What is an autumn statement? Ostensibly, it is an opportunity to assess the latest independent forecasts produced by the Office for Budget Responsibility (OBR), and for the chancellor of the day to announce changes to his tax and spending plans.
But is also a day of political theatre, bookended by weeks of speculation and months of fallout, as the measures are consecutively debated, implemented and assessed in their impact.
And this autumn statement is at once more political — and more theatrical — than any of its recent forebears. It figures as a final reset in an Autumn of resets; and, after the mixed successes of Conservative Party conference, the King’s Speech and a wide-ranging reshuffle, time is running out for Rishi Sunak to inspire a definite change in the political weather.
So, while ministers talk about “long-term decisions for a better future”, in the autumn statement delivered today, the government needed some clear, symbolic short-term victories.
And with the substance now announced, this does appear to have been chancellor Jeremy Hunt’s foremost priority. Indeed, his autumn statement was less of a serious “long-term” plan for government, than it was a blueprint for further giveaways to come — and a statement of intent regarding future Conservative messaging on the economy.
The most significant announcement in this regard was the obligatory rabbit-out-the-hat of any fiscal event: in this reading, the cut of national insurance from 12 per cent to 10 per cent.
Pre-statement briefings had suggested the cut would be 1 per cent. Hunt, therefore, got to shock his backbenchers with a larger tax giveaway than predicted — and stun, the theory goes, the unrepentant Trussites in his party to silence. (Unlikely methinks).
And, more significant still, Hunt has said that this measure will be implemented through what he called “urgent legislation”. Chancellors do not tend to change the tax system in the middle of the tax year — much less “Treasury orthodoxy”-made-flesh Hunt. But, while the pledge will set up administrative difficulties down the line, the chancellor will hope it proves politically potent in the short term.
In theory, this is the chancellor acting authoritatively — without dither or delay — on a tax cut for working people. (Once more we view that Sunak’s government, after vowing emergency legislation on the Rwanda scheme last week, desperately wants to be seen as busy).
In time, this proposal may also be viewed as significant with regard to a future election date. With the legislative process begun in the coming months, individuals could notice a (slightly) fuller wallet by around March or April — just in time for a May/spring election.
Of course, other more significant factors still point to Rishi Sunak holding an election sometime later — likely much later. This policy then, rather than being indicative itself of an election date, probably shows just how long our “pre-election” period will be.
Hunt is already placing his party, perhaps a year out from a poll, on a clear election footing.
In any case, this measure is rather more about messaging than it was about election timetabling. In this way, Hunt sold the tax proposals to MPs as “compassionate” — it could be interpreted as a coded signal to his backbenchers that now is not the time for an inheritance tax cut, as had been previously trailed. The chancellor had clearly interpreted his statement as a test of Conservative priorities: the national insurance cut, therefore, gives campaigners a policy likely to be better received on the doorstep than some inheritance tax sop.
Elsewhere, signals were sent, too, to key battleground constituencies. Among the proposals was a new Investment Zone slated for north east Wales — Jeremy Hunt declared he will visit the site tomorrow. There is also tax relief for freeports in Anglesey and Pembrokeshire, and £500,000 for the Hay Festival in the Brecon and Radnorshire constituency.
But step back from the headline proposals and consider the overriding message: that, whatever the motivation, now is the time for the government to get generous again.
In this regard, one significant question that flows from the statement today is: has enough changed economically to justify the vast gulf in rhetoric between Hunt I — austere and measured, debuted at the autumn statement last year — and Hunt II that we saw brandished today, unbridled in his optimism and brandishing giveaways? Furthermore, can the chancellor make his chosen narrative, that his consummate economic stewardship over the past year has after all created the necessary conditions for tax cuts, stick?
Undoubtedly, there are clear nakedly political aspects to this autumn statement —strategically orientated as it is to exploit traditional Conservative strengths and traditional Labour weaknesses. Budgets, of course, always contain a bit of sleight of hand — but this autumn statement was tricker than most.
There is an element, here, then of Hunt playing the long game: he intends to fasten Labour’s policy straitjacket by loosening policy now, in turn leaving future fiscal tightening to a potential Labour government and, more significantly, a Starmer-fronted manifesto.
Then there are the dividing lines newly drawn — such as that over Hunt’s tough Conservative messaging and policy on welfare. The chancellor plans to reform welfare in a bid to encourage the long-term sick back into employment. It set up a traditional Conservative argument from Hunt, rehearsed today: “They [Labour] think compassion is about giving money. We think it’s about giving opportunity”.
In the end, Sunak is running out of relaunch opportunities, and hence this autumn statement had to land. But this package could risk, (1), destroying Hunt’s reputation for competence he has nurtured over the past year and, (2), coming off as nakedly political — informed by both inter- and intra-party imperatives. If Hunt has managed to avoid the former pitfall, with the decision not to touch inheritance tax or income tax, for instance — at the very least he seems openly exposed on the latter.
But the true meaning of this autumn statement, electorally and politically, will be decided in the spin rooms of SW1 and beyond over the coming days. For Hunt, certainly, in his bid to sell to his new narrative that his careful stewardship of the economy has paved the way for giveaways, the hard work begins now.
Josh Self is Editor of Politics.co.uk, follow him on Twitter here.
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