Autumn Statement / Budget Switcheroo Explained

Philip Hammond woke everyone up when he said this was his first Autumn statement but it would also be his last… “Mr Speaker, I am abolishing the Autumn Statement!” The Autumn statement will now be in Spring and will be a response to the OBR rather than an opportunity to announce new policies, the Budget will be moved to the Autumn. Less pulling out rabbits, more moving the hats…

Minister Slammed Letting Fees Ban Just 8 Weeks Ago

The big Autumn statement announcement pre-briefed to today’s papers is that the government is banning letting fees. This is yet another u-turn by Theresa May – just 8 weeks ago her housing minister Gavin Barwell publicly dismissed the proposal as a “bad idea”. Such a bad idea that May herself voted against it in 2014, and the Tories voted the same policy down again in 2013. Kate Andrews from the Institute for Economic Affairs says:

“The Chancellor can come in and not have to commit any of his own spending to do something that seems like it’s trying to help those who are just managing. But of course this is him skirting around the issue of the housing crisis altogether… Politicians will implement the dumbest policies to avoid actually addressing the issue.”

As the National Landlords Association explains, tenants will still foot the bill:

“Philip Hammond lacks any understanding of how the sector works. Agents will have no other option than to shift the fees on to landlords, but adding to landlords’ costs will only push more towards increasing rents.”

Yet another Miliband policy gimmick pinched from Labour’s 2015 manifesto. The politics make sense, the papers have written it up kindly, but even the minister knows the policy is a dud.

UPDATE: Barwell speaks:

“It is the nature of the job that you have to defend current policy even when you’re working to change it.”

Autumn Statement Panned on Inside Pages

Look only at the front pages and you would think Osborne’s Autumn Statement had been met with almost universal approval. Delve inside and the analysis is very different. The Telegraph’s business team in particular are scathing, with Ambrose Evans-Pritchard calling for “a change of course”:

“For sheer brass, it is hard to beat the mellifluous assertions of the Chancellor. “We do not shy away from the problems that remain unresolved in the British economy,” he began. From there George Osborne escalated to an outlandish claim. “Out of the red and into the black for the first time in a generation, a country that inspires confidence around the world because it seeks to live within its means.” This comes a day after Société Générale said the UK “cannot compete”, is on an “unsustainable” course and has carried out “zero structural reform” – a view held to varying degrees by a great number of economists around the world. Britain has a current account deficit of 5.2pc of GDP, in spite of the post-Lehman devaluation. It is the worst of any major country, and just about the worst in our peacetime history. The Office for Budget Responsibility has now raised its estimate of the likely deficit by 1.5pc of GDP annually to 2018. It is becoming entrenched. This is prima facie evidence that we are not in fact living within our means.”

Allister Heath meanwhile condemns the new wealth tax on homes:

“this improvement [to stamp duty] has been ruined by the fact that George Osborne has conceded the philosophical ground to the property and wealth-hating Left and turned stamp duty into a horrendously graduated tax. People with more expensive homes will pay cripplingly large amounts to the Exchequer for the privilege of buying a home, a move which is bad on all levels. The top marginal tax rate will hit 12pc; time and again, it seems, the Government adopts Labour or Scottish National Party policies. For decades, property transactions were rightly barely taxed; now they are a milch cow.”

And Jeremy Warner isn’t exactly impressed:

“Listening to the Chancellor’s statement, the overriding sense was of déjà vu. Rewind five years, and almost exactly the same things were being said. There was George Osborne announcing plans to close the Budget deficit within the five year lifespan of a single parliament. There was his then Labour opponent, Alistair Darling, saying it couldn’t be done, would send unemployment rocketing, would destroy the fabric of society, and to boot would undermine growth and therefore prove self-defeating. And here we are again today, listening to much the same script, only with the positions reversed; Mr Osborne has had nearly five years as Chancellor, and Labour is in opposition. It scarcely needs saying that in terms of what the Government said it would do back then, it has failed.”

The Sun’s Pol Ed has a pop:

“It’s also quite a left wing move… what effect will all this have on economy with a new housing and mortgage debt bubble now possible, you may well ask? Well that’s a problem for after the election, of course.”

As does their City editor:

“For the moment George is still borrowing tens of billions a year to make ends meet. The Government can borrow more easily than families because it sets its own interest rates. But this is still a colossal bet that we will all, somehow, get much richer soon, and be able to pay the debt back. The Chancellor’s failure to cut the deficit as much as he hoped is a black mark against him. Cute ideas about a “Google tax” or a cut to stamp duty on cheaper houses can’t disguise that.”

Osborne will take the splashes, but will hope no one reads too closely inside…

In Numbers: Stamp Duty Savings Explained

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Read the Autumn Statement in full here.

Tories claiming savings for 98% of buyers. 

UPDATE: People seem happy:

Everything You Need to Know About the Autumn Statement

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Helpfully compiled by the BBC.

Osborne’s Poll Ratings Slide As Conservative Lead on the Economy Grows

As Osborne delivers his Autumn Statement today, a YouGov poll for the Sun finds his personal ratings have dropped from -3 to -8 over the last nine months. Optimism that the economy will improve is down from 39% to 25%, while pessimism is up from 23% to 32%. The Chancellor’s credibility will hardly be helped this afternoon when he announces OBR numbers confirming he has missed his deficit forecasts and that there is a £50 billion black hole in public finances, when in the same speech he pledges:

  • £3 billion extra cash for the NHS
  • £15 billion for road improvement infrastructure spending
  • £400 million extra to the British Business Bank
  • £500 million of new lending guaranteed
  • No fresh cuts

Cynical Neo-Keynesianism nevertheless appears to be paying electoral dividends for the Conservatives, proving once again that voters prefer jam today to jam tomorrow. This generation of voters prefers to put the burden for its profligacy on the next generation…

osborne-poll

The Times leader puts it plainly: “What is clear is that he has decided to risk what progress has been made towards repairing the nation’s finances on an electorally inspired spending spree that will have to be funded… at least partly with debt.” Douglas Carswell has a point when he says Osborne will today deliver Gordon Brown’s 18th Autumn Statement

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Quote of the Day

Expelled Tory MP, Richard Benyon, on the short three-day Programme Motion for the Withdrawal Agreement Bill:

“Whether you had three days, three weeks or three months debating this, you would not hear one original argument that we hadn’t otherwise heard in this process…”

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