Another Autumn Statement, another disappointment.
This week Chancellor Jeremy Hunt unveiled the contents of the annual financial plan to very little fanfare. In a week that saw former PM David Cameron inaugurated as both a Lord and the new Foreign Secretary, it is undeniable, and frankly unsurprising, that Hunt’s Autumn Statement is hardly the country’s biggest talking point.
Nevertheless, whilst it may have largely flown under the radar, Hunt’s latest budget is nonetheless notable. Much like Hunt’s Spring Budget, it may appear rather permissive on the surface, but in reality, we’re witnessing incremental change that can only be categorized as the absolute bare minimum: a masterclass in lackluster policy that fails to enthrall any part of the electorate, while acting as a continuation of the Tory party’s efforts to ‘create a more productive state, not a bigger one’ (ie. bulldozing the public sector into neoliberal oblivion).
A number of tax cuts have been made, with a reduction in national insurance from 12% to 10.5% set to be in effect from 6 January 2024. These glossy cuts are only feasible, however, through further squeezing of departmental spending. They have also failed to garner praise from leading left-wing think tanks, with the Resolution Foundation predicting British households are set to be worse off at the end of the parliamentary term than at the start. The think tank stressed that Hunt’s tax cuts favored the richest 20% of earners and, come January 2025, the average British household is set to be £1,900 poorer than in December 2019. The IPPR also similarly predicted that the richest 20% of households are likely to gain almost half of the money spent on tax cuts.
Moreover, the Office for Budget Responsibility (OBR) noted that, in spite of Hunt’s announcements, the overall tax burden is still rising year on year, with an unprecedented high of 37.7% of GDP expected to be reached by 2028-29. Whilst Hunt may be making grand gestures, in reality he is merely papering the cracks of a fundamentally broken system.
Whilst benefits are set to increase by 6.7%, it is undeniable that this is once again a provocative show – the increase is in line with inflation and, in a move bound to appease the right of the party, claimants will have to face even more restrictive criteria if they wish to make a claim. In fact, Hunt is set to implement the biggest set of welfare reforms in a decade in a bid to get 200,000 more people into work. Included in this package of reforms are further punitive sanctions for the noncompliant: those who do not look for work within six months will have their benefits stopped, and work experience will become mandatory for anyone unable to find a job within 18 months.The Statement has also been criticized for what it has not included: perhaps most notably, Hunt failed to announce any more investment for schools, in spite of Sunak’s pledge at last month’s conference to make education spending a top priority. Perhaps very little change is what the party is trying to achieve? After all, they are the Conservatives, apparently committed to stability and anxious to avoid robust or radical change. Nevertheless, the Tories currently sit 19 points behind the Labour party in voting intention statistics, indicating that – just perhaps – the strategy isn’t quite working. It appears to me, at least, that Hunt’s latest blunders have left the party even more on the back foot than they were already.