The memo was a passive and reserved show of defiance. Earlier in the summer, the Bank of England’s Brexit bazooka (with which governor Mark Carney fired off a fresh range of stimulus measures) provoked many people to ask – “where is the chancellor? Why is the government not responding to the threat of a post-referendum downturn with an emergency Budget of its own?”
Philip Hammond’s patience appears to have been justified by a sharp improvement in economic data – few City analysts believe that the UK is tumbling into recession, and some argue that Carney acted too soon. But it also shows Hammond's willingness to stay calm and avoid the temptation of the limelight.
Unfortunately, the same cannot be said of his predecessor, who insisted on holding numerous budgets (sometimes three within a 10-month period) during which he would reel off a string of tinkering, micro-managing fiscal tweaks alongside a couple of grandstanding policy announcements designed to make him look like a Prime Minister in waiting. George Osborne’s approach, in this sense, was not radically different from that of Gordon Brown.
Such frequent interventionism resulted in ill-considered policies that later unravelled or forced the government into embarrassing U-turns – the pasty tax, the caravan tax, cuts to tax credits, cuts to disability benefits, the help-to-buy ISA, the plan to force all schools to become academies, and so on. It is a shame, because Osborne’s liberal instincts (to reduce tax on low and middle earners, to lower corporation tax, to eliminate the deficit, to defend freedom of movement...) are preferable to the current Prime Minister’s more statist philosophy.
Whichever direction the new government takes, one must hope that Hammond's appointment ushers in a return to stable and steady management of the public finances. Budgets should be used to gradually simplify the UK's fiscal policies, rather than to unleash wave after wave of further complexities. At least two US Presidents (Eisenhower and Reagan) were fond of the phrase “Don’t just do something – stand there!” It should be pinned to the walls of every room in the Treasury.