George Osborne used the Autumn Statement today to stick to the key message: the economy is gradually improving, but there is more work to do, and given the chance, Labour would ruin the recovery with more borrowing and spending. Combined with even heavier pre-briefing than we usually see, there were very few surprises in the speech.
With both eyes firmly on the General Election, Osborne has continued to lure Ed Balls towards his fiscal trap. Parliament will vote in the new year on Osborne’s previously announced fiscal charter, designed to tie Ed Balls’ hands by forcing him to match the spending plans of the Tories, or be seen to be voting against fiscal responsibility. With Labour still trailing the Tories in the polls on their ability to manage the economy, this will be difficult for them to navigate.
However, despite positive adjustments to the growth and unemployment figures since March, the deficit has, as was expected, increased, with £4.9 billion more borrowing this year and £7.6 billion next year. Labour will be desperately trying to get this message to stick over the next few days. However, this Autumn Statement apparently represents a slight net reduction in spending, moving on from Osborne’s fiscally neutral approach in March. Details on any new cuts were thin on the ground, and clever accounting may yet emerge as the cause.
However, it was a continuation on the theme from the Budget, with a whole raft of relatively small giveaways to individuals and small businesses, along with the most headline-grabbing change to stamp duty. These were accompanied by an expected £9 billion over the next five years from banks, multinationals, and tax avoiders – not just a good revenue raiser (if it really delivers that amount), but a good response to Labour’s challenge that the Tories are in the pockets of the vested interests.
Overall, the Chancellor, at least on the face of it, has delivered a Budget which he hopes will carefully balance the metaphorical backing into a corner of Labour, and enough giveaways to their target demographics to win votes from UKIP and in the north. Whether he has been successful is not yet clear, but what is not in doubt is that the General Election campaigning has well and truly begun.
We have put together a word cloud of the key words used throughout the Statement. Hover over each word to enlarge.
What are others saying?
Below you can see a sample of reactions throughout the day to Osborne’s speech from key influencers on Twitter. Scroll left and right to move backwards and forwards in time.