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Autumn Statement 2014 at a glance

3 December 2014

Despite widespread warnings that today’s Autumn Statement would bring bad news, Chancellor George Osborne looked confident when he took to the floor. 

Whilst the figures released today did not present the “doom and gloom” picture some had anticipated, it is true that the Coalition’s initial grandstanding about its ability to eradicate the deficit by 2015 has not been realised. 

However, the Chancellor chose to ignore this fact, focusing instead on the UK’s economic performance compared to that of other countries.  

Criticising Shadow Chancellor Ed Balls for having betted the “entire credibility” of the Labour Party’s response to the Autumn Statement on his prediction that the deficit would increase, Mr Osborne highlighted OBR figures showing it was falling, at £91.3bn for this year, and that the UK would be “in the black” by 2019-20.  

Whilst the Chancellor had cautioned that there would be no big giveaways, emphasising the need to continue concentrating on deficit reduction, his Statement included headline grabbing announcements designed to place the party in good stead for the 2015 General Election. 

Sunday’s announcement of an extra £2bn in NHS funding left Labour resorting to playground politics, declaring that it would deliver an additional £2.5bn on top of whatever the Government pledged, whilst new science and cultural investments in the north of England challenged preconceptions of Conservative disinterest in the region.

Major reform of Stamp Duty demonstrated further political posturing, with the Chancellor announcing the abolition of the residential slab system to parry Labour’s “unworkable” Mansion Tax. The proposal would help 98 per cent of homebuyers and curb ever-growing house prices, he claimed. 

In another populist move, the Chancellor announced a refund on VAT paid by hospice charities, arguing that they had been subject to “unfair” rules for too long. 

Continuing this theme, Mr Osborne set out plans to crack down on unfair tax avoidance by multinationals through the imposition of a 25 per cent tax on profits being diverted out of the UK. 

Unsurprisingly, Shadow Chancellor Ed Balls argued that the OBR figures revealed a somewhat different picture of the UK economy. He highlighted that the watchdog had increased its projection for borrowing by £12.5bn over the next two years.

He also contended that wage growth was weaker than expected and working people were now £1,600 per year worse off than in 2010. This line of attack was taken up by Labour backbenchers, several of whom questioned the Chancellor on whether low tax receipts were to blame for the country missing his 2010 deficit reduction target.

During Prime Minister’s Questions, Labour Leader Ed Miliband had claimed that several 2010 Conservative manifesto pledges had not been kept, repeatedly asking the House: “Did he mean it?”

Mr Balls continued this suggestion that the Conservative leadership could not be trusted by implying that the Tories had left their promises on immigration unfulfilled, and could raise VAT – again – if returned to power in May 2015.

Largely unheard during proceedings on the Commons floor, the Liberal Democrats issued a press release claiming that measures announced in the Statement realised several of their core values, particularly those providing additional funding to the NHS, increasing the Personal Tax Allowance, and introducing a more progressive Stamp Duty.

These sentiments do not, however, seem to be shared by all Lib Dems. Business Secretary Vince Cable has reportedly referred to the changes to Stamp Duty as ‘Mansion Tax lite’, and even requested that the OBR reveal the different fiscal approaches advocated by his party and the Tories.

With the 2015 General Election fast approaching, today’s Statement seemed particularly political in nature, with all three political parties making it clear that they would not be outdone. 

Leah Miller
Political Analyst

Leah Miller is a Political Analyst within DeHavilland’s Editorial Team and leads on coverage of welfare, education and health issues. A politics graduate from the University of Sussex, she has previously worked for Crisis and the Runnymede Trust.