What Jeremy Hunt did not make clear in today’s autumn statement was that living standards are set to fall by 7% over the next two years, according to the independent Office for Budget Responsibility. Imagine turning the clock back to 2013, but not in a good way. Inflation will remain uncomfortably high next year as the protection against high energy bills diminishes. Taxes will rise over the next six years through a hidden freeze on tax-free rates that apply to everything from earnings to inheritances and national insurance contributions, so over time more of what you have is being sucked into the tax nets. tax officials. You’re not exactly going backwards, but you’re not moving forward as you expected, and the things you wanted feel increasingly out of reach. Meanwhile, from 2025 onwards, some spending departments face frankly improbable spending cuts in real terms. Pay more taxes, get less in return. It’s not jam today or even tomorrow, but years of dry toast. It’s all so politically toxic, it’s hard to believe it will ever actually happen, particularly as so much of the pain is pushed into the next parliament. Does the government assume it will be a Labor problem by then? Or just hope that something will come up, allowing them to say that it’s actually no longer necessary? There was a strange air of unreality hanging over this statement, seemingly designed to demonstrate Rishi Sunak’s willingness to undergo whatever ritual humiliation the markets require to prove he is not Liz Truss. Take a step back, however, and the whole thing is a humiliating admission of failure. The only thing painfully absent was the word ‘sorry’, not just for the Truss era but for the 12 lost years that followed. To the derision of Labour, Hunt insisted that the recession we are now in again was “made in Russia”, not here. But while the war in Ukraine has certainly fueled inflation, Britain’s problems have deeper roots. We are the only G7 country whose economy is still smaller than it was before the pandemic, and it wasn’t exactly a runaway success back then. Economic growth since 2010, according to Labour, has averaged a positively anemic 1.4%, productivity is dismal and successive Tory governments have no cure for what ails us. Bank of England governor Andrew Bailey this week helpfully offered two reasons why Britain might be struggling. Brexit is the obvious one, estimated to have permanently shrunk GDP by 4% compared to staying in the EU, but the second was a shrinking workforce. The sharp rise in people not working due to illness is suspiciously closely linked to rising NHS waits for treatment – with overburdened mental health services a potentially significant part of this, especially for young people. The next preventable exit on the horizon may be parents of young children, with a poll of Mumsnet users showing that 18% have given up or are considering giving up work because they would be better off unemployed given the cost of childcare – the which is so high thanks to the chronic systematic underfunding of nursery schools. (That sound you hear is the clucking of chickens coming home to roost.) Being forced to stay at home when it is not what you would have otherwise chosen is sad, frustrating and financially devastating. it means people are lost to jobs in which they could have made useful contributions to society, and taxes lost to the Treasury. Hunt’s promised review of barriers to the workforce is welcome, but only if it honestly investigates and tackles factors like this. Because if public services have already collapsed to the point where they are actively holding the country back, the years of spending cuts ahead look even more worrying. Economists will no doubt argue for years about whether this not-quite-a-budget was in hindsight a panicked overcorrection for Truss’ wild adventures, imposing cuts that would only deepen the coming recession, or whether failure to act would have made things worse. But all we can say for sure now is that it’s not just austerity 2.0, which for many natural Tory voters was broadly something that happened to other people. No one is immune this time, with tax rises doing far more of the heavy lifting than under Osborne: anyone with a job, a petrol bill or a car, or pays council tax, will feel it, but the tax changes of capital gains will mean the second home and share ownership classes. There are glimmers of the promised compassion. Benefits will rise at least with inflation, there is a massive rise in the national wage and the poorest get extra support with energy bills. But protecting vulnerable people is not just benefits. It also means funding schools where students haven’t yet realized what they’ve been missing out on during Covid and knowing that if you call 999 in an emergency, the ambulance won’t take four hours to arrive. In 2010, hospitals and schools were in good shape thanks to the generous funding of the Labor years, so when the tap was turned off it took a while to feel the difference. This time, there will be no such grace period and the extra billions promised for health, education and social care will surely be quickly swallowed up by inflation and public sector wage rises. Ever since Rishi Sunak emerged blinking from the wave that engulfed Liz Truss, the country has been wondering what Sunakism really means. To call it a return to “adult politics” simply describes a basic level of competence we should be entitled to expect from senior politicians: to take advice. Reading the brief instead of making it up. leveling with voters, not lies. He doesn’t tell us what he really thinks. But neither is this quasi-budget after all. The decisions described here are technically choices, as a different government might have chosen differently. But they are not choices in the sense that Sunak really wants. They are the kind of choices Conservatives only make when they are exhausted, defeated, in a corner. This government looks more and more like clockwork, taking the field willingly enough but knowing it has little chance of changing the score. And like the rest of us, we’re just treading water, waiting and hoping something happens.
