The Autumn Statement: Poets or rockers?

 
Hilaire Belloc and Motley Crue

In the end, it all comes down to a choice between Hilaire Belloc and Mötley Crüe. That is the choice that will determine the outcome of the next general election.

On the one side are the Conservatives and Liberal Democrats, firm disciples of Belloc and the poet's belief that one should "always keep-a-hold of nurse/ for fear of finding something worse".

Labour, for its part, prefers listening to the Mötley Crüe, particularly when the band thrashes out the lyrics: "Now it's time for change/ Nothing stays the same/ Now it's time for change".

It is through this prism that the politics of George Osborne's Autumn Statement should be viewed.

Despite everything, despite the expected poor figures, the extended austerity, the potentially missed targets, the chancellor's strategic aim will be to convince voters that everything is still on track and they should keep a-hold of Nurse Osborne's hand.

The mañana chancellor?

Let me, at this point, throw out some apparently random phrases: we are making progress; Britain is on the right track; turning back now would be a disaster; the last thing we should do now is change course.

All phrases, you will not be surprised to learn, that the chancellor himself wrote in an article for the Sun newspaper this weekend.

His challenge will be to make this case when he is simultaneously forced to admit that he is going to have to cut spending for longer to reduce the deficit and that he is not on track to meet his target of cutting national debt as a share of national income by 2015.

Quite a big task and one that Labour will insist he is unable to achieve. How can the government claim it is fixing a debt crisis when, er, debt is rising?

Cornish pasty festival Pic: Getty Images The chancellor lost ground with his "pasty tax" plan in the Budget

The big question - and one that is unanswerable for the moment - is whether the public are willing to remain patient and give Mr Osborne the extra time he is asking for. Do they continue to trust him or do they begin to view him as a "mañana chancellor", one that always promises to deliver recovery tomorrow, never today.

A key part of this argument is not just the chancellor's ability to persuade people that his deficit reduction strategy is right, but also whether they believe it is fair. Can Mr Osborne persuade people of his belief that "we are all in this together"?

This is the test that will be applied to the tax rises he is expected to levy on the wealthy, perhaps by cutting pension tax relief, and to the squeeze on welfare that he is expected to make by saying most benefits should rise by less than inflation.

In many ways, on this fairness issue, the chancellor will be trying to recover ground lost earlier in the year at the Budget. His decision to cut the top rate of tax from 50p to 45p, and the taxes that he imposed on unlikely targets such as warm pasties and static holiday caravans, made it much harder for him to argue that everyone was feeling the pain evenly.

To this end, Mr Osborne is expected to try to claim some ownership for new tax rises for the rich - not least so the Lib Dems cannot do the same.

Coalition strains

It is notable that, unlike the run-up to the Budget, there has been an outbreak of shocking coalition discipline with hardly a jot of the Autumn Statement leaked except for those parts leaked officially.

If on the Monday before a major financial statement the headline is about yet another crackdown on tax avoidance, then the Treasury is doing well.

What is the Autumn Statement?

Autumn leaves
  • One of the two major statements the Treasury has to make to Parliament every year
  • Governments decide what form they take and when to make them, so there have been many changes over the years
  • Since 1997 the main Budget - which contains the bulk of tax, benefit and duty changes - has been in the spring before the start of the tax year in April
  • The second statement has tended to focus on updated forecasts for government finances
  • Over the past few years this distinction has become blurred, with the Autumn Statement becoming more of a mini Budget
  • Under the last Labour government it was called the pre-Budget report

Where that unity between the Conservatives and Liberal Democrats will be more severely strained is when they have to say something about their plans for beyond the 2015 election.

The balance here is for the coalition to say enough for their deficit reduction plans to remain credible while keeping enough back to allow both parties to have distinctive policies that reflect their agendas and priorities in the run up to the election.

For example, in this Autumn Statement, because the Conservatives and Lib Dems cannot agree, there is unlikely to be any new mansion tax or any cut in housing benefits for the under 25s.

Expect those to appear in separate election manifestos instead. For now, the chancellor is likely to set out some more detail about a forthcoming spending review and the first year after the election - but no more.

As for Labour, the Autumn Statement provides both an opportunity and a trap. It gives the opposition a chance to capitalise on the government's poor financial figures (and missed targets), to make the case for change, to place a doubt in the minds of all those who have so far put their faith in the government.

They will argue that the government has failed on its own terms: it has failed to reduce debt. The trap is that if the government sets out its own plans to raise taxes and cut spending, then Labour will face more pressure to say what it would do. The party has yet to set out in any detail how it would cut the deficit and sooner or later it is going to have to make a decision.

So the bottom line for the Autumn Statement is a very simple question: Does it make the government more or less credible on the economy? Amid the flurry of figures and targets and pundits, that is the issue that matters.

 
James Landale Article written by James Landale James Landale Deputy political editor

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  • rate this
    +1

    Comment number 131.

    110.Idont Believeit
    Stan 100
    You admit that the same would have happened due to the financial crisis under Tory or Lab. your claim it was Lab's fault rests solely on the fact that GB and Labour just happened to be the Govt at that time. Sounds like they were unlucky rather than culpable
    **
    Funny how Labour always seem to be around for financial disasters.
    Must be a Kiss of Death then

  • rate this
    0

    Comment number 130.

    The fact is at the moment the global economy is in such a mess that it wouldnt matter who was in power, real growth would be impossible to achieve.
    Labour might make out that they wouldn't cut spending just like the coalition has, but they would have no choice. The state they left it at the last election means that without austerity we'd go the way of Greece and if you think things are bad now...

