Jeremy Hunt has taken a gamble. No doubt, pain is guaranteed for millions of people over the coming years. The tax burden is rising ever-higher as middle earners are dragged into higher rates of tax, while living standards are set to suffer the greatest fall on record. But despite the rhetoric and pre-statement pitch rolling, spending cuts are not scheduled until 2025.
The Chancellor’s punt is that cuts, or at least not all of them, will prove necessary. Perhaps the recession will be milder than predicted, or tax revenues stronger. Energy prices could undershoot their forecasts. The markets appear reasonably relaxed, such is the benefit of providing an Office for Budget Responsibility forecast and adopting a posture of fiscal rectitude.
Despite deferred spending reductions, Londoners will feel the pinch. As we report in today’s Evening Standard, hundreds of thousands of middle-earning key workers across London and the South-East will be dragged into the higher 40 per tax band over the next six years as a result of the prolonged freeze on thresholds. Our analysis suggests that by 2028, more than 900,000 extra employees throughout the region — such as police officers, teachers and senior nurses — will be paying income tax at the rate never designed for them.
As for growth, there was some talk of higher immigration — or at least as much as the Home Secretary will allow. But not enough on reforms to planning law to boost housing, or how we can negotiate a closer relationship with the EU to cut red tape and support our export businesses.
Britain faces global economic headwinds. But such has been recent Conservative mismanagement of the economy that Labour is able to portray itself as the party of prudence and sound money. Governments can win elections amid difficult economic conditions. But they need a plan for recovery and sustainable growth.
Be bold on climate
The British political class may be focused on the Autumn Statement, while world leaders have long left Egypt either for the G20 or home, but COP27 is reaching a denouement. And the stakes could not be higher.
As ever, arguments persist over the precise wording of the text, not least on the phasing out of fossil fuels. But the science has not changed. In fact, it is getting clearer as the climate has passed 1.1 degrees Celsius of warming since pre-industrial times. All nations, from high income to low, must step up to the plate. Richer countries in particular should do more, not least meet the $100 billion finance commitment to support poorer countries on transition and adaptation. Time is running out, both in Sharm El Sheikh and for our planet. Now is the time to be bold.
Twitter is in a tailspin
The chaos wrought by Elon Musk’s Twitter takeover continues apace. Some users have migrated to Mastodon, though you need a PhD in quantum computing to set up an account. Others have given up on social media, only to discover they have families and jobs.
The solution may be a return to the olden days of the late 2000s. Bebo, Myspace, Friends Reunited — a simpler time when social media was about cats and the platforms didn’t decide elections.
