Jeremy Hunt autumn statement: More about blame than financial reality as recession hits
The Chancellor told MPs this was not due to former prime minister Liz Truss’s mini-budget that wiped £30 billion off the economy, but instead due to global factors. Mr Hunt blamed not just the pandemic, but also labelled the situation a “made in Russia recession” – a line he was so desperate for media to pick up it was often repeated.
There were no rabbits to surprise us with good news, and if there was a black hat at all, it was being used for a whip-round.
The reality is Britain is in a recession, disposable income will fall more than 7 per cent in the next two years – the biggest drop in record – and Britain will see the biggest fall in living standards since records began in 1956.
Mr Hunt and Rishi Sunak know the situation is bleak, with a £60bn gap in the public purse, and offered a statement of deflection and delay as a result.
Listening to Mr Hunt deliver his statement, it was clear he had learnt the lessons of Labour being blamed for the financial crisis, and wanted to make clear while there are issues, it his not his party that caused them.
He stressed his parties “compassionate Conservativism” while announcing targeted help such as inflation-proof benefits, targeted energy bill support, a cap on social housing, but at the same time delayed a social care plan yet again.
Then there are tax rises, which the Office for Budget Responsibility say will hit 37.5 per cent of GDP, the highest tax burden since the Second World War.
Mr Hunt and Mr Sunak know there is no good way to deliver this news or get out of it, only hard choices and a chance to score political points.
As a result, the NHS and education were protected, with the former getting an increase in funding of £3.3bn a year, and a former Labour health secretary Patricia Hewitt brought on board to help find better ways of working. Education also gets more funding, though admittedly after having its budget cut by successive Tory Governments.
These are obviously policies Labour supports. In fact, lots of what was announced is already the policy of Sir Keir Starmer.
Reversal of the 45p tax rate, more NHS staff, school breakfast clubs, the return of the corporation tax rate, these are Labour policies they cannot criticise.
The biggest trap of all are the cuts to public spending, with £35bn out of the £55bn squeeze not coming until after the next election. It leaves the Labour party forced to either say they agree, how they’d managed to reverse them, or simply say nothing, which is more likely.
The announcements will not be popular with most people, but they do show the Conservative party are once again willing to make tough decisions and frame it as for the public good. It is now for Labour to argue against the plans, or convince the public this crisis is not just 12 weeks of Trusseconomics, but 12 years of low growth and mismanagement by the Conservative party.
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