Autumn statement: George is jubilant, Ed blusters and Danny breathes a sigh of relief

by Stephen Tall on December 5, 2013

“A lot done, a lot left to do.” It’s the slogan that adorns many re-election campaigns and it’s the one George Osborne adopted in his autumn statement today. He was cautiously jubilant. Growth has returned with the OBR seemingly struggling to get its forecasts to keep up. Borrowing will fall – slower than the Chancellor forecast, true, but a cash surplus is expected within five years.

This gave the Coalition the wriggle room it needed for an assortment of giveaways… Free school meals for 5-7 year-olds, the personal income tax allowance to rise to £10k then be pegged to inflation, petrol taxes frozen, employer National Insurance contributions to be scrapped on 1.5 million jobs for young people, a boost in the business start-up loans scheme, £1bn in loans to boost housing developments in the north of England. Oh, and the £700m a year Tory marriage tax allowance that benefits only one-third of married couples.

But it’s not all giveaways… Government departmental budgets (excluding hospitals and schools) will be cut by c.£1bn for the next two years, overall welfare spending (excluding the triple-locked state pension) will be capped, ‘earn or learn’ restrictions on unemployed 18-21 year-olds wanting to claim benefits. The tough times are far from over.

The Coalition will hope this autumn statement marks a turning point, that they will be able to claim the economy is recovering only thanks to the government sticking to its economic strategy. As I pointed out this morning, that’s a distorted narrative. But it’s one that may stick.

If Tory MPs were jubilant (none of their Chancellor’s feigned caution) then Labour were subdued. Against a deafening wall of Tory barracking, shadow chancellor Ed Balls struggled to be heard. But it’s perhaps as well he couldn’t be: his response was not just falteringly, blusteringly delivered it was also desperately thin. His first sentence – accusing the Coalition of being in denial – rebounded on him given the news we’d just heard that GDP declined by a massive 7.2% in 2008-09, not 6.3% as previously thought. He managed one good joke – IDS stands for “In deep… shambles” – but the silent, strained faces of Labour MPs told their own story.

Overall, Lib Dem MPs seemed happy enough. As Danny Alexander remarked in his letter to supporters, “setting the Tory Marriage Tax break to one side, the Autumn Statement is packed full of Liberal Democrat ideas”. Our party has a fair claim to some measure of credit for the economic recovery. First, by ensuring stable government for five years at a time of great uncertainty – such as the Eurozone crisis and steep commodities price rises – and then by ensuring ‘Plan A’ was amended when it was clearly failing. We’ve also made mistakes: notably letting George Osborne follow Alistair Darling’s plans to slash capital spending in 2010. We’ll have to hope voters give us credit for the successes and not just blame for the blunders.

* Stephen Tall is Co-Editor of Liberal Democrat Voice, and editor of the 2013 publication, The Coalition and Beyond: Liberal Reforms for the Decade Ahead. He is also a Research Associate for the liberal think-tank CentreForum and writes at his own site, The Collected Stephen Tall.