Autumn Statement 2014: Whether the Tories are in charge next year or not, austerity will remain

None of the main parties have a reliable plan to fix our public finances

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The Independent Online

So, the Chancellor’s “long Term Economic plan” is bit more long term than he might once have hoped. Indeed, although, as George Osborne says, we are “on course for surplus” in the public finances, we are off course according to many of his plans set out only a few years ago.

There are plenty of valid excuses – not least the renewed slump in the Eurozone – but he too must take his share of the blame. As the Shadow Chancellor pointed out, the Coalition is borrowing some £219bn more than Mr Osborne hoped, and the books have not been balanced in this Parliament.

Most Autumn Statements have a few little garnishes laid around the main dish to offer a little extra interest and excitement. Mr Osborne’s was almost all garnish and not that much in the way of a main dish, not least because so much was trailed in advance (quite barefacedly and with great discourtesy to Parliament, if I might sound so prissy for a moment).

Almost every possible interest group was appeased with some tasty morsel; hospices, people buying or selling homes worth £25,000 (where stamp duty used to cut in so harshly), apprentices, commuters across the Pennines, widows and widowers who can now inherit pensions and ISAs, kids going on planes, you name it, Mr Osborne had a amuse-bouche for them.


Mr Balls did better than last time round, even when Tory backbenchers tried their best to unnerve him and get his stuttering again. Less impressive was his contribution. The truth is that neither Mr Balls nor Mr Osborne, nor indeed the Lib Dems, have a reliable plan to fix the public finances, especially when tax revenues are just becoming so disconnected from economic growth.

The answer to that is that we don’t tax things such as capital again on main homes that are driven by economic growth and making people richer. To the extent that the main parties have anything planned to sort the public finances out, they are really not very far apart. The truth is that such plans fail at their first brush with reality: oil prices, the Eurozone, stock markets, maybe even the unprecedented printing of money we have seen across the advanced economies — all can derail economies and spring surprises, sometimes nice, sometimes less so.

No amount of dressing should deceive us; there will be more austerity for the public sector, whoever gets into power next time round. Not that palatable really.