Budget 2017: Chancellor tries Dixon of Dock Green act but it can't last

Brexit, the biggest risk facing the UK economy, barely merited a mention as Philip Hammond sought to reassure that all is well. Trouble is that act of self-immolation is coming

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It was the lion that didn’t roar. It barely even growled. Brexit, the biggest political issue facing this country, and by far the biggest risk to the continued health of its economy, was felt by the Chancellor Philip Hammond to merit only a brief mention at the beginning of his statement. 

So let’s bring it into the discussion.

Mr Hammond, as Chancellors are wont to do, was at pains to stress the relative economic health the UK currently enjoys. 

It has been outpacing most of its main rivals (with the notable exception of Germany) and the Office for Budgetary Responsibility has upped its growth forecast for this year (but lowered them for subsequent years). 

The point about that is, of course, that the UK remains a member of the European Union. Article 50 has yet to be invoked, and won’t be until the Government has managed to get its Brexit bill through the House of Lords. 

Now let’s say you buy into the notion that the UK is set fair. And let’s say you accept the relatively rosy view taken by the Office for Budgetary Responsibility when it comes to the next couple of years. 

The country has already put that at risk by taking an entirely unnecessary step. It is proposing to compound that by taking the most destructive path when it comes to leaving the EU, including leaving the single market.

Ministers appear to believe that the EU will allow us to have our cake and eat it if they shake their fists and issue lots of threats. Their approach is highly unlikely to prove effective. 

No wonder the Chancellor has talked about setting money aside to deal with the potential disruption that will come even if the UK manages to somehow obtain a relatively favourable outcome from the Brexit negotiations. 

It is because of the need to do that that he has raised taxes to deal with issues such as the dire need to inject funds into the creaking social care system, the problems of which have slopped over into the NHS creating a situation for which the overused adjective “crisis” is for once justified (the £2bn over three years extra funding that has been announced won’t be enough by the way).

He has also promised help to those businesses hit hardest by the revaluation exercise that will sharply increase what some pay in business rates. 

The tax increases include going back on a pledge in the Tory manifesto and raising national insurance on people in self employment, to 10 per cent next year and and 11 per cent in 2019, with the excuse being that their pension entitlements have been equalised with those in employment. 

But these people don't get sick pay and they don't get holiday pay. Moreover, it’s a kick where the sun doesn’t shine to all those in the gig economy, the self-employed workers for companies that treat them as employees without any of the benefits, and pay them little.

Bad enough to be exploited by those companies. Worse still when the Government kicks you in the teeth.

More justifiable is the reduction in the tax-free dividend allowance for those who work via personal service companies. 

However, even while the new spending announced has in theory been funded by these measures and others (we’ll know how well funded when the Institute for Fiscal Studies gives its verdict tomorrow) the Chancellor is still borrowing a lot. 

Mr Hammond’s predecessor, George Osborne, pledged to eliminate the budget deficit by the end of the last Parliament. Mr Hammond is proposing to borrow into the next once. So it's hard to see where he will find the money to set aside if things get really nasty, as they probably will. 

The rest of the Chancellor’s statement was sparse, and well trailed. Budget secrecy seems to have been all but abandoned. 

Business was happy with the emphasis on skills, and the new T-levels designed to help address the country's yawning skills gap. They'd better be effective, because Mr Hammond’s boss Theresa May has chosen to exacerbate pressure points in the labour market by cracking down on necessary immigration. 

Businesses also looked kindly upon commitments to improving digital connectivity, easier R&D tax credits, and a one-year delay to digital tax reporting for the very smallest firms. These measures partly offset some of the grousing about the dividend tax hike. But only partly.

There weren't many of the rabbits chancellors pull out of their hats to keep people interested while they speak, although a notable one was the gimmicky extra business rate help for pubs, which ought to keep Brexit big mouth Tim "Wetherspoons" Martin happy. 

Mr Hammond, who looks like an old school bank manager, and speaks like one, really needed a bit more than that to give his statement a bit of life. 

But perhaps that was the point. Perhaps the aim was to lull us all into thinking everything is ok, with the fiercest debates provoked by the aforementioned tax hikes. 

Actually Mr Hammond is not so much trying to be a bank manager as he is a latter day Dixon of Dock Green, an old school bobby who has left his panda car in the station having survived the austerity created job cuts. Move along now, nothing much to see here. But mind how you go. 

That act can’t last. Future budgets may be conducted in a more febrile atmosphere, and against a more difficult backdrop, with all those relatively rosy forecasts coming under pressure and even Mr Hammond’s friends in the business community screaming blue murder and calling for the Sweeney to sort out the mess.

Brexit will be roaring soon and because of it, Mr Hammond isn’t going to be able to get away with steady-as-we-go act for very much longer.