NEXT week sees another minefield looming for Theresa May’s terminally wobbly government: the Budget. The Chancellor, Philip Hammond – well he was the last time I looked, but Tory ministers have a short shelf life these days – has already proven to be accident-prone. His last Budget, back in March, collapsed within a week after Downing Street made him cancel a plan to raise National Insurance contributions for the self-employed. Hammond, a prominent Remainer, has to get the next one spot on, or face a howling pack of mad Brexiteers baying for him to be sacked.

Alas, the Chancellor’s sums are in a big mess. At the end of 2016, everything looked a bit rosier. The economy had not had the big Brexit meltdown promised by his predecessor, George Osborne. The latter blew the EU referendum by predicting every imaginable disaster from a Leave vote, including (my memory may be faulty here) a plague of frogs, locusts and boils. Instead, consumption boomed as folk borrowed now in case the economic roof fell in after Article 50 was triggered. At the same time, an ever-treacherous City dumped sterling, causing the pound to collapse. This made UK exports cheaper (not that we make very much that foreigners want to buy).

In this sunny interregnum – basically from June 2016 to June 2017 – Hammond could whistle a happy tune. Unfortunately, as is the wont with chancellors, it went to his head. This jumped-up property developer – who in normal times would never have got near the Treasury benches – started believing he was God’s gift to economic management. The one thing he did get right, in his November 2016 Autumn Statement, was to junk Osborne’s specious financial accounting and come clean that the Tory government needed to borrow another £122 billion. If Jeremy Corbyn announced he needed another 122 billion quid, The Daily Mail would have apoplexy. Instead, the City merely rubbed its hands in glee at the brokers’ commissions on all those new loans to the Treasury.

However, reality always catches up with Tory Chancellors who think they really run the economy. For starters, the independent Office for Budget Responsibility (OBR) has just come up with new calculations proving that official estimates of UK productivity growth have been vastly overestimated for years. If productivity is running lower, future growth will be lower, and so the Treasury will rake in less tax. Bottom line: the OBR says Chancellor Hammond has less cash coming in over the next five years than he thought he had last March. Oops!

On top of this, the UK economy really is slowing as a result of Brexit pessimism in the business and financial community. Last month, the International Monetary Fund singled out Britain as a “notable exception” in an improving global economy. The IMF sharply reduced its UK long-term growth outlook, from 1.9 per cent to 1.7 per cent. The forecast actually shows the UK trailing Greece over the next five years. Oops again!

The problem for Hammond (and the whole Tory administration) is that there are suddenly no goodies in the economic basket with which to bribe the electorate. Even if the Chancellor abandons his ever more theoretical notion of “balancing the books” in the middle of the next decade – and he should – there just isn’t a lot of fat in the slow-growing UK economy for giveaways. At least not to the middle class, southern voters on whom the Tory government depends.

That does not mean we will see a dull Budget. In fact, the Chancellor is being flooded with ideas from young Tory MPs on the make. The odds are that this could be a budget crammed with fiscal gimmicks. Besides, Mrs May is desperate to regain the political initiative from Labour and steer the media narrative away from ministerial resignations. The problem is that Budgets which are full of ill-digested gimmicks tend to fall apart very rapidly under close scrutiny. And Budgets designed primarily for political show tend to make the real economy worse, not better.

FIRST up, Hammond needs to raise more dosh. So we can expect lots of tax wheezes that take money in ways that can be presented as “green”. So various tax hikes on diesel cars are probable, including changes to excise duty. One obvious way of raising a lot of cash is by cutting the still-generous pension tax relief. But that would create a massive revolt among Tory voters. The solution being touted by Tory backbenchers is to trade off a cut in pension relief for middle-aged taxpayers against tax cuts for people in their 20s and 30s. That would have the double whammy of raising overall Treasury income while appealing to younger voters – a demographic that has gone to Corbyn’s Labour Party. A cut in stamp duty for young, first-time buyers, funded by an increase in the transaction tax for landlords, is also mooted.

Housing is likely to play big in the Budget. Partly because Hammond’s business background is as a developer – he still owns a couple of development firms. But also because the PM is interested. Her Tory conference speech was destroyed by her coughing fit and that P45 joke, but in it she announced an extra £2bn for affordable housing. With 1.2 million people on housing waiting lists (and rising) everyone knows that is political peanuts. We may see more gimmicks here. The big house builders are demanding planning deregulation as a quid pro quo for a faster rate of construction. Hammond himself is rumoured to be considering letting developers in England extend the height of properties without planning permission, or even scrapping the Green Belt altogether.

But in the end, the big numbers will do for Hammond and May. Total national debt is nearly double it was under Gordon Brown, at £1.8 trillion, or 87 per cent of GDP. That’s £65,000 per household, in real money. Interest rates are still low, but they are starting to rise. British capitalism is trapped in a financial and productivity hole. For decades it has relied on a bloated banking sector making excessive profits from lending consumers money to buy houses and imported goods. This consumer debt is underpinned by rising house values. Industry has been starved of investment capital, eroding productivity. This is a casino economy built on top of a property bubble.

We should also remember that the Tories have presided over a period of truly massive austerity that has hurt Scotland hard. Thanks to cuts in the UK Treasury grant, the Scottish Government’s resource spending is set to be 10 per cent lower in real terms by 2020-21 compared to 2010-11. During that period health has been a priority, with real resource spending up by 10 per cent. As a result, on a per capita basis, real resource spending in other areas is likely to be 20 per cent lower in 2020/21 than a decade earlier.

Unless, of course, the Scottish Government can generate extra income of its own. But to do that, we need to be in charge of our own economic destiny, and not dependent on what Philip Hammond does next week. Which is still the best argument for independence there is.