Chancellor Philip Hammond should seize opportunity presented by budget surplus

The political and economic cases for loosening the purse strings are equally strong

The public finances are improving for Chancellor Philip Hammond (AFP/Getty)

A boost for Philip Hammond? The news that the UK has recorded its biggest July budget surplus in 18 years certainly looks that way.

There’s £2bn burning a hole in the Chancellor’s back pocket. What’s not to like for the occupant of Number 11 Downing Street?

Here’s the thing with pretty roses like that all that money: they come with thorns.

The prickly problem for Mr Hammond is that he will be facing ever louder calls to spend, spend, spend.

Some of them, notably those from the hard right in the Brexiteer wing of his disunited party, will be motivated entirely by a cynical desire to make his life difficult.

But there are also entirely legitimate political and economic arguments for him to ease the straps of the spending straight jacket Britain has worn since the end of the financial crisis.

The cash and recruitment crises facing the NHS have been widely reported. But the government's continuing policy of austerity is also having a detrimental impact on eduction, the civil service, the police, and many other parts of the public sector, notably local government.

The story of Northamptonshire County Council’s woes took on a new twist this week as it emerged that NEA Properties, a company owned by the Conservative run authority, splurged on a hospitality box at a rugby club and hired a string quartet shortly before the authority effectively went bust.

The optics could scarcely be worse.

However, Northamptonshire is hardly the only local authority with its back up against the wall. Similarly embarrassing stories will doubtless emerge from other Conservative councils if action isn't taken to ease their funding woes.

Central government cannot, and will not, escape a share of the blame for them if it refuses to act.

Brexit, shmexit. As my colleague Will Gore persuasively argued yesterday, while the government has been busy tearing itself and the country apart over that issue, there are many other problems that are not being addressed, problems that have a more immediate impact on voters' lives and perceptions.

Northamptonshire, the devastating report into what has been happening at Birmingham Prison, the local hospital cancelling appointments, the inability to even get one at the GP's surgery, or just the number of potholes in the roads, all of them are contributing to rising public angst, and no wonder.

Set against them, Jeremy Corbyn’s argument that Britain should be willing borrow if that’s what it takes to address the issues being thrown up by a decade of austerity looks increasingly persuasive.

No the Chancellor can’t fix everything, and certainly not with £2bn. Yes the country faces a potentially brutal economic hit as a result of the insanity being pursued by the treacherous Brexiteers sitting around him on the Government benches that will cost the country very dear. The economy will require public money to help it weather that unnecessary storm, and perhaps lots of it.

But Mr Hammond can’t afford to be too cautious.

The improvement in the public finances presents him with an opportunity. The political and economic cases for him to take it are equally compelling.

For the sake of the country, its public services, and its economy, he should do so, and outflank his critics in process.