My verdict on the Autumn Statement
It may be called the Autumn Statement, but there was snow on the ground on Wednesday morning and the chancellor’s political theatre is beginning to impinge on Christmas. Before long, George Osborne will be vying for screen time with Her Majesty’s Christmas message. Instead of fighting over whether to watch an old Bond movie or a rerun of The Snowman, families will be able to argue over which of two joyless perorations to endure.
Budget speeches, and the mini-budgets that Autumn Statements have become, once involved the dispensing of little treats. No longer. Instead of stocking fillers, the chancellor is handing out the political equivalent of coal and wrinkled satsumas.The statement itself was not the only thing that was pushed back: so, too, was the date at which debt will no longer be an increasing proportion of gross domestic product. In this respect, at least, Mr Osborne is outperforming Gordon Brown. Mr Brown’s fiscal rules would simply have been stretched to accommodate changing circumstances. At least Mr Osborne has the decency to admit that he is about to break one of his fiscal rules. You can guess which one: the debt/GDP target involved a measurable quantity and a firm deadline, so of course it was vulnerable. The other fiscal rule invokes an endlessly postponed and never verifiable forecast of things to come, and you may not be surprised to hear that Mr Osborne is still “on course” to achieve it, whatever that is supposed to mean.
I would like to make a modest proposal: that the next Autumn Statement should also be endlessly postponed – or perhaps, like the 3p rise in fuel duty, endlessly postponed and then eventually cancelled. It is hard to say what the current arrangements are supposed to achieve. Two budget statements per parliament would be enough. Now we must endure something very like two budget statements per year.
Mr Osborne, walking in the footsteps of Mr Brown, has realised that you can bludgeon most audiences into depressed acquiescence if you simply intone numbers relentlessly. The deficit was falling, he assured us: 7.9 per cent last year; 6.9 per cent this year; 6.1 per cent next year. The percentages rolled on and on. Your correspondent scribbled frantically. Perhaps percentages were unhelpful? Perhaps we’d like to hear it all again expressed in billions of pounds?
The numbers continued, metronomic, merciless. He had given us numbers “with the asset purchase facility cash transfer included. When the transfer is excluded … ” Watching this was like being strapped to a comfortable chair and flogged gently with a wet sock.
“7.9 per cent” Splotch.
“7.7 per cent” Splatch.
“6.9 per cent” Splotch.
Confusion was beginning to set in. Ed Balls, who had connived in a decade of Mr Brown’s Budget speeches, was being subjected to his own medicine and flipped agitatedly through his papers. A colleague turned to me: “was that per year or across a three-year period”? I didn’t know. Nobody knew. Splotch.
Were the numbers millions or were they billions? Did anybody believe a word the chancellor was saying? Could anything make it stop? The wet sock continued. Splatch.
Mr Osborne, alas, has realised that numbers are weapons. His numbers are not very good ones but as the saying goes, quantity has a quality of its own.
When the sock-slapped fog lifted, was there anything of substance to report? Not much. The overall fiscal stance is unchanged. Mr Osborne revealed that both those who thought we should borrow more and those who thought we should borrow less were wrong. As far as the global economy was concerned, everything had changed. The only fixed point in the hurricane were the chancellor’s fiscal plans, which miraculously turned out to be perfectly judged after all.
At least, we were assured, growth is projected to be stronger in the UK than in France or Germany. Without pausing to draw breath after this boast, Mr Osborne invoked his fiscal credibility. Never mind the fact that according to the OECD’s latest forecasts, the UK government deficit next year will be twice that of France, and many times that of Germany. Growth. Fiscal credibility. Don’t think too hard about any of this.
First published at FT.com