PLMR Analysis: The Autumn Statement 2013 | PLMR.co.uk
From the award winning PLMR Team, voted ‘Consultancy of the Year’ at the 2013 Public Affairs News Awards
Today, the Autumn Statement was delivered for the 31st time in British history. With the exception of the Budget, it is the only time the Treasury makes a statement to Parliament regarding economic publications, specifically the economic forecasts.
George Osborne and his team had already leaked a number of the key announcements before today, with some believing this was an attempt to avoid policy announcements overshadowing growth figures and other crucial economic statistics.
In the main event the figures certainly did not disappoint. The Chancellor gleefully announced that the independent Office for Budget Responsibility is now predicting GDP growth of 1.4% this year and 2.4% in 2014 – a sharp contrast from March’s Budget, where growth predictions were estimated at a mere 0.6% and 1.8% respectively. This was the first time since he arrived in Number 11 that the Chancellor was able to announce upgrades to the economic forecasts produced by the OBR.
There was further good news with the public sector net debt, which is now expected to peak a year earlier, in 2015-16, at 80% of GDP. Government borrowing has also been revised down from £120bn to £111bn in the current fiscal year; £96bn instead of £108bn in 2014-15; and £79bn instead of £96bn in 2015-16.
Some of the key policy announcements today include: £375bn of investment in energy, transport, communications, and water projects; an extra £1bn of cuts from the budgets of Government departments for each of the next three years; business rate increases in England and Wales capped at 2% next year; as well as plans to scrap the planned 2p per litre fuel tax rise next year.
Below our cross party team of experts takes a look at today’s statement from the perspective of the three main parties.
LEON EMIRALI: “IT’S WORKING!” SAYS OSBORNE
Leon Emirali is a Senior Account Executive at PLMR. In his private life, Leon is a member of the Conservative Party and a former parish councillor in Central Bedfordshire. In 2012, he stood as a Conservative Party council candidate in Coventry. He has also spent time living and working in China as part of an initiative to bolster Anglo-Sino commercial understanding.
It was a case of “I told you so” as George Osborne delivered his Autumn Statement today. Unemployment will fall to 7% by 2015 when it was originally predicted to rise; borrowing will be £73bn less over five years than first thought and a surplus will be delivered in 2018/19. Despite these encouraging numbers, the Chancellor was quick to caveat that this was to be a “responsible recovery” and that there is plenty more to be done. Tory backbenchers and grassroots party supporters have every right to be pleased with what was delivered today, in spite of the unpopular rise in the state pension age which, alongside Nigella Lawson, was splashed on today’s front pages. A recent poll by Conservative Home says that the top priorities of the 1,700 people polled were the cutting of green energy taxes, more nuclear power stations and a reduction in business rates. Osborne delivered on all three. The Chancellor was buoyed by raucous and animated benches behind him, all the more so when Ed Balls took to the dispatch box. Osborne’s confidence grew as the statement progressed and he delivered cutting blows to the Shadow Chancellor during his closing remarks. In what was an evidently well-prepared statement, the Chancellor knew what Labour’s attack lines would be and confronted them head on. This was to be a recovery for all of Great Britain, with £1bn pledged to unblock housing developments in Manchester, Leeds and beyond. The rich weren’t immune from ‘being in it together’, with top earners contributing more income tax than under the last Labour government. And the ‘cost of living crisis’ was to be eased by a freeze on fuel duty, tax breaks for married couples and a £50 reduction in energy bills due to the scrapping of green levies. Amongst the positive news around key economic indicators, Ed Balls’ response would have been the other key highlight for the Tories. Judging by reaction on Twitter, he failed to convey the image of a Chancellor-In-Waiting and finished off a very good day at the office for Osborne and co.
STEVEN GAUGE: SHAKING, BUT NOT STIRRED
Steven Gauge is a Senior Advisor and Head of Training & Conferences at PLMR and spent the last two general elections on the road managing media events in battleground seats for Nick Clegg and Charles Kennedy. He has served eight years as a local councillor, award winning election agent, parliamentary candidate and was also Chief Executive of the Suzy Lamplugh Trust.
