George Osborne. Photo: M Holland
Autumn Statement 2014: The Touchstone roundup
The Chancellor’s Autumn Statement is in the papers today for stamp duty changes to help home buyers and a clampdown on tax avoidance. Our bloggers have been unpicking some of the other details though, and they’ve found a rather less rosy picture:
- Philip Pearson saw little or no benefit for green growth. Green taxes seem to be used as a revenue raiser rather than helping to build green jobs, and the Chancellor announced government money to help the fracking industry make a better public case.
- Richard Exell looked at the freeze to Universal Credit work allowances. It’s an obscure change to the calculation of in work benefits that might pass unnoticed, yet it could have a big effect, seeing low income workers lose £600m a year by 2017-18.
- Sally Brett took issue with the Chancellor’s claim that the gender pay gap is at an all time low.
- Janet Williamson was concerned that projected Treasury income from public sector pension reevaluation was merely hiding a spending cut to public services.
- Paul Sellers saw continued missed opportunities on housing, with measures on public land, garden cities and council housing inadequate to meet the need, and the headline stamp duty changes more of a pre-election sweetener than a credible solution.
There were measures to welcome too of course:
- Janet Williamson welcomed the measures to tackle tax avoidance through base erosion and profit-shifting, but is concerned the Chancellor’s projections are based on unreliable data and may be overestimated.
- Paul Sellers looked at the promise specifically to crack down on the ‘umbrella company’ tax trick that is used to duck both tax and employer resposibilities for work rights, especially in the construction industry.
- And from an industrial perspective, Tim Page was pleased to see spending for infrastructure projects, though sadly a missed opportunity for the longer term in funding for innovation.
But overall, the Office for Budgetary Responsibility’s scathing commentary on the statement gave the greatest concern:
- Geoff Tily looked at the wider economic picture, and finds a Chancellor whose original economic plan failed and who is now trying to dress the poor results up as success.
- And Nicola Smith highlighted some key areas of the OBR response, particularly the concern at the economic damage that will be wreaked by the vast scale of further spending cuts the Chancellor proposes, and the increasingly regressive ways the economy will be balanced.
If George Osborne returns as Chancellor after the next election, and tries to stay the course that he’s outlined today, we’ll see little to give Britain the pay rise it needs to grow our economy. Austerity has failed to deliver the results the Chancellor promised, and as Frances O’Grady blogged, his expanded spending cuts plan for the next Parliament is economic self-harm, threatening a vicious circle of further decline.
— ToUChstone blog (@touchstoneblog) December 4, 2014