You could tell that a general election is on the way from Jeremy Hunt’s autumn statement speech. No Conservative MP was left unnamed, no campaigning local Tory champion was missed out.
The chancellor was not able to mention as much as a possible plan to research the prospect of potentially filling in a pothole, without naming a Tory MP in a marginal constituency and he had an awful lot of announcements to make.
But strangely enough, Hunt did not find much time to go over the latest forecasts by the Office for Budget Responsibility, which explains his dilemma. It shows even after the effects of all his new plans are factored in, the economy will grow by just 0.7% in 2024 and 1.4% in 2025. That is worse than it calculated earlier this year when it forecast growth of 1.8% and 2.5%.
In short, growth for the next two years has halved in just six months. And if that were not enough, despite the false claims by the chancellor that he and Rishi Sunak were responsible for bringing down inflation, it is not expected to return to anything like its target of 2% until 2025.
In his statement, Hunt unveiled lots of plans to turn things around – not that he has ever admitted that things needed turning around. Most of the plans were technical, and a lot were the subject of research, or needed further investigation and potential introduction only if they proved themselves worth actually putting into place.
There was a little money for home building, some more for AI research, new investment zones and a dozen other minor reforms to planning and research. But it was small beer.
The collapse in Foreign Direct Investment because of Brexit is apparently to be reversed by creating a “concierge” service to welcome foreign firms; putting lipstick on a pig is a better metaphor.
One policy that business has been begging for was an extension of the 100% tax allowances on investment, and they got that. But the idea that, as the chancellor claimed, this would somehow allow British productivity to catch up with the levels of France, Germany or America is for the birds.
The government has found money to try to encourage business investment when many companies say the forms and the schemes are just too complicated and difficult to bother with. Hunt has done this because he does not seem to have the money to increase UK government infrastructure investment, which is what is also desperately needed, as is money to improve skills.
The apprenticeship system alone needs root and branch reform, but once again got virtually nothing.
The chancellor, like all chancellors, saved his best for last – finding the billions to cut employee National Insurance contributions by 2% to 10%.
But he has already announced plans to increase taxes on income by freezing tax bands for years to come. An increase in income tax that will far outweigh the NI cut. The tax burden is still on course to reach a post-war high of 37.7% in 2028-29.
It all puts a new light on Hunt’s attempts to claim that he has announced the “biggest tax cuts since the 1980s”.
Why has the chancellor strained so hard to produce so little? Well, low, anaemic, worryingly weak or almost non-existent growth for a further two years tells you all you need to know.
This statement was all smoke and mirrors. Handouts for pet schemes and for marginal constituencies, name-checking local MPs and tinkering with the tax system. And all designed to try to hide the fact that the British economy is in a slow death spiral of high inflation and pathetic growth.
The election Hunt was laying the ground for really cannot come soon enough.