Philip Hammond's speech: what we learned

Former Foreign Secretary Philip Hammond

The chancellor pledged new investment in help-to-buy and the “northern powerhouse”, but much of Philip Hammond’s speech to the Conservative conference in Manchester was dedicated to a full-scale attack on Labour and the party’s economic policies.

The Conservatives are very worried about Labour

Hammond’s speech was striking in how much was dedicated to attacking Jeremy Corbyn and John McDonnell – calling them “dinosaurs who had broken out of their cases”. He spent most of the first half of his speech talking about the 1970s and Britain as “the sick man of Europe”, as well as the political regimes of Cuba, Venezuela and Zimbabwe.

Hammond said the party’s popularity was based on “preying on people’s worries, manipulating their fears, luring them with false promises … It’s a wicked and cynical business offering superficially simple solutions to complex challenges”.

However, he said the Tories must “acknowledge the weariness at the long slog back from Labour’s recession” without specifically mentioning austerity.

Conservatives must re-make the arguments for capitalism and free trade

Hammond made a similar argument that the prime minister made in her speech to the Bank of England last week, that the Conservatives needed to restore people’s faith in capitalism. He said Conservatives had to “step forward and make those arguments again because a new generation is being tempted down a dangerous path”.

He said the Tories needed to show that Britain’s economy was working – to counter McDonnell’s claim that the economy is “fundamentally broken”.

Extra investment for the north of England

Hammond’s main announcement was an additional £300m “to future-proof the railway network in the north” and ensure HS2 infrastructure can link up with future rail projects. The pledge will be aimed to counter the fury after plans for rail electrification in the Lake District and the Midlands were scrapped in July along with the modernisation of the Cardiff-Swansea line after massive budget overruns.

The announcement, which came at the same time as Crossrail 2 in London was given the green light, led to accusations that the Conservatives had ditched their commitment to the northern powerhouse.

Economic, but not political, closeness to the EU

Hammond drew a clear distinction between Britain’s economy, which he said would “remain closely linked with the EU for many good reasons”, and its politics, saying the UK’s “political future will be our own”.

His speech was light on Brexit policy detail, but he also warned the government must be “clear-eyed about the challenges” of leaving the EU, just as his cabinet colleague Liam Fox called for an end to “a damaging, pessimistic view of our future” at a fringe meeting, and blamed the Financial Times and the BBC for a lack of optimism.

Home ownership is the way to win over young people

Hammond made a staunch defence of help-to-buy, despite warnings that the policy is inflating house prices. He and Theresa May visited two new homeowners in Salford on Monday morning, he said, “hearing first-hand how help-to-buy made their dream of home ownership come true”. He said young people saw the market as “rigged” in favour of those already way up the ladder.

The chancellor announced an extra £10bn in funding to provide loans under the scheme through to 2021, which was briefed to newspapers over the weekend. The speech contained no new announcements beyond that, but there were re-commitments to manifesto pledges including the national retraining scheme to help people whose jobs are threatened by technological change.

Powered by Guardian.co.ukThis article was written by Jessica Elgot Political reporter, for theguardian.com on Monday 2nd October 2017 13.29 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010