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By JACK BLANCHARD
PRESENTED BY SCHOOL CUTS
Good Tuesday morning.
Spotted: David Cameron and family at a Shell petrol station in Marton, near Middlesbrough, on Friday. Cameron came in looking for a cup of tea but settled for crisps, chocolate and a packet of mints. Naturally this fleeting visit gets a full write-up in the local paper, headlined: “David Cameron pops into Marton shop for Monster Munch and Tic Tacs treat.” The lot of an ex-prime minister is a strange one.
DRIVING THE DAY
PHIL YER BOOTS: Philip Hammond will tour TV and radio studios this morning after splashing the cash in his final scheduled budget before Brexit Day. The chancellor and his opposite number, John McDonnell, will do battle across the airwaves all morning before facing off in the Commons this afternoon as the budget debate gets underway. Hammond will be happy with the way the budget has landed so far, with few dissenting voices on the Tory backbenches and almost every paper warmly backing his remarkable spending splurge. But he will have one eye nervously on the all-important verdict from the Institute for Fiscal Studies, due to be unveiled at 1 p.m. As usual the biggest brains at Britain’s most-respected think tank have been toiling through the night to crunch the numbers buried inside the budget red book. If the 2018 budget is going to unravel, that is where it is most likely to happen.
First read this: You know by now what was in the budget, but the BBC has an at-a-glance guide here if you need a refresher. On POLITICO, Charlie Cooper and Cat Contiguglia reflect on Hammond’s underlying message. “The Brexit upside is just around the corner, Chancellor Philip Hammond said Monday — as long as the divorce is a smooth one.”
SCOOP — Public backs spending splurge: The chancellor gets a big boost this morning as the first post-budget opinion poll reveals significant public support for his central spending decisions. A snap poll for London Playbook undertaken by Hanbury Strategy last night found 56 percent of people backed the government’s decision to spend its unexpected tax windfall on public services, against just 12 percent who said Hammond should have used it to balance the books instead. And digging deeper, 57 percent agreed with the decision to pour all the money into the NHS — even if it means little or no extra money for services like police, schools or local authorities. Only 14 percent disagreed.
**A message from School Cuts: 17,942 schools in England face cuts. For months, headteachers, school staff, and parents have been sounding the alarm about the damaging impact on children’s education. Yesterday the chancellor presented his budget. Today School Cuts scrutinised it. See what it means for our schools.**
Happy days: Overall, almost a third of people (33 percent) said yesterday’s budget will be good for their family, against just 11 percent who said it will be bad news. Just over half said it will be neither good nor bad. Given how pessimistic these types of polls have been over recent years, the government will probably take that.
But but but: As my colleague Tom McTague writes in his story on the poll, Hammond’s other key message — that a good Brexit deal is vital to ensure future public investment — has not landed so well. A clear majority of people — almost 70 percent — accept a no-deal scenario will mean less money for public services, versus 31 percent who simply do not believe it. The big caveat, however, is 21 percent of people say that while they do fear a hit to public spending, this would ultimately be a price worth paying. Which added with those who think it would make no difference gives a theoretical 52 percent majority for a no-deal Brexit, if required. In contrast, 48 percent say a no-deal scenario would mean less money for public services, and that this is not a price worth paying. So it’s a 52/48 split, once again.
Break the internet: You will be unsurprised to hear there is overwhelming public backing for Hammond’s new digital services tax on the world’s biggest online firms. A whopping 94 percent said it was a good idea, with just over a third — 35 percent — concluding the £15 million-or-so that each tech giant is forecast to pay on average does not go far enough.
Nation of boozehounds: The really big question, of course, was whether Hammond was right to raise duty on wine yesterday while freezing it for beer and spirits. Asked which of the three they would rather increase taxes on, people marginally backed spirits (36 percent) over wine (32 percent) and beer (32 percent). The interesting split was on gender, with only 29 percent of women backing a tax hike on wine, versus 36 percent of men. Did Hammond deliver a “bloke’s budget” by mistake? The age split is also good — just 19 percent of young people backed a tax hike on spirits, compared to well over 40 percent of middle-aged and older people.
A quick note on the polling: This was a properly weighted opinion poll using Hanbury’s smartphone sampling technique. The sample size is relatively small — 500 people — due to the rapid turnaround time required to bring you a snap poll this morning. All the surveys were undertaken yesterday evening, after the Six O’Clock Newsh but before the News at Ten. The obvious caveat to all of the above is that people’s instant impressions can change rapidly in the days after the budget, as the real picture becomes clearer.