  • rate this
    0

    Comment number 129.

    Spending on Education,NHS and Foreign Aid not touched. I for one don't trust Osborne on the first two and personally speaking foreign aid must be stopped immediately, when we have foodbanks and child poverty in the UK why are we giving money to foreign countries.We are feeling the pain of his failed policies and India has a SPACE PROGRAM. He is good at taking our money,not good spending it on us.

  • rate this
    0

    Comment number 128.

    >>>85. SeeDubya
    >>>The tories' idea of "pulling together" is telling the oarsmaster to whip us galley slaves harder, while the great and good continue to quaff wine out of gold goblets.

    Hey SeeDubya, the 70s called and they want their class war rhetoric back!

    It's really very simple, NONE of the LABCON gang can do much because they are not really driving, in 'power' or not.

  • rate this
    +1

    Comment number 127.

    >>>119. stanilic
    >>>Thatcher has become a political swear-word.

    Indeed, but rather like Microsoft people who pretend everything she did was bad conveniently forget the way that deeply vested interests were holding us all hostage before (Unions for Thatcher, IBM etc for Microsoft). In both cases - the changes created new vested interests which went too far, but that is the nature of human affairs.

  • rate this
    +1

    Comment number 126.

    >>>105. geoff hutchins
    >>>Return all utilities ...public ownership, no shareholders greedy overpaid executives creaming profits from all of us.

    Eh? Don't you remember how the unions behaved under public ownership? Just as bad, holding the nation to ransom for outrageous pay deals. I agree privatisation has led to excesses. We now need to find a middle way - but won't happen under LABCON govts.

  • rate this
    +2

    Comment number 125.

    Mr Osborne has no business experience, being a career politician so my concern is that the purse strings must be controlled by Treasury ministers or more importantly their advisors. Who holds the advisors to account, who or what influences them and just how much power do they have? In times as bad as this surely the role of advisors should also be open to scrutiny?

  • rate this
    +1

    Comment number 124.

    No122stan,
    Do you agree that the only 'global' comparison to our current predicament was the 'Great Depression'?
    Are you aware of the economic policies that led the world out of the crisis?
    If so, do you think it would be sensible to adopt them to deal with our current difficulties?
    Do you think it may be political/economic ideology holding us back?

  • rate this
    -1

    Comment number 123.

    No122 stan,
    Take the advice of 'Idont Believeit' who seems to be saying 'when in a hole stop digging'.
    How you can possibly argue that the 'mess' would have been the same regardless who had been in office, but it would have been different under someone else is, to say the least, rather irrational.

  • rate this
    0

    Comment number 122.

    117

    Tory HQ are not blaming Gordon Brown & Ed Balls for this mess. They are too busy squabbling amongst themselves at the moment.

    I have set out Labour's responsibility for this mess below.

    The Coalition underestimated the damage done to our economy. This is their error and so we have to play catch up.

    What is needed is a sober assessment of our predicament not the political infighting of old.

  • Comment number 121.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -2

    Comment number 120.

    110

    Labour under Gordon Brown and his advisor Ed Balls were an integral part of the financial crisis.

    They ran up a fiscal deficit on the basis of a Golden Rule that was utterly bogus.

    They presided over an asset value boom that induced a level private borrowing that was unsustainable.

    They allowed the banks to create debt in a quite promiscuous fashion.

    Labour are not be trusted ever again.

  • rate this
    0

    Comment number 119.

    103

    There is nothing I enjoy more than having my own posts read back to me years later. Of course, Big Bang under Thatcher removed the constraint on the banks to keep retail separate from investment.

    What is the point in dragging it up now after we had 13 years of Labour who did nothing about it? Labour revised the regulatory system but not this part.

    Thatcher has become a political swear-word.

  • rate this
    +1

    Comment number 118.

    102

    You were obviously not around at the time of the crash and so did not see what I wrote then.

    I have specific criticisms of the Coalition as well, such as too little too late.

    What I will not accept is the assumption by the Labour lobby on this board that if they sneer at everyone they will be returned to power. If the Coalition are dim then you were the darkest night..

  • rate this
    +2

    Comment number 117.

    everyone at tory hq, stop blaming gordon brown
    two wrongs dont make a right
    the economy is in a double dip reccession, students are committin suicide, hang your head in shame

  • rate this
    +1

    Comment number 116.

    Brown was the worst Chancellor and PM ever given the wreckage he left behind. Labour are still unelectable.

    But Cameron, Clegg and Osborne are now at least as bad - on the basis of how could anyone manage to to make things worse?

    But - this lot have. So they are unelectable too. A pantomime horse would look good up to the current alternatives.

  • rate this
    +3

    Comment number 115.

    I have reached my conclusion after much thought...
    The present bunch are incompetant twits...................

  • rate this
    +2

    Comment number 114.

    Finally, here comes Plan B, 2 years too late. Such Asinine Stubborness

  • rate this
    +2

    Comment number 113.

    'More funding for schools' - you are having a laugh!

    The average Brit comes out of uni with a debt NINE TIMES bigger than the equivalent East Europe graduate.

    Level playing field my centre spot!

  • rate this
    -2

    Comment number 112.

    Labour cannot dodge the fact that they spent all the money in the good years, a lot on inflated public sector pay. Labour's idea of borrowing to keep employing public sector workers, as it will increase tax revenue, is decidedly flawed as only part of the outgoing salary will come back as taxes(income, VAT etc), so the deficit will increase.
    If Labour has saved some we would be much better off.

 

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