Polly Toynbee This budget won’t save the Tories, and Labour will inherit a mess
Will it work? Will that £450 a year national insurance giveaway save the government’s bacon? No, and not just because voters know they are still paying more tax while their food bills are up 28% and average weekly earnings only up by 14% in the last two years. Far, far too late now for any bogus “turning the corner” boasts to save this government’s skin.
Nothing now will reverse voters’ fixed judgment of the Conservative era. None but core Tory voters will prefer tax bribes to rescuing the NHS and all public services from gross decay.
Remember: at the 1997 election, voters ignored the Tories’ genuinely rising economy amid public squalor because they had long ago lost faith in John Major’s government’s competence – and they had lost patience with public neglect. Multiply that a hundred times over after these years of pandemonium, as this government falls further behind in polls on everything.
But let’s hope some of these measures mitigate the state of this stagnation nation, defying dire Office for Budget Responsibility predictions. Business is on investment strike after seven chancellors in seven years abandoned serial “industrial strategies”. The chancellor is throwing a horrible heap of spending cuts and tax rises over the fence of the next election, to buy votes now and poison Labour’s future. The time has long passed when Labour secretly celebrated calamitous Tory economic figures: certain it will inherit this frightening legacy next year, Labour urgently needs some green shoots of growth. So let’s hope some of this economic kickstarting works.
Polly Toynbee is a Guardian columnist
Katy Balls The Tories now have their budget for the doorstep, but some think it’s too timid
Rishi Sunak has finally done what his party has long wanted: cut tax. Jeremy Hunt used the event to herald the largest business tax cut in modern history as well as a retail offer by cutting national insurance for employees by 2%. The decision to prioritise national insurance over income tax was part of a wider desire by ministers to pitch this as a budget for workers.
There will be relief among MPs that the chancellor chose to focus on a tax cut for working people – rather than making the main giveaway an inheritance tax offer. While there are some MPs in blue wall seats who want to see the promise of an inheritance tax cut before polling day, more MPs worried it would play into the idea that the Tory party was most concerned with looking after its own. “This is sellable on the doorstep,” says a member of the 2019 intake of the autumn statement.
However, the picture is not all rosy. No 10 wants to press the idea that it was only by taking difficult decisions that it has been able to cut tax in a sustainable way. But there are Tory MPs who worry it could prove too little, too late. As well as the Office for Budget Responsibility downgrading the UK’s growth forecast, there is a question as to how much these tax cuts will really be felt. MPs concerned about their seats, too, would have liked a bigger focus on personal taxes over business taxes.
It means that many in the party want Hunt and Sunak to go much further before the election. Given the OBR forecasts, it is unclear how much further they can go.
Katy Balls is the Spectator’s political editor
Miatta Fahnbulleh Voters don’t want tax cuts, they want services and investment
What the chancellor gave with one hand, he took away with the other. A rise of the national living wage to £11.44 for low- income households is good news but eclipsed by energy bills and food bills that are 49% and 28% higher than two years ago. The chancellor could have upped the windfall tax on energy giants to provide cost of living support to struggling families, but he didn’t. And while increasing the housing allowance is good news, without a plan to tackle soaring rents or build thousands of social homes this will do little to resolve the housing crisis.
With just one in four British people preferring tax cuts to spending more on our public services, the cut in national insurance will ring hollow in the face of planned cuts to schools, hospitals, police and local services that are already on their knees. He could have used his headroom to resuscitate our crumbling public services, but he didn’t.
But worst of all, with the Office for Budget Responsibility predicting the largest reductions in living standards since Office for National Statistics records began, where was the long term plan to revive the economy and reverse 15 years in which living standards have been squeezed? There was no investment plan to flood the market with cheaper renewables, retrofit millions of homes or build the next generation of green social homes. Nor any plan to create new industries and jobs in every part of the country.
This was the wrong political choice for the country, and millions will pay the price.
Miatta Fahnbulleh is an economist. She is standing to be Labour’s parliamentary candidate in Camberwell and Peckham
Lucy Webster Cruelly pushing sick or disabled people into work is being dressed up as ‘opportunity’
Once again, the Tories have delivered a budget that punches down. The chancellor tried to dress up his attack on disabled people as a generous offering of “opportunity,” but make no mistake: the aim is simply to take away vital, lifesaving benefits.
