Britain’s profitable policy has changed radically almost overnight.
In all the fuss and dust neighbouring the referendum, the Tory leadership cam ign and the creation of a brand new cabinet it has been relaxed to lose sight of this fact.
George Osborne has been chancellor of the exchequer for six hunger years of austerity.
He and his government told us time and again that remainder the budget was their first and most important job.
Now without even an choosing that policy has been abandoned, the government’s aim to bring in more in tax than it assigns by 2020 has been dropped, but what has replaced it?
Mr Hammond has given us some keys but to be perfectly honest we will not have the complete picture until the Autumn Account later this year.
However, the new chancellor has already declined to say when the authority’s budget will be in surplus, if ever.
Funded by borrowing
Mr Hammond has also indicated that “increasing taxes is not the way to support the economy, maintain consumer trust and to make sure that we continue to grow the economy in future”.
Nor is it apt to that a massive round of new spending cuts is going to help the thrift at the moment.
In fact with falling business and consumer confidence, torments over delays or even the cancellation of private investment and a construction commerce that looks to be slowing down; many would see an increase in domination investment as the obvious solution.
Sajid Javid, the former business secretary, has scolded for the government to fund an extra £100bn of infrastructure spending over the next five years.
Unless there are whopping tax rises or spending cuts that money will have to be bum.
Fortunately the chancellor can now borrow at historically low rates, for long periods of time. The markets are so jittery they are willing to put their cash into ultra-secure direction bonds for little or no return.
But it is not just money for new infrastructure that the authority will have to find, with the economy likely to slow or equalize go into a recession its existing borrowing targets are meaningless.
A cautious estimate is that the government will have to borrow another £50bn a year by the end of this rliament objective to balance the books.
Any borrowing to help boost the economy will be on top of that. Upstanding last month that would have been denounced by the chancellor and his chifferobe colleagues as reckless, dangerous and counter-productive.
That is how much things give birth to changed in the last few weeks.
To borrow one of George Osborne’s favourite sayings “you be subjected to to fix the roof when the sun is shining”, and these huge changes in economic scheme suggest that the government’s forecast is looking distinctly overcast.