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Autumn Statement 2014: Something for everyone?

Seth Williams, ABI Seth Williams, ABI

If you cut George Osborne in half (and I’m not proposing or advocating such a move), I strongly suspect you will find the words ‘tactician’ embossed from head to toe. That said I think it would be unfair to say that the Autumn Statement didn’t also have an underlying strategy.

All eyes have been on the next General Election for some time now and one assumes the Chancellor would like nothing more than an out-right victory, and so while the exact breed of yesterday’s proverbial white rabbit wasn’t pre-briefed, it is not a huge surprise that there was one. The polls cannot be easily dismissed however and a sensible fall-back would be to have your eyes on a number of baskets and enough eggs to go around.

Much of the political Punch and Judy since has been around a deficit that still persists and borrowing that is higher than envisaged. But come ballot box time, George Osborne knows that many minds will be swayed by their own personal circumstances rather than whether the deficit has been cut by half or a third. Wannabe home owners, post-grads and small business owners will doubtless all feel better disposed towards the Conservatives come the General Election. It remains to be seen whether the junior governing party, the Lib Dems, can glean any credit for these and other measures announced today - much as they would have you think otherwise, another five years of coalition with the conservatives is probably the best outcome for them next year.

The Chancellor’s moves to abolish tax on inherited pensions as well as the new measures on inherited ISAs will work well with wavering grey conservative voters.

But this year's Autumn Statement was about more than impressive headlines over stamp duty and the price of petrol, crucially important as their mass appeal are to the Chancellor’s hopes of a majority Government come 8 May. Being able to claim that payments to Europe are down and announce measures to target employment benefits for migrant workers should help turn the soft UKIP vote, as will the continuation of the savings narrative from the March Budget.

Confirming his 2014 party conference headline, the Chancellor’s moves to abolish tax on inherited pensions as well as the new measures on inherited ISAs will work well with wavering grey conservative voters. Worth noting too that the negative rhetoric around the banking sector still persists – measures to take more money from the banks are not going to lose the Government any votes.

George Osborne leaves HM Treasury to deliver the Autumn Statement

'Keeping options open'

Yesterday's announcement was about giving a really strong narrative to natural Conservative voters come the election campaign – including fending off the threat posed by UKIP - but it was also about keeping options open. Take the devolution of corporation tax to Northern Ireland. Eminently sensible from the point of view of enhancing competition with the Republic of Ireland. Curious though, given the steadfast Westminster consensus against doing similar for Scotland and the process around the Smith Commission to drive forward a stable settlement. The thought of a further coalition with the Lib Dems might be unpalatable to many backbench Conservatives but in the event that the balance of power needs to be held elsewhere, there are other smaller parties that might be amenable – for a political price – to a confidence and supply arrangement.

For George Osborne, as for his opponents, the politics of every day of the next five and half months really counts.

As Ken Clarke said on Tuesday's Newsnight, this year's Autumn Statement was ‘politics, not economics’. He should know. The last time a Conservative Chancellor rebuilt the economy after a historic crash, the Conservative party went on to face historic losses at the subsequent General Election. The context for the occupant of number 11 then was a party that was divided over Europe and facing a threat from an anti-European party, intent on destabilising the Conservative vote.

The Economics are what they are (albeit somewhat revised on what they were), the ante has been upped for the General Election and the stage is now set for a real scramble for votes. For George Osborne, as for his opponents, the politics of every day of the next five and half months really counts.

Seth Williams is Assistant Director, Head of Public Affairs, Association on British Insurers.


Last updated 29/06/2016