22 November 2023
Walking a delicate tightrope, but an Autumn Statement for growth
This was an Autumn Statement full of headline-grabbing announcements that have felt somewhat lacking in these statements in recent years. The timing – with inflation down and a more positive economic backdrop – provided room for a series of bigger moves that made it undoubtedly one of the most notable fiscal events of this Parliament.
The Chancellor said this weekend that “this is the moment to focus on growth”, and he certainly didn’t hold back – proudly proclaiming no fewer than 110 growth measures are included in his speech.
Even Barbie got a mention on that list – a term unlikely to have featured on your Autumn Statement bingo card. While the announcement of a consultation on increasing investment into the TV and film industry may not dominate the headlines, it exemplifies the range of measures announced today.
The Chancellor could, as ever, have gone further, but he was at pains to emphasise the tightrope to be walked between driving growth without a resulting negative impact on inflation, which remains one of the Government’s core five pledges; a pledge Hunt noted was going to plan. No observer could have missed that all key measures were followed by a mention of the OBR’s rubber stamping.
This was a very political Autumn Statement. On many key issues, what could have been red meat for Labour didn’t materialise. Benefits are to increase in-line with the higher (6.7%) rate of inflation; the National Living Wage is to increase 9.8%; and the headline rate of National Insurance is to fall 2%. In the Chancellor’s best gag of the day, Hunt said that he and the Leader of the Opposition have something in common – both wanted to make a Jeremy Prime Minister, “but probably to the relief of both parties, we failed.”
In her response, Shadow Chancellor, Rachel Reeves, was limited to saying that all Hunt had done was “lift the lid on 13 years of economic failure.” She will have been disappointed not to have not been able to grab hold of a headline that was overtly negative for the average earner, though we can expect the moves to cut benefits for those not getting back to work to be a key battle line in the coming days.
Make no mistake, this Autumn Statement marks the starting gun for the next General Election. The Chancellor needs ordinary people to feel more positive, to believe the Government is on their side and to give Labour limited room for manoeuvre.
We can expect much, much more in the Spring Budget, but the Chancellor will hope that today lays the groundwork to give the Conservatives even the slimmest glimmer of hope.
To read the Boldspace analysis of the Autumn Statement, click here.