UK Chancellor Jeremy Hunt has produced a highly political autumn statement that throws forward major cuts in public spending to after the next general election. The accompanying economic forecast by the government’s Office for Budget Responsibility (OBR) confirms that the country is facing a recession, with unemployment rising, inflation still high, and the average person’s standard of living dropping by 7% – wiping out almost all the gains of last decade.
The chancellor aims to ease the pain by increasing benefits and pensions in line with inflation. He is also raising spending on health, social care and education, while maintaining the spending levels already planned for all departments until 2024-25 in cash terms.
But this still means public spending will fall behind once inflation is factored in, particularly in departments not seeing increases today, with little room for any increases in public sector wages. And as we shall see, the plan is to tighten the screws after 2025 – forcing Labour to decide whether to back this plan at the next election.
