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Autumn Statement: George Osborne moves into a stronger position

5 December 2012

There’s a sense of satisfaction among Tories, and Osborne allies in particular, this afternoon. First, the Autumn Statement didn’t all leak out in advance. Instead, the Chancellor had some news to make on the day—notably the cancelling of the 3p fuel duty rise and a further increase in the personal allowance. Second, it has drawn political battle-lines that they believe favour them.

Labour now has to decide whether to accept the coalition decision to up-rate most working age benefits by only 1 per cent for the next three years. This saves more than two billion pounds by 2015-16 and will, judging from previous polling on welfare, be popular. But Labour MPs don’t like it, and even Ed Balls himself could be seen shaking his head when Osborne announced it. If Labour do vote against it, the Tories will make almost as much political hay out of that as they have from Labour’s opposition to the £26,000 a year benefit cap.

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The cancelling of the 3p rise in fuel duty and the increase in the personal allowance mean that the winners from this Autumn Statement are people on 19,000 – 30,000 a year. This all fits with the new Tory focus, inspired by Osborne and Andrew Cooper, on the strivers. Indeed, given the end of the fuel duty escalator it would only cost, roughly, another billion pounds to freeze fuel duty for the rest of this parliament. Expect this Chancellor, with his eye for the political opportunity, to do just that.

According to the Office of Budget Responsibility, the policies announced today should boost GDP growth by 0.1 per cent in 2013 and 2014. But some of the other numbers produced by the OBR are far less pretty. Osborne will miss his second fiscal rule of having the national debt falling as a percentage of GDP. Indeed, it will hit 79.9 per cent in 2015-16. But, overall, Osborne will feel he is in a stronger political position now following this statement and the appointment of Mark Carney to the Bank of England job than he was a fortnight ago.

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  • DZ

    Can we have some news on the “Bonfire of the Quangos” ? Is the Chancellor totally unable to eliminate any of the chronic waste in government expenditure?

  • David Holden

    So nobody knew he was not implementing the 3p fuel tax? Where do you live?

  • mynydd

    All I ask is: in January will the price of petrol at the pumps be, lower, the same as, or higher than it is today? Please no, it is lower be 3p than it would have been if Mr Osbourne had not cut the future rise. I pay at the pumps in actual money not in political statements.

  • Daniel Maris

    Only someone floating on a layer of froth on a river of delusion could possibly think the Chancellor is in a “stronger position”. He’s sitting there with the torn up plans of his economic policy strewn all around him. He’s building up an extra £600 billion worth of debt! He will have just about doubled the amount of debt he inherited.

  • TomTom

    James Forsyth, OBE sounds good James and you deserve it !

  • RationalSpeculation

    I’m sure Osborne will be satisfied. Balls fluffed his reply and George got to indulge in his speciality of tinkering at the edges to get some short term political advantage. It will, of course, all be forgotten when reality (and more austerity) bite, but who cares about fixing the problems when you can get some decent coverage in the papers tomorrow? On another note, why does he keep trumpeting about the OBR? They’re hopeless, as the constant revisions to their forecasts show. I know the argumentum ad expertum is logically flawed, but even then, the expertum is actually supposed to have some expertise.

  • Ben G

    ‘Stronger position’? You really do occupy a parallel universe.

  • Steven Efstathiou

    ‘According to the Office of Budget Responsibility… ’, ah, there lies the rub! Nothing these buffoons have predicted in the past has yet come to pass. As for ‘boosting growth by, “gasp”, 0.1 per cent’ – that’s some rabbit Osborne pulled out of his hat. Should keep the 1922 Committee happy ’till at least, ooh, suppertime.

  • don logan

    Balls was utter crap today. It comes to something when you make Osborne look good, the fat boy just blew his lines.

    • anyfool

      He is crap because he has nothing to say, “to far to fast” has run into the sand and all he has left is lies, maybe he has even stopped believing them himself

      • telemachus

        Wiat until Ed unpicks the lies undoubtedly told by the Chaceellor

        Does anyone actually believe the figures on the deficit


        Meanwhile let us emphasise that the welfare cuts(1% only rise
        while he lets inflation romp away stoked further by QE) will slash £3.1 billion from households in 2013-14 alone and target disabled people, children and the working poor.

        In the same year as the government is giving the richest in society a £3bn tax cut, meaning that 8,000 millionaires will get a cut of at least £40,000.

        These plans fail the fairness test, they fail the jobs and growth test and all the time the cost of this government’s economic failure is sending the welfare bill spiralling out of control.

        In the case of the big corporations we’ve seen a massive tax dodge in which Starbucks, Amazon and a number of other companies pay very little tax in this country. What the hell does he think his ill trained new tax insectors can do in the face of the international corporate accountants and llawyers. Stupid man is also axing 10,000 HMRC staff

        What did we hear to help unemployment which is almost 2.5 million across the UK and 10% in the North-east lowest, at 5.8 per cent in the Tory hinterlands – central and southern England.

        And there’s a spectre haunting the entire country – the looming benefit cap that will soon come down hard on the poorest, whether they’re in work or not.

        From April next year benefits will be limited to £500 a week for couples and lone-parent households and £350 a week for single adults leaving them unable to pay the astronomically high private-sector rents in London and causing wholesale social cleansing.

        So the Autumn budget cossets the wealthy and screws the poor

    • an evil tory bigot

      to be fair to Blinky, it must be hard to concentrate on your speech with telemachus’ doe-eyes gazing up at you…

  • Hexhamgeezer

    A decent enough statement within the parameters that Liblabcon have set out.

    Reeves was doing a fair bit of texting while her boss was busy faking outrage to her left – must’ve been important as Ed was peeking.

  • anyfool

    Rachel Reeves went on the Daily Politics and was skewered for lying, ten minutes later on Sky keeps lying with no reaction from Dermot Murnaghan, it comes to something when Sky is less accommodating than the BBC to the Liars of Labour.

    • HooksLaw

      If you need someone to lie for you — always go to a socialist.

    • perdix

      Sky is worried that if Liebour get in they will skewer them.

      • anyfool

        They are going to do that anyway, they will never forgive Murdoch they will remove them from the air unless they rollover if they come to power, makes you wonder if the Dirty Digger has lost his touch.

  • Nick Reid

    Very clear message if you look at the Treasury’s breakdown of which decile income groups benefit and which suffer from today’s changes.

    The 6th, 7th and 8th deciles, probably what Coffee Housers would describe as the striving middle classes, are all net beneficiaries. With the bottom half of earners small losers (though it may not feel that small on the ground).

    And the top decile basically pays for all of this.

    • Fergus Pickering

      Well, that’s all right then.

  • dalai guevara

    Osborne announces further real term cuts to the bottom, whilst reducing ‘relief’ at the top. Surely, there is nothing new to see here, time to move on.

    • HooksLaw

      A conservative chancellor left picking up the pieces after a labour omnishambles
      nothing new here move on

      • dalai guevara

        Of course, the incumbent picks up from his predecessor, what a new way of looking at it, not.

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