Jeremy Hunt’s autumn statement is an institutionally fatal confrontation between economic libertarianism and reality. Under his self-imposed rules, the government’s programme of the biggest tax cuts since 1988 is to be paid for by future state shrinking so dramatic that it threatens to “bankrupt” essential public services. The speech was dressed up in true-blue clothing, with talk of cutting benefits of the workshy and a big share sell-off. But underneath the garb was an ossifying ruling party desperate to forestall public disillusionment with policies that have become a recipe for disaster.
Voters face lower living standards than before the pandemic, and will pay record levels of tax, while performance in eight out of nine major public services has declined since 2010. Such a reality won’t escape their minds with an election likely next year. The record of administrative failure, extreme inequalities and stuttering growth should have prompted reflection about the direction of travel. Instead, Mr Hunt doubled down, targeting Tory voters with big giveaways. The IPPR thinktank calculated that the richest 20% of households gained almost half the tax cuts – with those in south-east England the biggest winners.
John Maynard Keynes observed that “some sophistry, some fallacy” lay behind government decisions to be mean with the “the embellishments of life”. The deception here lies in Mr Hunt’s fiscal rules, which set a date to meet rolling targets for national debt and budget deficits that never arrive. This allows for sleights of hand: half of Mr Hunt’s autumn statement “headroom” is explained by a fuel duty rise that is unlikely to materialise.
The Office for Budget Responsibility has admitted that growth will be slower and inflation and interest rates will be higher for longer than it previously thought. This when deregulation and the shrinking of the safety net have abandoned a growing proportion of the population to precarious work for meagre wages. The Tory answer is an agenda of harsh austerity and culture wars, which will only see deeper social misery and further economic decline.
On the day that Mr Hunt gave his Commons address, the Guardian reported that growing numbers of people in England and Wales are being found so long after they have died that their bodies have decomposed, a shocking trend that doctors say is linked to cuts and social isolation. Such a finding only emphasises that there is more to life and death than GDP. Progress in life expectancy in Britain has stalled, and in its poorest parts it has actually started to fall – with an underfunded NHS likely to be behind the drops. It is unforgivable for health services to see, under Mr Hunt’s plans, real funding growth shrink.
In response, the Labour party has largely retreated to a similar pro-market and low-tax agenda as the Conservatives, but with an emphasis on equality of opportunity and choice. This is a mistake, and one that is amplified by the historic chance offered by the Tories’ poor standing in opinion polls. Whoever wins the next election either has to repudiate Mr Hunt’s disastrous cuts or enact them. Labour, understandably, want to avoid becoming ensnared by the traps being laid by Mr Hunt. Sir Keir Starmer’s challenge to the Tories’ dangerous policies has been mainly rhetorical. But his party remains the best chance for Britain to deal with the deepening systemic risks – such as the climate emergency and an ageing society – in need of urgent attention. Labour should show why this is the case.
