In the very first sentence of his Autumn Statement, Jeremy Hunt declared he had “put our economy back on track”.
After Covid, the war in Europe (which he mentioned) and the Liz Truss debacle (which he didn’t), the overall message was that normal service is being resumed. Here was the thin controller with a promise that the tanked engine of growth was restarting.
Of course, the problem is that for many voters the past few years of Conservative rule has been no way to manage a railway – and here were yet more twists and turns in the rollercoaster ride of their running of the economy and the country.
The trip has been dizzying, not least with ups and downs on tax. Today’s national insurance cuts follow a national insurance rise planned by Boris Johnson and his chancellor Rishi Sunak.
Small tweaks in personal taxes contrast with the huge £50bn personal tax bombshell caused by a six-year freeze of income tax thresholds (another Sunak decision).
Similarly, business being offered tax cuts won’t make up for the biggest corporation tax rise in history (again, a Sunak decision).
Talk of “the biggest business tax cut in modern British history…the largest ever cut to employee and self-employed national insurance…and the biggest package of tax cuts to be implemented since the 1980s” may curdle if we are still on track to have the biggest tax burden in history.
There was plenty in Hunt’s package that was welcome. A rise in the minimum wage, trying to boost business investment, speeding up connections to the electricity grid and changing pension rules to unlock capital are all good moves.
Hunt’s main difficulty is that for all the “hear hears!” from Tory MPs, voters may have given up listening – because they’ve heard it all before.
It is reaching for the welfare cuts of the David Cameron era (an era even more visible since Cameron’s recall in the reshuffle), while penciling in a new era of public service austerity after the election (what he euphemistically called “a disciplined approach to public spending”.)
But the biggest difficulty for the Tory party is its “plus ca change” problem: the more things change, the more they stay the same in a stagnant economy with crumbling public services.
Kwasi Kwarteng’s “kami-kazi” mini-Budget was a disaster, but the whole Conservative period in power carries another Japanese connotation that is just as damaging: Japan’s lost decade of anaemic growth. The small print of Hunt’s statement was downgraded growth for years ahead.
For good measure, Sunak risks repeating the late John Major era too. His thin King’s Speech had a strong whiff of Major’s “cones hotline”. Record NHS waiting lists and the repeated by-elections caused by MPs quitting amid sleaze scandals feel very mid-90s too. And everyone knows how that story ended.
And lost trust is even harder to recover than lost growth. No matter how many times Sunak says this is a “new government”, it can’t escape the shadow of the old problems of its predecessors. Polls show the public prefer any spare cash to go on public services rather than tax cuts.
Hunt said he wanted to “take decisions for the long term” but his panicked tax cuts – fast-tracking his national insurance cuts to start in January – are aimed at the short-term need to get the voters on board in time for a general election next year.
The Chancellor ended by saying the country “had turned a corner”. But after the rollercoaster ride of the last few years, the voters may not appreciate being told they’re on the right track. They may just want to get off the Tory train itself.
Look at the hidden small print behind Jeremy Hunt's panicked tax cuts
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22.11.2023
In the very first sentence of his Autumn Statement, Jeremy Hunt declared he had “put our economy back on track”.
After Covid, the war in Europe (which he mentioned) and the Liz Truss debacle (which he didn’t), the overall message was that normal service is being resumed. Here was the thin controller with a promise that the tanked engine of growth was restarting.
Of course, the problem is that for many voters the past few years of Conservative rule has been no way to manage a railway – and here were yet more twists and turns in the rollercoaster ride of their running of the economy and the country.
The trip has been dizzying, not least with ups and downs on tax. Today’s national insurance cuts follow a national insurance rise planned by Boris Johnson and his chancellor Rishi Sunak.
Small tweaks in personal taxes contrast with the huge £50bn personal tax bombshell caused........
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