Chancellor George Osborne will deliver his fifth Autumn Statement on Wednesday 3 December 2014
"Long-term economic plan"
Chancellor George Osborne will use the opportunity to update Parliament on the Government’s taxation and spending plans based on economic forecasts produced by the Office for Budget Responsibility (OBR). With the 2015 General Election fast approaching, the Chancellor will also be keeping a steady eye on the polls with any extra allocations he announces.
Whilst the Conservative-led Coalition Government appears to have been making headway with its “long-term economic plan” throughout 2014, with a growing economy, rising numbers of people in work and falling inflation, Mr Osborne’s statement might contain some sour news.
Government borrowing has remained high and the Chancellor looks set to finish this Parliament well short of his deficit reduction target. Some have speculated that income tax revenues might fall short of forecasts, whilst the OBR could revise its assessment of the deficit. The Daily Telegraph laid out some harsh truths when it revealed that the Treasury is borrowing more than last year and cannot afford any pre-election giveaways.
Prime Minister David Cameron has been adamant that his administration must stick to its core fiscal and economic plan, despite observing in a Guardian article that “red warning lights are once again flashing on the dashboard of the global economy”.
NHS, infrastructure and devolution
This has not stopped ministers, MPs and other political figures from trotting out various wishlists of hints and desires.
During the Liberal Democrat conference in Glasgow in October, Business Secretary Vince Cable teased that the Autumn Statement would contain “something positive” on rates paid by small business. Meanwhile, Liberal Democrat Care Services Minister Norman Lamb used an interview with the BBC to call for up to £1.5bn in additional funding for the NHS. Mr Osborne went one further and announced an additional £2bn in the run-up.
Deputy Prime Minister Nick Clegg has singled out northern transport infrastructure investment as one of two potentially vote-winning areas in the Autumn Statement. This includes the promise of a fully upgraded and electrified rail network between Manchester, Leeds and Sheffield by 2025 and the addition of “smart lanes” on motorways such as the M62. On 1 December, the Government unveiled details of a £15bn road building programme.
Mr Clegg’s announcement fits with the Government’s intention to outline a long-term infrastructure plan with transport spending focused on areas outside of London, including setting out the UK’s first five-year road plan.
The UK Government also looks set to remove a logjam in the devolution debate through transferring Corporation Tax to the Northern Ireland Assembly.
"Cost of living crisis"
Other possible goodies in the Chancellor’s Red Box could include the allocation of foreign currency fines for the wider public good; the creation of a national loans system for post-graduate courses; and the establishment of a fracking fund to hold proceeds created by unconventional oil and gas in the north of England.
Ministers have tapped their noses knowingly on policies such as facilitating Gift Aid for smaller charities and offering a deal on ex gratia payments for nuclear test veterans.
The Government cannot afford to ignore organisations like the CBI, who have called for a focus on infrastructure investment, a supercharging of the R&D tax credit and a freeze on Air Passenger Duty on long-haul flights.
Labour has continued to place emphasis on the “cost of living crisis”, insisting that ministers must do more, where possible, to alleviate the plight of the worst-off.
Despite financial constraints, the Autumn Statement is set to contain some surprises. It will be one of the Coalition Government’s last chances to cement its economic message with the public before next May. Ministers intend to make it count.
DeHavilland’s Editorial team will be covering the Autumn Statement and key responses in full live on the day, ensuring our clients do not miss any important announcements. Our team of Political Researchers will also be producing sector-specific round-ups of the key points and responses from stakeholders.
Guess how long the Chancellor will be on his feet while delivering the Autumn Statement for a chance to win Bloomsberg political editor, Rob Hutton's latest book, 'Would They Lie to You?'.
Mike Indian is Political Consultant and a member of DeHavilland’s Content team, leading on infrastructure and Scottish affairs. He leads on DeHavilland's dynamic content, specifically videos and podcasts, and regularly appears in the media as a political commentator. A graduate of Lancaster University, he has worked as a freelance journalist.