While the repeated threat of a real-terms cut to personal independence payment (Pip) and other benefits mercifully hasn’t materialised (yet), many of the most disabled people in the country will now fear an even worse outcome: a total withdrawal of their out-of-work benefits when, inevitably, they can’t find work within the new, arbitrary 18-month limit. Already, many of these people are going hungry, cold or without essential medical equipment. Some will die, not from their conditions but from enforced poverty.
Despite what Hunt says, extra money to help long-term unemployed people back into work will do nothing for those who simply can’t work. There are some disabilities and illnesses that no amount of retraining and, certainly, no amount of Department for Work and Pensions bullying will magic away.
The Tories know this. Taking benefits from disabled people who can’t work is not really some misguided attempt to help us enjoy the privileges that come with a job. Instead, it’s just another way to punish and demonise us, to push us further into poverty and out of society.
People who are so sick or disabled that they can’t work are not the enemy. They’re not the ones who made your weekly shop unaffordable. The Tories are. Lives depend on remembering where the blame truly lies.
Lucy Webster is a political journalist and the author of The View From Down Here: Life as a Young Disabled Woman
Jonathan Portes Hunt is using ‘fiscal space’ we don’t have for ill-advised cuts
This autumn statement seems even further removed than usual from the reality of the UK economy. As the Office for Budget Responsibility analysis shows, the supposed improvement in the public finances since the last forecast is partly illusory, as inflation pushes up tax revenues, but the government pretends that it doesn’t lead to the need for increased public spending.
So tax cuts are mirrored by cuts in desperately needed public investment. But it’s worse than that. We’ve had 15 years of slow growth in productivity and wages, exacerbated first by austerity and then Brexit. Today’s OBR forecasts project that this will continue for the foreseeable future, with real disposable incomes not recovering to their pre-pandemic level for another four years, perhaps the worst period for living standards in recorded history.
In this light, using fictional “fiscal space” to cut national insurance looks positively counterproductive, both economically and politically. It reduces the scope for better targeted tax cuts or public spending increases and it distracts from the longer-term challenges of building public services, increasing public and private investment, building housing and infrastructure, and improving education and skills.
Perhaps this disconnect is most visible when it comes to immigration. Tomorrow’s immigration statistics will generate predictable manufactured outrage. But without recent record increases in immigration, offsetting the fall in the workforce owing to sickness and disability, the UK’s economic and fiscal position would look considerably worse. In this light, the chancellor’s claim that Labour “want to expand the workforce by immigration” looks like projection. This contradiction, both political and economic, further illustrates the disjunction between the short-term debate about tax tweaks, and the UK’s need for a credible long-term economic strategy.
Jonathan Portes is professor of economics and public policy at King’s College London and a former senior civil servant
James Johnson Giveaways abound, but where’s the message?
A chancellor briefed against for not being political showed knack and dexterity, demonstrating there are signs of life in the Tories yet. He delivered tough, traditional conservatism with a smile, and his headline national insurance measure will put money in the pockets of voters going into 2024. His ultimate aim will be to narrow the poll gap with Labour on the economy.
But to achieve this, No 10 needs to answer another question: what’s the strategy? On NI in two years alone the Tories have gone through four iterations: increase it for the NHS, cut it under Liz Truss, oppose a cut under Rishi Sunak, then a bigger cut than expected with this latest statement. Big state, small state, five promises, long-term decisions, change, conservatism, another five promises: the government needs to settle on what its message is, fast.
Without a strong narrative, giveaways could fall flat. Voters know a bribe when they see one. David Cameron and George Osborne’s 2015 giveaways resonated because they were able to tell a story that their tough decisions on the deficit had paved the way for the good times.
Parts of this autumn statement will resonate. The position on benefits should strike the working-class voters the Conservatives need to hold as fair. People are still wary of Labour’s record on spending and debt. The measures will calm Tory MPs. But looking ahead to 2024, the Conservatives will need more than freebies. They will need a message too.
James Johnson is a former Downing Street pollster who worked under Theresa May and now runs JL Partners
