Autumn Statement: Less is not more, Mr Osborne

The Chancellor sprinkled goodies but failed to address the really big questions

When the main talking point to emerge from a major statement by a nation’s finance minister is a reform to stamp duty on residential property, then you know there are some big issues being ducked. In the case of George Osborne’s Autumn Statement, it was the reality of a deficit that remains stubbornly high, a tax base that is not delivering the revenues to reduce it, and government borrowing that remains dangerously close to £100bn a year.

Back in 2010, at the start of the Coalition’s term of office, the aim was that the national books should be balanced by now. That is not all Mr Osborne’s fault – the renewed slump in our largest trading partner, the eurozone, has a lot to do with it – but whether he is culpable or not, we are where we are, as the politicians say. It is not where we should be.

So this was a disappointing statement, and not only because so much of it was barefacedly leaked in the days before, echoing the worst of New Labour’s habits of spin and contempt for the rights and privileges of the House of Commons, always the last to know the Treasury’s plans. It was also anti-climactic because the Chancellor lavished so much time on the garnishes he presented to the nation, rather than what should have been the main meat of the statement – a convincing plan to cut borrowing and debt once and for all.

Thus, we were treated to a Chancellor doing good work for genuinely deserving groups, righting some long-standing injustices. Who, for example, could argue with tax breaks for hospices? Who could object to children being exempt from air passenger duty? Or national support for Wallace and Gromit?

The list went on: new trains for trans-Pennine commuters; support for apprenticeships; widows and widowers who can now inherit pensions and Isas. All laudable reforms. As, in fact, is the revolution in stamp duty, the old “slab” system of levies being a completely irrational way of taxing anything, let alone wealth.

Now people with homes around the £250,000 mark can buy or sell more easily, plus we have a hint of a mansion tax for the top end, occupied by the global super-rich. Mr Osborne has also turned his attention to the tax-dodging activities of big corporations, adding a few more useful billions to the tax take and the cause of social justice.

All of which leaves the deficit more or less where it was. Even taken together the measures are not fiscal game-changers. Mr Osborne failed to talk about how to rationalise and modernise the tax base so that economic growth delivers the tax revenues to bring the deficit down.

Despite some significant announcements about freezing benefits, the Chancellor was also reluctant to face up to a radical rethink of what the British state does, and why. Ed Balls, for his part, was content to rubbish Mr Osborne rather than talk about the future, even when boorish Tory backbenchers gave him the chance. The mansion tax and the 50p rate are not the answer to a deficit that is big and structural. Mr Balls has the edge on Mr Osborne in his more pragmatic approach to targets; it is senseless to pretend that an economy can be predicted five years out.

More austerity is inevitable. The voters might prefer to listen to a party that tells it the harsh truths about the economy and public services. Or, as Mr Osborne and Mr Balls have obviously concluded, maybe not.