As the junior partner in the coalition, the Liberal Democrat role in the formal theatre of the Autumn Statement was limited largely to Nick Clegg shaking his head whilst seated on the left of the Chancellor. The Deputy Prime Minister affected a look of, “more in sorrow than anger” as George Osbourne gleefully revealed figures suggesting that the last Labour government dug the economy into a deeper hole than had been previously thought. Meanwhile the party’s spin doctors have been busy trying to squeeze the Lib Dems into the news story. The Chief Secretary to the Treasury, Danny Alexander has been touring the studios in the past few hours, keen to claim credit for £375 billion of public and private sector investment of investment in energy, waste, transport, flood defence, water and communications. Nick Clegg himself as a father of two young boys, wants to be personally associated with an initiative to make school meals free for infant school pupils from 2014. The biggest problem for the party leadership will be the anger from activists and local councillors on the issue of welfare benefit caps. Party conference delegates at the Autumn gathering in Glasgow had to endure protests about the so called Bedroom Tax and voted to reject it given the chance. The Lib Dem grass roots might not like the way the welfare debate is going, especially those fighting Labour in the inner cities, but the top brass know from their private polling that getting tough on benefit claimants is popular with voters. With the party still struggling in the polls, Liberal Democrats have yet to realise that their failure to get any credit for the economic recovery will hurt them badly at the next election. The mantra of Stronger Economy, Fairer Society is being chanted at local party annual general meetings and cut and pasted into every single focus leaflet, but still very few voters seem to recognise a Lib Dem role in steering the country out of recession. Nick Clegg wants the public to believe that the recovery wouldn’t be happening without the Liberal Democrats. He will take every opportunity to remind people how deep the recession was and of the massive debt he inherited. He will try to take the British public back in their minds to those crazy five days in May 2010, when the economy was on the brink of collapse and he walked into Downing Street as the Deputy Prime Minister of an historic coalition government. For the Liberal Democrats establishing a credible, causal link between getting the Liberal Democrats into government and the economic recovery three years later remains one of the biggest communications challenges that the party has ever faced. It’ll take a lot more than a few shakes of the head from the green benches to get that message across.
DAVID MADDEN: A TOUGH DAY AT THE OFFICE FOR THE SHADOW CHANCELLOR
David Madden is a Senior Consultant at PLMR and Head of the company’s Planning Team. Outside of work David is a member of the Labour Party and has worked on a number of local and general election campaigns, most recently as part of the team helping Kate Hoey MP to achieve an increased majority in the 2010 election.
Ed Balls will have woken up this morning knowing in his heart of hearts that today was probably going to be a bit of a stinker. For members of the Labour Party, sad to say, this has proven to be the case. The fact is Britain’s economy is recovering, and recovering strongly. The Shadow Chancellor’s former argument that George Osborne’s austerity measures were stifling recovery rings hollow in the face of the publication of the biggest upgrade of growth forecasts in 13 years. However, Labour has a pretty clear narrative on this subject – yes, the economy is recovering, but it’s not trickling down to the large majority of the UK population, who are actually facing a real cost of living crisis. In the lead-up to the Autumn Statement, Labour has been able to make good ground on this narrative, particularly around the government’s disjointed action on energy prices. The Shadow Chancellor had an opportunity to build on this narrative today. The Government continues to be extremely cautious on spending, with the Chancellor repeating the mantra that ‘the job is not yet done’, and ‘the improvements we have made could easily be lost’. This means he has been unable to announce any policies that will really make a measurable difference to the average family’s income, certainly in the short term. But the coalition benches could smell blood in the water; Osborne delivered a confident speech in measured tones, assisted by the Speaker calling to order some of the more rumbustious Labour hecklers. Balls, by comparison, was jeered right from the start of his response. Consequently, he got louder and louder, and looked less and less composed. His messages were disjointed and lost amidst the spectacle of his ever increasing ire. Even his one killer line on Iain Duncan Smith’s Universal Credit failures, ‘IDS stands for In Deep Shambles’, was lost to the crowd, and the instantaneous feedback from Twitter was damning, with Lord Ashcroft jokingly pleading to Ed Miliband, “please please don’t sack your shadow chancellor.” Today was the government’s and particularly George Osborne’s day. There is no love lost between Balls and Osborne, who relished making repeated digs at Balls in his riposte, notably painting a striking picture of the Shadow Chancellor asking his piano teacher if he can start again if he gets it wrong. Ed Balls has his work cut out recouping this lost ground, but as most of the nation continues to hear stories of economic recovery, whilst still having to live with less money in real terms, he’ll have plenty of ammunition to fight with. So long as he keeps his temper, and his job.