Jeremy Hunt, plucked from political obscurity, did a good job of presenting the most unpalatable financial statement in decades. In a reversal of Prime Minister Harold Macmillan’s 1959 claim “you’ve never had it so good”, the Chancellor could have summed up the situation with “You’ve never had it so bad.”
There is to be an incredible 4% fall in living standards. Covid and the Ukraine war have played a part in this, but never forgive the Tories for Brexit and Truss when it comes to the next election. No other economy, which has also suffered from the pandemic and Ukraine, are having to bring in cuts and tax rises like this. They have masked the truth that Brexit has lost us trade and vital workers and Truss cost us our economic credibility.
Hunt has backloaded the worst of the cuts, partly in the hope that things will look up and he won’t have to make them, but mostly to make it difficult for an incoming Labour government. The freezing of tax allowances until 2028 is another move designed to pile the pain on after the Tories have been kicked out of office. It is the main way in which the government is going to raise more tax as millions are drawn into paying more. Crucially though its main impact will be in later years. Restrictions on local authorities in respect of council tax have been eased. Strapped Town Halls are likely to go for a 5% rise.
Tatton MP Esther McVey is asking what is the point of Conservatism with these tax rises? We’ll see if she leads an effective rebellion.
It is not clear to me how the Chancellor’s statement is going to deal with the serious labour shortage. Train and bus operators haven’t enough drivers; pubs and restaurants are having to shut two days a week for lack of staff. Brexit, illness, the huge cost of childcare and inflation making it not worth working have all contributed to this problem.
The one bright spot was that devolution seems to have been saved. HS2 to Manchester and the core east-west rail investment seems secure, although the “core” seems to leave Bradford out. New devolution deals are ready for signing in the West Midlands and Greater Manchester. The announcement that four County Deals are about to be signed from Cornwall to the Northeast should encourage those backing one for Warrington and Cheshire. A conference to consider this is due next week.
The Shadow Chancellor Rachael Reeves is rightly claiming a lot of the economic problems are home grown. She said the Chancellor had presented “an invoice for economic carnage.” Reeves must be expecting to be in government in 2 years because there is an old political adage that if people answer the question “Do you feel better off?” in the negative, parties in power lose the election.
LABOUR DEMOCRACY IN BURY SOUTH?
Tory defector Christian Wakeford has been imposed by Labour’s National Executive for the next election. There is no by election rush to justify denying the local party a say. My sources tell me that there is deep anger and even Wakeford supporters would have liked to see him locally endorsed. We are back to the days when ex Tory Shaun Woodward was imposed in St Helens.
Meanwhile Dec 15th is to be the date of the Stretford and Urmston by election following Kate Green’s resignation. A poll in Chester is due on December 1st but there is still no sign of Rosie Cooper actually standing down in West Lancashire due to her taking a health service job on Merseyside.