The Autumn Statement set a clear political dividing line between the Conservatives and Labour as we head towards the next general election. The message was stark: this government is clearing up the mess left by 13 years of Labour, holding its nerve and proving its opponents “comprehensively wrong” on the economy. Private sector jobs are up, the deficit is down, growth forecasts are up. But George Osborne made it clear that the job was far from done, and that the Conservatives are the only party that can be trusted to run the economy. By promising to lower debt as a percentage of GDP, including surpluses in good years, he has set an electoral trap for Labour. If Eds Miliband and Balls fail to sign up to a new fiscal framework – as the chancellor is hoping – then the Opposition will be cast as the “same old Labour,” the party which will turn to the credit card, rather than getting the country on a stable footing. This will further strengthen the Tories’ electoral prospects. Nick Faith works at Policy Exchange.
There are seven blank pages at the end of yesterday’s Autumn Statement, but it would be better if all 130 pages were blank. This was an exercise in political tinkering: the government spends about £720bn a year, the equivalent of about £27,000 for every household. The net effect of the measures proposed is £2bn this financial year – the equivalent of under £100 for every household. Big deal. Electoral impact? Nil. Yes, there were good measures, like raising the state pension age, extending business rates relief, and the (token) tax cut for married couples. But where were the cogent and coherent supply-side measures needed to encourage robust productivity growth? We urgently need dynamic pro-market policies on energy, planning and tax simplification where progress has been disappointing. It is time to scrap the Autumn Statement. The chancellor should use the time saved to apply the same principles to reform of the entitlement state that we are in. Do far less. And do it far better. Tim Knox is director of the Centre for Policy Studies.