18 Jun 2018

Cabinet ministers ask for ‘more’

Don’t expect all the damage on tax rises to fund the NHS in the Budget this Autumn. Philip Hammond is not planning to spell out the full tax bill for Theresa May’s generosity in one sweep.

Government sources say that all taxes are on the table for consideration.

Mr Hammond faced a not so subtle move on his kitty today at Cabinet. Sajid Javid and Gavin Williamson were amongst those signalling that if the cake just got bigger then they would like a slice of it. Mr Hammond insisted that this was a one-off act of generosity and if ministers wanted more largesse they should make sure the UK economy remains buoyant and back his type of Soft Brexit.

Mr Hammond also said that the Brexit dividend (a concept he has previously told colleagues he thinks is intellectually bankrupt but which he has signed up to for the sake of unity) was now spent. The Chancellor insists that his fiscal rules are still in place and must remain so. One spending department minister at the Cabinet table today said Mr Hammond wasn’t convincing: “The fiscal rules have been completely rewritten by this.”

Mr Hammond will hate that talk but will have his work cut out pushing back against it. Tory MPs have divided for some time into those who say “you have to turn the taps on” and those for whom that is abhorrent. The former have had the momentum and now have a mighty gain.

One aide of Mrs May’s has been telling pro-Remain MPs that the “Brexit Dividend” line will help get “buy-in” from the hard line Brexiteers as they have to swallow a Brexit softer than their worst nightmares. As one minister pointed out, “conjurors aren’t meant to show how the trick works.”

At the despatch box this afternoon, Health Secretary Jeremy Hunt sounded like he was doing a market trader’s routine. “Not 15% (more spending than Labour,” not 20, FIFTY.” One Cabinet minister said moving on to Labour’s spending terrain held no fears. “We will push them on to other terrain,” the minster said. And that’s more or less what Mr Hunt suggested in the Commons when he said he fully expected Labour to outbid his own spending.

But if your USP as a party is prudence, how far can you push that? If you’ve notionally set a limit in answer to that question can you actually hold the line under pressure? With today’s big political chess play, Mrs May has advanced the day when we find out.

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