Public Policy

October 30, 2018

Budget 2018 analysis


Instinctif Partners’ Budget 2018 chart provides an insight into positioning of the key policy decisions made by the Chancellor in yesterday’s Budget.

Keen to avoid Halloween metaphors, Chancellor Philip Hammond treated the nation to a collection of minor spending increases in his 2018 Budget, in an attempt to signal a ‘nearing the end’ of austerity. However, as commentators have picked up, Hammond has played a trick to head-off Labour’s key policy critiques and occupy more of their policy space. Indeed, this was a more political budget than those delivered with Hammond’s previous stints at the dispatch box, and whilst promising a move away from austerity, it was – in its political aspect – somewhat closer to those delivered by George Osborne when he had occupied Number 11.

The chart below plots the key policy decisions from each area of the Budget, judging their impact on government revenue as well as how far they see government intervening in markets. It shows how the bulk of the increase in core spending is focused on health, social care and defence – perhaps unavoidably so. Yet, in addition to giving himself the wriggle room to bring forward more spending in the event of a difficult Brexit, the Chancellor has also attempted to address a number of topical issues with relatively little money – offering support to high streets, small businesses, and infrastructure development, as well as encouraging greater home ownership. Meanwhile, the tax-raising efforts are targeted – almost limited – at popular measures such as making tech giants pay more tax, addressing plastic pollution and clamping down on tax avoidance.

Therefore, it may be judged as less of a ‘tax-and-spend’ budget and more of spend-and-attack’ budget, putting the Conservatives on firmer ground against Labour. However, whether this will prove to be Hammond’s last Budget remains to be seen.

Click below for our infographic analysis of the 2018 Budget:

Instinctif Partners Budget 2018-1