SPEAKING OF WHICH
AND NOW FOR THE BAD NEWS: The Resolution Foundation’s budget verdict is the other key independent assessment worth looking out for today, and is due to be published at around 7 a.m. Playbook has seen a sneak preview, and there are certainly some unhappy truths awaiting the Treasury. Crucially those big tax cuts for 32 million workers plastered across the front pages of the Sun and the Express, among others, are largely going to the best-paid people in society. The Resolution Foundation calculates a whopping 84 percent of the income tax cuts announced yesterday will go to the top half of the income distribution next year.
And there’s more: The think tank points out that while families will benefit for the £1.7-billion boost to Universal Credit by up to £630 each, there is still plenty of pain coming their way. The report concludes around half of the welfare cuts announced by George Osborne in 2015 have yet to be rolled out. Most of the benefit cuts aren’t related to UC, it says, and are still in place — the biggest single example being the working age benefit freeze, which is continuing next year.
An end to austerity? Don’t bet on it. The promises of extra spending on the NHS, defense and international aid mean unprotected departments will continue to see cuts in every year from 2020-21, the Resolution Foundation warns. It predicts per capita real-terms budgets are set to be 3 percent lower in 2023-24 than 2019-20. And on the wider economy, it says real average earnings are not set to return to their pre-crisis peak until the end of 2024 — representing an unprecedented 17-year pay downturn.
Then there’s this: The Mirror and HuffPost have both pulled together useful lists of all the bad news buried in the small print of the budget. The Mirror reckons it has found 13 things Philip Hammond won’t want you to read, including a pay rise for the queen and a tax on vaping. HuffPost highlights other areas including the extra £1 billion or so headed to Northern Ireland, which *might* just help persuade DUP MPs to vote for the budget when it comes before the House on Thursday.
But let’s face it: In the end this was a giveaway budget the likes of which we have not seen for years, and the lack of income-raising measures means there are unlikely to be too many serious complaints over the days ahead. In short, the chancellor got very lucky this month. The PM announced a huge increase in NHS spending, and just as Hammond was trying to figure out how to pay for it, the OBR dumped an enormous cash windfall in his lap. Indeed, the BBC’s Laura Kuenssberg reports May was aware of the OBR numbers before she made her “end of austerity” speech at the Tory conference in Birmingham at the start of this month.
You make your own luck: Playbook should of course point out that the Treasury insists this was not luck, but in fact the proceeds of growth triggered by “Britain’s jobs miracle.” But still — the timing was pretty bloody jammy.
Where do we go from here? The bigger picture is that by doling out cash to key areas of interest to Tory MPs — tax cuts, fuel duty, the high street, defense — Hammond has kept his backbenchers largely on side (Sarah Wollaston being an honorable exception). The £1-billion extra headed across to Northern Ireland will likely do the same for the DUP. If the chancellor’s main aim is simply to get this budget through, ahead of this winter’s real showdown — the vote on the final Brexit deal — then he has likely achieved it.
WHAT THE PAPERS ARE SAYING
The Sun: Britain’s best-selling paper mocks up Hammond as a superhero and dubs him “Mr Increditable” after delivering “the biggest giveaway by any chancellor in a generation.” It hails the income tax cuts as a “boost for Brit workers,” praises the Universal Credit “rescue package” and laps up the tax on tech giants who are “sucking the lifeblood from British high streets.” (Mark Zuckerberg even gets mocked up as a vampire.) The Sun’s leader column begins: “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.”
The FT: The paper of business sounds somewhat less convinced by “an old-fashioned giveaway budget” that was “as much about politics as economics.” It warns of “risks” behind the decision to spend rather than bank the OBR windfall, and suggests measures to boost productivity fall short of what was required. “The judgement is that Brexit trumps all,” the leader column concludes. “The result is a budget that leaves questions unanswered.”
The Daily Mail: Hammond’s longtime foe — now under new management, as you may have heard — ticks off the wins for its readers with glee. Many of the paper’s hobbyhorse issues were addressed yesterday, with help for the high streets, a new tax on plastic packaging and an attack on the hated online tech firms. Throw in some tax cuts for middle England and the odd £1 billion for defense and the mood on Derry Street could hardly be happier. “This was the day Eeyore transformed himself into Feelgood Phil,” the paper beams. The decision to abandon — sorry, delay — a balanced budget gets a brief tut-tut, but is “positively trivial” compared to the “grotesque prospect” of Labour’s spending plans.
