very real. The 250,000 increase in people in poverty due to the cuts to health-related benefits does not include the impact of recipients getting new jobs.
The Impact Assessment seems to confirm that the aim of the policy is more about saving cash than fundamental reform.
In this and in other areas questions arise about whether the “OBR tail wags the policy dog” – i.e. is this really the way long-term policy should be formed?
The big picture is that all of this becomes a lot easier if growth returns and interest costs calm.
In the dreams of Number 11, while we assume the debate in autumn will be about what further tax rises are required, it is possible that by the time of October’s Budget, they may not be needed.
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