Philip Hammond’s u-turn on proposed changes to National Insurance Contributions was the latest in a growing list of Budget measures to be withdrawn in the face of a parliamentary and media backlash. Jill Rutter and Alice Lilly argue that the exceptionalism of the Budget process makes it vulnerable to poor policy making. They propose a number of possible improvements, including the introduction of a Budget cabinet committee and greater support for parliament in scrutinising tax policy.
On March 8 Chancellor of the Exchequer Philip Hammond stood up to deliver his first – and last – spring Budget. He was in such a relaxed mood that he joked that the last Chancellor to claim a spring Budget was his final one (Norman Lamont) survived only ten weeks after his speech. Within hours, the government was reeling as their backbenchers and the press denounced a change to National Insurance Contributions for the self-employed, a measure that raised the fiscally relatively trivial sum of £400m and had been welcomed by the overwhelming majority of fiscal experts as a sensible minor reform.
The measure survived only a week before Hammond was forced back to the Commons to announce he was dropping the change – for this parliament at least. The Financial Times added the NIC u-turn to the ever-expanding list (£) of Budget rabbits that turned into hand grenades when unleashed – and exploded in the face of their instigator.
So why does the Chancellor, one of the most powerful figures in government, advised by people seen (not least by themselves) as the government’s crack policy troops, keep stepping on political and policy minefields – while finding their room for manoeuvre ever more constrained?