The Daily Mirror: “Is that it?” the front page headline of the left-wing tabloid complains. “Beware of politicians bearing gifts,” the leader column concludes inside the paper. “Austerity isn’t finished. The Tory clampdown is still in place, as spending on most public services will continue to fall per head. Hammond pretending otherwise was political posturing.”
The rest: The Times notes drily that Hammond is “proving to be a lucky chancellor” after the the OBR dug him out of a large NHS-shaped hole. The Guardian insists despite Hammond’s rhetoric, “austerity remains this government’s animating impulse.” The Telegraph has mild praise for a “pragmatic” budget, though is somewhat vexed about the hike in wine duties. The Express says the income tax cuts mean “everyone’s a winner,” while grumbling at the lack of new thinking on housing or social care. But it concludes Hammond “might just be the right man at the right time to guide Britain through choppy waters in the coming months.” … As with the Mail, it’s not a line you’d have read under the old regime.
WHAT THE COLUMNISTS ARE SAYING
Henry Mance: “It was a long, arduous period that had tested the patience of the British people,” Mance writes in his terrifically brutal FT sketch. “But finally the era of Philip Hammond trying to be funny was over. Monday’s 72-minute budget was littered with jokes, which the chancellor delivered with all the aplomb of a heavily sedated undertaker.”
Rupert Harrison: Also in the FT, George Osborne’s old chief of staff says the end of austerity is a risky business. “The U.K. has successfully dealt with the dangerously high budget deficit that the coalition government inherited in 2010,” he writes. “But in the process it seems to have exhausted the political will required to reliably reduce the high levels of public debt that are the inevitable legacy of that deficit. As a result Britain’s economic strategy is now based largely on hope: that the fickle gods of Brexit and the global economic cycle will give us enough time to reduce the debt burden slowly before the next serious downturn.”
Rachel Sylvester: The Times’ star columnist says this budget was nothing more than a holding position as we await the outcome of Brexit. “Yesterday’s statement was in truth a limbo budget from a zombie administration,” she writes. “There was more extra money for potholes than for schools, and greater clarity on the refurbishment of village halls than on the reform of social care. Apart from an eye-catching tax on tech giants — which if it only raises £400 million a year cannot be as radical as it sounds — the chancellor is in a Brexit holding position.”
William Hague: “Crucially, Philip Hammond decided to use some of the windfall of higher forecast tax revenues to reduce income taxes,” the former Tory leader writes approvingly in the Telegraph. “In doing so he is maintaining a vital distinction between a Tory government and the Labour alternative to it, and is helping to arrest a drift into all parties being seen as vehicles for higher taxation — a drift that could only ever work to the advantage of the Left.”
Polly Toynbee: “This was a traditional Tory budget, with benefits still frozen for the poorest while three-quarters of the winnings from raising personal tax allowances flow to the top half of earners,” Toynbee fumes in the Guardian. “All those ‘strivers, grafters and carers’ Hammond praised in his speech can see it all around them — in closed libraries, Sure Starts and day centres, in operations delayed, GP appointments as rare as gold dust, everywhere creeping public squalor … This was a budget to bodge things with sticking plaster, put fires out with a watering can, and making do while failing to mend.”
Quentin Letts: The Daily Mail’s legendary sketchwriter does not seem to have got the memo about the paper’s sudden appreciation of the virtues of the Remain-supporting chancellor. “Office dullard seizes the karaoke microphone,” Letts writes of Hammond’s performance. “Westminster’s prize bore fancies himself Mister Showbiz … If he only put as much effort into Brexit as he does into his budget performances, we’d have been out of the EU by now.” It’s well worth your time.
MEANWHILE IN OSLO
ARCTIC BLAST: Theresa May is in Norway today for a conference with Scandinavian and Baltic state leaders, and you can bet your bottom dollar that Brexit will be the main thing on her mind. The PM is expected to squeeze in bilats with at least three EU27 leaders today — from Denmark, Estonia and Finland — plus two more EFTA states to boot — Norway and Iceland. Expect her to press the need for further compromise from the EU side, both on the Irish border issue and the future relationship.
