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
    -10

    Comment number 91.

    I guess the BBC has the moral integrity to be allowed to choose which or my words get published.

    I wonder how many paedophiles they'd have to harbour in order to lose that moral high ground?

  • rate this
    -9

    Comment number 100.

    99

    The crisis was caused by the failure of governments to regulate the behaviour of the banks. In the UK the Labour government had changed a regulatory system that had worked safely for 300 years. It collapsed.

    I have no doubt that if there had been a Tory government in 2005/10 that it would have been no different: but it wasn't was it?

    Labour screwed it up. We all know that so stop pretending

  • Comment number 86.

    All this user's posts have been removed.Why?

  • rate this
    -8

    Comment number 41.

    Where are the cuts in public spending, departmental waste , unnecessary and undeserved benefit payments ? There are still too many overpaid and surplus to requirement people working in public sector jobs,too many managers in the over funded NHS, too many useless quangos, and too much of the taxpayers cash being wasted on government bodies, "not fit for purpose".

  • rate this
    -8

    Comment number 57.

    Nice to see the amnesiac left out in force today.

    The Tories have had just 3 years (in dreadful economic conditions globally) to try to repair the crumbling ecnomy, abused by Labour mismanagement for over a decade before that. We had a surplus when Labour came to power in '97.

    If Labour are elected, they will deliver an economic coup de grace to our weakened economy. Greece all over again.

 

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