by GK Strategy 13th December, 2013
3 min read

Autumn Statement 2013

Chancellor of the Exchequer, George Osborne, published the Autumn Statement last week. The Statement provides an update on the Government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility.

As expected, Osborne kicked off his speech by highlighting that the “plan is working”. The UK is in the best economic position since the formation of the Coalition in 2010, and the Autumn Statement presented Osborne with an opportunity to drive this message home. The growth forecast for this year was revised up from 0.6% to 1.4% and from 1.8% to 2.7% for next year. Similarly, unemployment is forecast to fall from 7.6% this year to 7% in 2015 and then 5.6% by 2018. Osborne also declared that Britain is growing faster than any other major advanced economy.

In an attempt to outfox Labour before the next election, the Chancellor announced an updated Charter for Budget Responsibility next year, which Parliament will vote on. This Charter would cover the post-election period, thus setting a potential trap for Labour in developing its plans for the economy. A refusal by Labour to vote in favour of the Charter would provide the Osborne with ammunition to suggest that the opposition are acting recklessly.

Most of the other policy announcements, such as free school meals for under-sevens, a marriage tax break and changes to the pension age had already been leaked before the Statement, so passed without much attention. This tactic ensured greater coverage of the economic numbers and forecasts, as well as marking a return to using the Statement as an update on public finances rather than an additional Budget.

However, the Chancellor sounded the usual note of caution that the “job is not done”, and stressed that “the biggest risk to that comes from those who would abandon the plan” – the Labour Party. This theme, the Conservatives hope, will secure a majority at the next General Election.

And Shadow Chancellor Ed Balls’ performance during his response in the Commons did nothing to help Labour’s cause, being ridiculed again for his incoherent and unsettled manner. The day was described as one without any big winners but many were in agreement that the Shadow Chancellor was the clearest loser. However, for Labour to ditch Balls now as some have suggested would make it even more challenging to present the Party as having a credible economic plan. Labour will keep pushing the argument that this was yet another example of the Coalition failing to tackle the cost of living crisis – demonstrated by the Party’s latest campaign poster. For the Coalition, they will hope their economic recovery is not simply built on sand.

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