ON Wednesday Philip Hammond, our newish Chancellor of the Exchequer, will present his first mini budget, known as the Autumn Statement. Since entering Number 11 Downing Street, Hammond has kept a lower profile than previous incumbents. This is partly because the Tories are in disarray over their Brexit strategy and partly because Hammond’s Treasury has been fighting a turf war with Liam Fox’s new Foreign Trade ministry. Come Wednesday, Mr Hammond will have nowhere to hide.

The current chancellor is a very different kettle of political fish from his predecessor, George Osborne. Mr Osborne was a toff, a show-off, and enjoyed tinkering. His last-minute fiscal gimmicks often blew up in his face, resulting in embarrassing U-turns. Witness Osborne’s infamous “omnishambles” budget” in 2012 where he slapped VAT on Cornish pasties. Mind you, the stooshie around pasties helped to hide a £10 billion cut in welfare spending, so Mr Austerity had the last laugh.

So why did Theresa May dump him? For starters, Osborne was David Cameron’s chief political ally and heir apparent for the top job. Second, and if anything an even worse sin in May’s eyes, our George had shaped the ludicrous and self-defeating anti-Brexit campaign. You will remember that Osborne predicted instant economic collapse if the UK left the EU, and that to forestall this he would have to raise taxes and slash public spending even more. Even pro-EU experts were aghast at this Project Fear Mk II. As for the electorate, they laughed in Osborne’s face.

Philip Hammond is of a different mould. A self-made property developer, he is cautious and colourless. That said, Hammond is – surprise, surprise – yet another Oxford University graduate, so his worldview is strictly that of the British ruling elite. His political dryness will make him as much a cost-cutter as Osborne, perhaps more so in the long run, so don’t believe all that media guff about Hammond “ending austerity”. Osborne prioritised tax rises while delaying unpleasant spending cuts till the last minute. Hammond, on the other hand, wants a smaller state. As secretary of state for defence, he embarked on a wave of swingeing cuts to troop numbers and bases, saying there was “no room for sentimentality”. He even tried to have generals court-marshalled for objecting. Philip Hammond is a bottom line guy, and never forget it.

So why all the speculation that on Wednesday we are going to see Osborne’s austerity plans ditched and economic growth ramped up with a massive boost to infrastructure spending? In part, Hammond has stoked speculation by hinting earlier this year that he is abandoning Osborne’s target to bring the UK into budget surplus by 2019. However the real reason Hammond is scrapping his predecessor’s fiscal plan is because it was rubbish in the first place.

In truth, there never was any hope of balancing the books in 2019. Even on paper, Osborne was fiddling the figures (again) by bringing forward some tax revenues while outrageously massaging the spending numbers. On top of that, economic growth is decelerating, reducing likely tax income. Even if the UK does get back its £6bn in annual EU contributions – don’t cross your fingers – Hammond has to find another £25bn or more. And that includes delivering £3.5bn of unspecified “efficiencies” pencilled in by Osborne for 2019–20. So goodbye surplus, hello Hammond’s version of austerity.

Certainly there will be some fiscal sugar to sweeten the medicine on Wednesday. Hammond has already pre-announced a £1.3bn road building programme. However, that is very small beer by any standards and is offset to a degree by cuts to the rail electrification programme announced last week. My guess is that Mr Hammond is going to deliver a more cautious Autumn Statement than both his friends and his enemies are wishing on him. Not only is caution wired into his political DNA, the economic picture is too uncertain to be clear what economic levers need to be pulled.

There is one area where Hammond is coming under pressure from Tory backbenchers to act: housebuilding. And act he might. Remember that Philip Hammond made his pile developing care homes in the overcrowded Home Counties, where getting planning permission is a military exercise. Last March, in what proved to be his final budget, George Osborne introduced a penal rate on stamp duty on buy-to-let investments and second homes. This was a classic Osborne gimmick designed to free new homes for owner-occupation. The move certainly cut sales for buy-to-let, while generating cash for the Treasury. But it hasn’t led to more homes being built for owner-occupation: supply is constrained by land availability, not demand. It will be interesting to see if Hammond rolls back on stamp duty and eases local planning controls.

Where we may see a fundamental move on Wednesday is a shift in the long-term fiscal rules that guide public borrowing and spending. Remember those Golden Rules that Gordon Brown swore by, before he was caught cooking his own Treasury books? George Osborne came up with a series of spending rules of his own, none of which he ever kept to. His welfare spending cap was breached in 2015 – thank God, I say. His promise to reduce public debt as a share of national income every single year went out the window in 2014. And his promise (scout’s honour) to eliminate the annual deficit completely by 2019 has now been consigned to the dustbin of history by Philip Hammond.

Why bother with fiscal rules if they are always broken? By now the financial markets are deeply cynical about such rules. However, they do serve a purpose by giving a benchmark against which to test a Chancellor’s veracity and competence. When Scotland becomes independent, hopefully soon, the nation’s finance minister will need to go to the markets to borrow. Without a previous track record of such borrowing, it will be necessary to indicate some basic fiscal rules the Scottish Government will abide by – folk don’t lend you money if they think you are going to inflate its value away.

The simplest fiscal rule is to balance current spending – on wages and welfare provisions – over the medium term (normally five to seven years) unless there are exceptional circumstances, such as a major recession. But to borrow as much as necessary for infrastructure investment, provided the real returns to the economy balance the interest rate borrowing costs. The latter rule, I admit, is easy to fiddle so I might also link the rate of new capital borrowing to the rate of economic growth, again with a caveat if there’s a humongous downturn. What new rule might Mr Hammond come up with? We’ll find out on Wednesday.

My gut feeling is that the Chancellor will wait for his main Budget in the spring before making really major policy changes of any kind. Post-Brexit and post-Trump we are sailing in the most economically uncertain waters for 40 years. If the US Federal Reserve raises interest rates to head off Trump-style inflation, expect a global turmoil. If the Italian constitutional referendum next month is a No, expect another eurozone crisis. Time to man the Scottish independence lifeboat rather than rely on Philip Hammond, the Chancellor for the Home Counties.