Beauty parade: Keep an eye out for a rather odd group press conference at the end of the Northern Future Forum (as it’s known) at around lunchtime today. The PM and the other leaders will line up together for questions from the European media. Given Britain’s relative size you’d imagine May will be singled out for a question or two, though there’s no way of knowing for sure.
PM speech: May then heads off into a separate summit known as the Nordic Council, alongside Norwegian Prime Minister Erna Solberg. May is due to make an on-camera speech at around 1.30 p.m. U.K. time, although No. 10 is playing down its significance. But you never know.
TODAY IN WESTMINSTER
PARLIAMENT: Sits today at 11.30 a.m. with an hour of Foreign Office questions.
TAXI FOR UBER: Ride-hailing app Uber is at the Court of Appeal today to challenge a ruling that its drivers are actually employees rather than self-employed workers. If the ruling stands it would mean drivers are entitled to a wealth of employment rights including the minimum wage and paid holidays. It’s being seen as something of a test case for the gig economy, and you’d have to imagine it’s going to end up in the Supreme Court.
TECH TALK: Speaking of tech giants, officials from Facebook, Google and Microsoft are before the Lords communications committee this afternoon to discuss the regulation of the internet. Hopefully their lordships will ask for their verdict on the chancellor’s new digital services tax too. The hearing kicks off at 3.15 p.m.
ALSO ON COMMITTEE CORRIDOR: Treasury Minister John Glen MP, Security Minister Ben Wallace MP and Solicitor General Robert Buckland discuss economic crime before the Commons Treasury committee at 10 a.m. … Business and defense ministers and senior officials appear before a joint hearing of the Commons business and defense committees at 10.45 a.m. to discuss national security investment … and Immigration Minister Caroline Nokes joins the bosses of key agencies including HMRC, the Border Force and the National Crime Agency for a juicy-looking session before the Commons home affairs committee at 1.30 p.m. on preparing for Brexit.
NOW HEAR THIS: A beautiful snippet of the U.K. parliament choir rehearsing in Westminster Hall last night, ahead of tomorrow’s armistice concert featuring the German Bundestag choir. Watch the clip.
DD AND THE BRAIN: Former Brexit Secretary David Davis is in conversation this evening with the man they dub the “Brexiteers’ brain,” Shanker Singham. The event kicks off at the IEA at 6.30 p.m.
**A message from School Cuts: Since 2015, schools in England have lost £2 billion per year in real-terms funding. This has spurred a crisis in children’s education as headteachers and school staff confront impossible decisions to make ends meet. While the Government says it is putting more money into education than ever before, independent watchdogs have challenged this claim. In July, the Institute for Fiscal Studies reported school spending per pupil has dropped by 8 percent in real terms since 2010. In October, the U.K. Statistics Authority raised “serious concerns” about the Government’s presentation of school funding statistics. Parents are watching: Survation found 750,000 voters switched support at the 2017 General Election as a result of school cuts. Yesterday’s budget was an opportunity for the Government to change course and properly fund education. Find out if the 2018 budget has changed anything for schools.**
Chancellor Philip Hammond broadcast round: ITV Good Morning Britain (7.20 a.m.) … BBC Breakfast (7.40 a.m.) … LBC Radio (7.50 a.m.) … Today program (8.10 a.m.) … Sky News (10 a.m.)
Shadow Chancellor John McDonnell broadcast round: ITV Good Morning Britain (6.45 a.m.) … BBC Breakfast (7.10 a.m.) … Today program (7.30 a.m.) … Sky Sunrise (7.50 a.m.) … TalkRADIO (8.05 a.m.) … BBC Radio 5 Live (8.10 a.m.).
Also on the Today program: Institute for Fiscal Studies Director Paul Johnson (7.09 a.m.) … Torsten Bell, director of the Resolution Foundation think tank, and Simon Harris, chief executive of Citizens Advice Staffordshire North and Stoke-on-Trent (8.30 a.m.) … SNP in Westminster leader Ian Blackford (8.40 a.m.).
Also on TalkRADIO: Commons culture committee Chairman Damian Collins (7.05 a.m.) … Former Defense Secretary Michael Fallon (8.10 a.m.) … Treasury Minister John Glen (9.05 a.m.) … With analysis throughout from Tory MP Andrea Jenkyns and anti-Brexit campaigner James McGrory.
