The Treasury took some welcome measures to ease that shock, stepping in with an emergency cut in interest rates and expansionist measures to mitigate the problem. One problem with forecasting is timing. If we get a hard Brexit, I do not think my hon. Friend will be dismissing quite so lightly the forebodings of the Treasury. I agree that some of the leading figures in the remain campaign turned the whole thing into a bit of a farce by talking about Budgets putting up taxes and so on in two or three months’ time, but I did not echo that and nobody else did. Also, it was not as bad as most of the quite dishonest arguments being put forward by the leave campaign about the millions of Turks who were coming here, but I will leave that to one side.
The Brexit deal will have consequences for our immediate economic future. I want a soft Brexit, if we have to leave. I want no new barriers to our trade and investment and no new customs arrangements; I want regulatory convergence and open borders to continue with our major market, but we may not get there—no one knows. I have added in all the other uncertainties in the global economy at the moment. We are all being sustained by an American boom, which may be quite short lived, as these fiscally induced booms usually are. Recession is not impossible in the next two or three years, and we have to make sure, first, that we avoid it and, secondly, that we are prepared for the warning signals when they come.
So I hope I can be persuaded that the Chancellor has retained some firepower in case the economy risks going off, and I hope he will manage expectations. We
are all enjoying this Budget, but the key public spending decisions are going to be in the public expenditure round in 2019 and 2020. Nobody should be led to expect that vast sums are necessarily going to be forthcoming then, and we need to manage expectations.
What slightly worried me were what I thought were presentational errors made in the run-up to this Budget. Had I been Chancellor, I would not have agreed that £200 billion for the health service should be announced on an inconsequential date a few months ago and then have been left with the Budget to explain how we pay for it. If we had put the two together, the health service spending would have been the highlight of this Budget, because it is a very welcome and very important decision. The public were braced to pay something towards it. The first reaction is that some other taxpayer should pay, but we could have given ourselves more firepower and maintained our direction on debt by raising some taxes towards it. But they are the only reservations I raise.
Budgets often are popular at first but they are forgotten by Christmas—even mine. What matters is where the economy is in two or three years’ time, and I hope the Chief Secretary will tell me that the Government have not lost sight of that.
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