Why new UK chancellor of exchequer can hide no more

Janan Ganesh: Britain will learn who Philip Hammond is through the decisions he makes

Something in his stoop, greyness and aquiline nose suggests Arsène Wenger, the football coach and fellow fiscal conservative, though we cannot be sure Philip Hammond would get the reference. In fact, Britain knows even less about its new chancellor of the exchequer – his hinterland, his beliefs – than it does about Theresa May, the prime minister who elevated him last week.

The mystery matters because the office matters. Whoever runs the Treasury co-governs Britain and, in George Osborne, Hammond succeeds a restless doer of things who, like Gordon Brown and Nigel Lawson before him, seemed to steer the whole government from what is only a finance ministry in the way Everest is only a hump.

Think about how much is negotiable now. Post-Osborne, Hammond can change the speed and design of fiscal consolidation. He can loosen the seals around expenditures – namely foreign aid and pensioner benefits – that hemmed in his predecessor until his only recourse was to the most incendiary cuts.

Tory Tallyrand

He can also revise the strategic commitment Osborne made to


as an economic partner, which incurred American umbrage and amounted to the government’s most substantial foreign policy outside


. He can choose not to press, as Osborne would have, for the closest conceivable link between Britain and the EU consistent with a technical exit.

Or he might maintain all of this. The point is, we do not know because this shape-shifting survivor, a Tory Talleyrand, has reached the age of 60, discharged business as august as defence of the realm and foreign affairs and served two prime ministers without leaving clues as to what, if any ideology, motivates all this purring achievement.

Britain’s medium-term future hinges on the question, moot until now, of who Hammond is. Even if he is the “accountant” disparaged by mandarins, this means something: a minimalist Treasury that does not conceive and drive projects outside its nominal domain of financial management.

There may be more to him than that, however. Novelists only discover their theme in retrospect, after decades of writing betray a pattern of fixation with a subject or world view. Politicians are the same. Time and high office bring out their beliefs. Tellingly, Hammond has tended to be a notch to the right of the leadership.

When David Cameron sanctioned same-sex marriage and trimmed the armed forces, he advertised his apprehension. He called for welfare cuts. The prime minister noticed but prized his work too much to object. In 2013 he said he would leave the EU on existing terms, though he became a sincere Remainer as foreign secretary. (What Tories put down to Whitehall capture actually confirmed that Euroscepticism diminishes the closer a politician gets to the subject.)

A Thatcherite technocrat, then. An austerian who seems open to borrowing. Nobody but Osborne has set Conservative economics since 2005.

Brown exercised the same grip for Labour between 1992 and 2007. So it is not melodramatic to call these openings in economic policy historic. If a distinctive Hammondism emerges, it will make a material difference. The first sign will be which model of exit he favours and how much he insists on it if May wants to go another way.

Wider mismatch

Prime ministers are seldom their own chancellors in the way they are always their own foreign secretaries. The subject is too specialised and Downing Street is too weak against the Treasury. The mismatch is wider now that the chancellor has experience of the brief, as shadow chief secretary to the Treasury, and the prime minister has none.

She is very Home Office (vigilant, controlling, adamant about social order) and he is fairly Treasury (sceptical, laisser faire, preoccupied with the bottom line). These dispositions tend to clash. Prime ministers and chancellors tend to clash. For these reasons, and his chance to redirect economic policy, the appointment of Hammond is an event. That it earned less attention than Boris Johnson's move to a husk of a foreign office makes sense only in a culture where adults play Pokémon Go and size up the new Ghostbusters against the originals.

Without the outward stuff of leadership, Osborne drew on inner wiles to make himself indispensable to those who had it. In the end, Hammond played the same game better.

The trick was to show so little of his politics as to offend nobody. It cannot be sustained at the Treasury, where giant and revealing judgments are his to make. Britain will only learn who he is through the decisions that affect it.

– (Copyright The Financial Times Limited 2016)