The Autumn Statement is one of the incumbent’s last chances to tout their economic achievements and woo voters with last minute policy giveaways. However, today was more an exercise in stock-taking than stocking-filling. The economic state of affairs is a far cry from the rosy picture Cameron would have hoped to unveil this close to the election.
With £2bn already committed to the NHS and major funding tactically signed off for transport and flood defences across the marginally held south west, Osborne had little spare change to doll out. For the young couples and families around which CCHQ professes to orientate its campaign, the space beneath the Christmas tree looks dangerously sparse.
Most notably, the Chancellor revealed sweeping changes to the nation’s archaic stamp duty bands in a bid to ease pressure on first time buyers. This political gambit is good respite to families and is being billed as the Tories answer to the Mansion Tax. It won’t however tackle the core problem of a lack of supply. This will make it of little consolation to families in the south where fears of a housing crisis are most pronounced.
Osborne also announced an abolition of Air Passenger Duty for children under the age of twelve and for under 16 year olds from 2016 – worth around £50 million in Treasury hand-outs. Although this could represent considerable savings for families hit by peak flying fares during the school holidays, it is unlikely to carry election-winning traction for the lower salaried “hard working families” already struggling to pay bills.
Today’s statement is stark contrast to the Prime Minister’s Conference Speech just two months earlier where he implied a much more rosy picture of the public finances. At best Osborne nodded towards this with a confirmation of an increase in the personal allowance and putting a “downpayment” on increasing the 40% tax rate threshold.
His hope is that these core personal tax changes, rather than pre-election token spending gestures, will suffice to convince families that the economy and their wealth security is in safe hands (or at least compared with Labour). The question that hasn’t been answered is how the Chancellor will pay for these, given the distance by which he has missed his own deficit reduction target.