We were told that this Autumn Statement was all about the JAMs – those ‘Just About Managing’ – but in the event the phrase ‘Just About Managing’ could apply to the Government itself.
With debt up and growth down, the shadow hanging over the Chancellor’s statement was Brexit and the uncertainty it brings. Higher debt, increased borrowing, lower tax receipts and some very high debt to GDP figures for later in the Parliament might not be the nightmare scenario peddled by his predecessor in the referendum campaign but it does little to paint a positive picture. This may be picked up by those who want to oppose a ‘hard Brexit’ – the softer Brexit is, the more it could be argued growth will increase.
The other major issue was Theresa May’s Conference speech which promised a reshaping of the modern state. But what emerged today was more a series of tweaks to existing policy. Sometimes it is important to remember the big issues – the economy is still growing more than most other overseas countries, the deficit is high and coming down incredibly slowly, and people are concerned about the ‘squeezed middle’ or ‘Just About Managing’ group. Little really changed in the hour that Philip Hammond spoke on any of these.
Extra funding in housing and infrastructure were rolled up to make a £23 billion fund over several years. Politically many pressure groups will be pleased with the number of small wins. But while this will make a difference, it is hard to see this making a radical change to the housing and infrastructure problems that have bedeviled the UK for decades. The context of this £23 billion over several years is a state that spends over £700 billion each and every year.
Small giveaways and popular tweaks in other area abounded, from ending letting fees and cuts to business rates to recruiting extra prison officers. Tax rises took the form of tweaks to insurance tax and reducing exemptions for perks. It was hard to see much that the Cameron and Osborne duopoly would oppose. Where there were new elements, for example the emphasis on all housing tenures including rent, they were variations on a theme not wholesale change – Hammond was quick to emphasise a continuing commitment to home ownership, and the Government had already announced flexibility in housing grant some months ago.
Perhaps in the long run, the most interesting element of the Autumn Statement was the abolition of the twice-yearly key Chancellor Statement at both the Autumn Statement and Budget. This will significantly increase the power of No10 – the Treasury has used its dual fiscal events to control government from Brown to Osborne. Theresa May and her team, who took charge of this Autumn Statement, clearly see this downgrade as part of a reshaping of the No10/HMT relationship, with No10 restored to a pre-eminence not seen in decades.
In terms of the next year, what this all means in terms of a future election is unclear. Not generous enough to guarantee it, but with lots of groups getting a little bit of love and money from the Chancellor, we will continue to have to watch and see. In some ways, such a dull Autumn Statement is itself the story – ‘steady as she goes’ for the ship of state. Continuity in uncertain economic times could be a win for the Government, if only in PR terms. It may be a successful policy in the short term, but in the longer term it is unlikely to last. Theresa May has promised repeatedly ‘a change has got to come’ in response to the Brexit referendum. Such change did not come today. It remains to be seen whether we will see more change in the next six months or if the change involves an election based on the current combination of radical rhetoric and cautious policy making.