Autumn Statement 2023 – Count the pennies and the polls will look after themselves
November 22nd, 2023
Today’s Autumn Statement rounds off a busy November in UK politics, even by ‘Westminster bubble’ standards. The King’s Speech and removal of Suella Braverman in the recent Cabinet reshuffle already seem old news. The last few weeks have produced a lot of material to digest, however, they have also been pivotal in setting the scene ahead of the 2024 General Election. So, what have we learnt?
We have the main characters; enter Lord Cameron as the plot twist nobody saw coming. We have the battle grounds of inflation, productivity and the cost-of-living crisis. The Prime Minister and Chancellor are turning their minds toward how they deliver a fairy tale ending in the face of polling adversity for the Conservative Party.
Much of Rishi Sunak’s strategy leading into next year’s election has, so far, sought to put clear distance between how the public view him compared to his most recent predecessors. Inflation reduction is a direct counter to Liz Truss’ economic tumult. ‘Long-term decisions’ as a slogan seems an attempt to juxtapose the snap judgement calls of Boris Johnson’s Cabinet during the pandemic.
As much as Sunak is turning away from the previous occupants of Number 10, today’s statement from his neighbour at Number 11 took another new direction.
With a gloomy polling outlook overshadowing the build up to today’s Autumn Statement, the Chancellor’s announcements aimed to defend the Government’s ‘Conservative’ values, with a mantra of tax cuts and fiscal responsibility creeping back into the rhetoric. This can be seen through the cuts to the national insurance rate amongst a range of measures to incentivise employment.
Much of the pre-statement speculation also focused on tax reduction amid a surprise uptick in economic performance. That focus is no accident. The Prime Minister’s top team hopes that the Autumn Statement represents a Conservative Party getting the economy back on track, getting people back to work, and cutting their taxes while they’re at it. It also demonstrates the targeting of their core voter base to bring pensioners on board.
However, this won’t necessarily translate across wider public sentiment and bring the boost in the polls that the Conservatives are hoping for.
Along with today’s Statement comes long-term forward looking economic forecasts showing lower than previously expected growth coupled with persistent inflation. UK voters will continue to notice the price of their shopping rising and affordability reducing. Ultimately, they will still be talking about the difficulties of making ends meet – whatever the Chancellor has announced today, and despite his jovial tone at the Common’s despatch box.
The Chancellor will soon find out if his plan is working and whether public opinion is on the up. Today’s announcements will likely form the basis of the focus group testing and polling which will significantly influence the policy platform behind the Conservative manifesto. If the pivot to the right on social issues is warmly welcomed, we should expect to see the Conservatives doubling down on this in the months to come.
For businesses and the self-employed, many of today’s measures will be well received. Capital expensing will provide much needed breathing room for those putting together business plans for FY 2024/2025. Equally, ending Clause II and IV of National Insurance will do the same for sole-enterprises looking to next year and beyond. Commentators tend to talk about the cost-of-living crisis though the lens of consumers, however, businesses have faced an especially tough 18 months. The last two quarterly reports from The Insolvency Service show the highest insolvency numbers since the second quarter of 2009, so there remains an uphill battle for the Government to turn the forecasts around and get business on side, with that clock ticking down to the election.
The Chancellor will be hoping that his supply-side reforms will have a quick impact. His task today was clear: calm the nerves of backbench Conservative MPs, and create the necessary economic breathing room in order to pull a larger ‘tax cutting rabbit’ out of the hat come the Budget in March, sending voters to the polls with a spring in their step.
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