All Out Politics (Sky News, 10 a.m.): Chancellor Philip Hammond (pre-recorded, 10 a.m.) … Big Issue Editor Paul McNamee and Institute for Government Director Bronwen Maddox review the newspaper comment sections (10.15 a.m.) … Tory MP John Penrose, Labour MP Shabana Mahmood, Lib Dem peer Susan Kramer and SNP MP Stewart Hosie debate the budget (10.30 a.m.) … Author Christopher Jackson discusses his new book on Theresa May (10.45 a.m.).
Politics Live (BBC2, 12.15 p.m.): Tory MP and Treasury aide Kwasi Kwarteng … Shadow Housing Minister Sarah Jones … Columnist and comedian Ayesha Hazarika … Former CBI boss Digby Jones.
Iain Dale in the Evening (LBC Radio): Communication Workers Union boss Dave Ward (8 p.m.).
Reviewing the papers tonight: BBC News (10.45 p.m. & 11.30 p.m.) The Telegraph’s deputy political editor, Steven Swinford, and comedian and columnist Ayesha Hazarika … Sky News (10.30 p.m. & 11.30 p.m.): TLS Editor Stig Abell and the Telegraph’s Brexit Editor Dia Chakravarty.
TODAY’S FRONT PAGES
(Click on the publication’s name to see its front page.)
City A.M.: Hammond’s helping hand.
Daily Express: Tax cuts for 32 million.
Daily Mail (not online): Phil-good factor!
Daily Mirror: Is that it? Budget — A great con job.
Daily Star: Pulp friction — Blacked-up party-goer sparks race row on train.
Financial Times:Hammond’s giveaway clouded by Brexit.
HuffPost: Buried in the budget.
i: Hammond eases up on big squeeze.
Metro: Tricks and treats — Fiscal Phil splashes the cash.
The Daily Telegraph: Taxpayers handed Brexit bonus.
The Guardian: Delivered — A budget of tax cuts and spending to shore up May.
The Independent: No-deal Brexit would scupper austerity pledge.
The Sun: No tricks … Just treats. Giveaway spells end to austerity.
The Times: Hammond’s giveaway gamble.
On the Continent: Read what the rest of Europe’s papers are saying in POLITICO’s EU press review blog here (updated daily at around 8 a.m.).
BEYOND THE M25
AUF WIEDERSEHEN: Just in case you were hiding under a rock yesterday, Europe’s most powerful politician announced she will be stepping down in 2021 — if not before. POLITICO’s man in Berlin Matthew Karnitschnig writes that while Angela Merkel’s departure was inevitable, it now injects further instability into German politics. “The decision increases the likelihood that Merkel’s grand coalition with the Social Democrats (SPD), already hanging by a thread, will collapse in the coming months,” he concludes. POLITICO’s Janosch Delcker examines what’s next for Merkel.
From across Europe
CONTINENTAL DIVIDE: This Twitter thread by Conrad Hackett of Pew Research offers fascinating insights into the cultural views of people in different EU nations. Highly recommended.
BORDER FORCE: Donald Trump is deploying more than 5,000 American troops to the U.S. southern border to stop migrants crossing into the country. He is being accused of stoking up tensions ahead of next week’s crucial midterm elections. The Guardian has more.
Westminster weather: ☁️☁️☁️ A cloudy day with highs of 9C. Dull as ditchwater.
Travel: No service on the Jubilee line between Stanmore and Wembley Park due to a faulty train at Queensbury.
Gong throng: Many congrats to the political hacks nominated for this year’s British Journalism Awards. The shortlist was published yesterday, and includes the Channel 4 Dispatches team … Sky News’ Faisal Islam … the Sunday Times’ Insight team … The FT’s Laura Hughes … The Sunday Times’ Tim Shipman … And the Daily Record’s David Clegg and Kevin Mansi … London Playbook will get its reward in heaven, I guess.
Happy birthday to: Central Suffolk MP Dan Poulter, who turns 40 … Department of Health Permanent Secretary Chris Wormald, who turns 50 … Labour peer David Triesman, who turns 75 … Labour MEP Clare Moody … POLITICO’s own Annabelle Dickson … The Times’ Brussels Correspondent Bruno Waterfield … The Institute for Government’s Jill Rutter … and Ivanka Trump, who turns 37.
PLAYBOOK COULDN’T HAPPEN WITHOUT: My editor Zoya Sheftalovich.
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