Will the real Tory economic powerhouse please stand up?

By Alex Smith / @alexsmith1982

This is Philip Hammond, whom ConservativeHome say will be a “very powerful Deputy Chancellor” if the Tories win the next election. Mike Smithson even thinks it’s a fair bet he’ll be a Tory Chancellor at some point.

Hammond himself recently said that if the Tories get in, he’s “likely to become a great figure to pin up on the dartboard, and throw darts at. I am sure there will be short-term pain and brickbats.”

So while ConHome celebrate their scytheman, it’s only right that we look at the other side of the Hammond coin:

Talking about the economic cycle with Jeremy Paxman on Newsnight on 19th May, 2008:

JP: What ought to be the tax burden as a proportion of GDP?

PH: Well I’m not going to sit here and set out some theological percentage of GDP…

JP: Well should it be higher or lower than what it is now?

PH: …we’ll make sure that the size of government grows more slowly than the economy overall.

JP: Bit of a problem when growth is projected to be slow, isn’t it?

PH: No this is over an economic cycle, no one…

JP: How are you defining an economic cycle?

PH: Well an economic cycle is defined in, you know, economic text books. We know what the economic cycle is.

JP: Could you just explain it for those of us who don’t spend our bedtime reading consuming economics textbooks. What is an economic cycle?

PH: Well it’s over the cycle where we first of all have, erm, economic growth going faster than the trend rate of growth and closing the output gap and there’s a period when the output gap is widening…

JP: Are we about to start one of these cycles?

PH: Over, well it’s not for me to say where we are in relation to the…

JP: You’re the economic secretary to the Treasury in the next government?

PH: It’s not for me to say where we are in relation to the economic cycle, that’s something that the statisticians will tell us invariably after the event where we are in relation to…

JP: Oh after the event? So somebody after the event will tell you where you were in the economic cycle so that you can then make some prediction about growth upon which you’ll make tax forecasts?

PH: It’s not a prediction about growth. We have a trend rate of growth and over the economic cycle the economy will grow at that trend rate, over the cycle. But there will be…

JP: You can’t tell us what an economic cycle is apparently!

PH: There will be a curve where it’s growing for part of the time more slowly than the trend rate and for part of the time more quickly than the trend rate.

JP: You keep on going on about this cycle…

PH: Yes.

JP: For the benefit of viewers who might be slightly confused about what this cycle is, can you tell us roughly where we are in it and roughly when the cycle began and roughly when it will end so we can get some picture of what you’re talking about, or don’t you know?

PH: No I can’t tell you when the economic cycle will end…

JP: You don’t know?

PH: Er, I don’t know and nor does anybody else know when the cycle will end.

JP: In that case isn’t it a rather fatuous prediction?

PH: Well, but I mean, Jeremy, you know, get a panel of economists and ask them when the economic cycle will end, some of them may hazard a guess but none of them will know.

JP: But they’re not telling us how they’re going to fix the economy and you are!

—

Talking to Andrew Neil about quangos on the Daily Politics on 6th July, 2009:

AN: So how many do you think you’ll get rid of?

PH: Well this isn’t a crude bonfire of the quangos. What David has said this morning is there are some quangos which we will need to keep because they do jobs which are properly at arms’ length from government. There are others which will need to be radically reformed and there are some which can be scrapped altogether..

AN: So how many will you get rid of?

PH: We’re working our way through that process.

AN: So how many will you get rid of?

PH: I don’t have a total number, we don’t know yet at this stage…

AN: You’ve been in opposition 12 years. Has it only just dawned on you to cut quangos?

PH: All my spending departmental colleagues are looking at the quangos that answer to their departments and categorising them into these three categories.

AN: How many will you create?

PH: Well we haven’t said that we won’t create any new bodies, for example the Office of Budget Responsibility…

AN: So that’s a new one you will create.

PH: It’s a key part of our plan to create a fiscal…

AN: No I understand the purpose, but it’s a quango. Office of Tax Simplification?

PH: Er, the Office of Tax Simplification also a key part of our plans.

AN: So that’s two. An Australian-style sports commission?

PH: An Australian-style sports commission?

AN: You promised that too.

PH: Er, ok. But…

AN: So that’s three.

PH: OK, but Andrew but the point is every body whether existing or proposed will have to pass the test that David has set out this morning…

AN: Yeah but you propose them. A Skills Advisory Service?

PH: They will have to pass the test that David has set out…

AN: So that’s another quango.

PH: …this morning. Do they perform a technical function that happens to be done at arms-length from government, do they perform an allocation function which needs to be politically impartial or do they perform a transparency function like the Office of National Statistics…

AN: A Defence Export Services organisation, that’s another one you’re going to create?

PH: Well that’s a body frankly that existed that existed until very recently…

AN: So you’ll create another quango?

PH: the government has folded it in to another body and we’re saying that it needs to continue to operate in order to support our…

AN: I’m sure there’s good reasons for it all, creating these 17 new quangos that you promised…

PH: Andrew we’re talking about 1,100 quangos in total…

AN: Yeah but you can’t…I’ve got 17 here you’re going to create if you get into power. You can’t give me 17 you’re going to get rid of.

PH: I can promise you it will be a lot more than 17.

AN: Well give me 17?

PH: Well David’s announced two this morning…

AN: Right, so far you’ve got net 15?

PH: I can’t promise you about the Potato Board because we haven’t looked in detail at that yet but we all know there are hundreds of quangos that we know no longer need to operate independently, at arms-length from government.

AN: Your leader says the average pay of the 20 top quango chiefs, the average pay is £658,000.

PH: That’s right.

AN: Who’s getting £658,000?

PH: Er, well, I mean, this includes bodies like the BBC, it includes some of the…

AN: So you’re going to get rid of the BBC?

PH: No. But this includes the top…

AN: Do you think the BBC’s a quango?

PH: It includes the top 20 non-departmental bodies, the average pay is £658,000…

AN: Well tell me excluding the BBC, which we agree is not a quango, right? It may be many things but it’s not a quango. Correct?

PH: Yes.

AN: Do you agree with that?

PH: Yep.

AN: Right so it shouldn’t be included there. Tell me a quango in the definition that Anita gave us, in the Quasi-Autonomous Non-Government Organisation. Tell me a quango chief on that definition that gets £658,000?

PH: Andrew I haven’t got the list in my head but the average pay of the top 20 is £658,000…

AN: So you can’t tell me who’s earning that amount of money, you can’t tell me the quangos you’ll get rid of, but you can tell me the 17 new ones that you’re going to create. Why am I sceptical about this?