In a highly political Autumn Statement, Chancellor Jeremy Hunt was keen to point the finger at the global headwinds of Covid, inflation, war and energy crisis for the parlous state of the UK’s public finances. We are facing, as he put it, a recession “made in Russia” that the government will face down through a focus on three key areas: stability, growth, and public services.

Hunt, fresh in the job and on the receiving end of a massive political ‘hospital pass’ from the short-lived reign of Liz Truss and Kwasi Kwarteng, faced an unenviable task with this statement. Following a few weeks when the UK’s reputation for fiscal continence was severely damaged, it was imperative that he continue to rebuild the trust of international markets. He also had to walk a fine line between taking tough decisions on tax and spending without deepening the existing rifts in the Conservative party. Finally, with the Tories languishing in the opinion polls, he had to convince the public that this government can be trusted to look after their interests during tough economic times.
A little something for everyone (but not too much)
In seeking to keep these three disparate groups happy (or, at least, not actively unhappy), I think Hunt did as decent a job as could be expected in the circumstances. The headline announcements from the statement – many of which had been well trailed in the press beforehand – contained a little something for everyone.

To soothe markets, he spoke in reverent tones about the appreciation he has for the work of the Bank of England and Office for Budget Responsibility, while stressing two new fiscal rules aimed at keeping the UK’s finances on the straight and narrow. In an attempt to head off internal division in the party, he repeatedly positioned his policies in the fine old tradition of Conservative orthodoxy: spurring innovation, getting people into work, making sure the country pays its way and the value of regulatory reforms (especially with “post-Brexit freedoms”) to stimulate growth. For the public, meanwhile, he emphasised the commitment to increasing funding for key public services such as schools and the NHS, as well as targeting support towards the most vulnerable through raising the National Living Wage and maintaining the pensions ‘triple lock’.
The devil’s in the detail
As ever, the devil will be in the detail and the fine print must be examined closely. For example, the controversial windfall tax on the ‘excess profits’ of energy companies will have its success or failure largely determined by where power prices end up in the coming years, while the fiscal drag of freezing tax thresholds (and cutting the top rate threshold) for several more years will eventually bring a great many people into a higher tax bracket than they currently find themselves. The impact of this Autumn Statement will, more than most, reverberate for years through the British economy.

Again and again in his statement, Hunt made reference to forthcoming reviews into major areas of policy such as defence, the NHS and social care, education, and workforce participation. Kicking the can down the road is a favourite pastime of every politician, although in Hunt’s defence he has barely been in his job five minutes and not everything can be reformed all at once. But those reviews hint at potential further tough decisions to come.

In reply, Shadow Chancellor Rachel Reeves was predictably robust, declaring that “Britain can no longer afford a Tory government”. It remains to be seen whether the public will share that view come the next election, but regardless of one’s opinion of this Autumn Statement, what’s certain is that things are going to get even worse economically before they get better.

In Hunt’s closing remarks, he referred to the spirit, determination and ingenuity of the British people, reminding us that the country has overcome worse in the past and saying that we will ‘face into the storm’. It’s often said that there’s no such thing as bad weather, just unsuitable clothing. As Hunt scrambles to pull on the nation’s waterproofs and thrust its feet into wellies, he does so in the knowledge that the country is already thoroughly drenched. A hearty meal and warm hearth at the end of the trek can’t come soon enough.

The value of active minds: independent thinking

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