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25 November 2015

Autumn Statement 2015: Analysis

Government Affairs

Written by Jonathan Isaby, Chief Executive, TaxPayers’ Alliance

Today’s Statement from George Osborne represents a big missed opportunity to seriously reshape and redefine the role of the state. With a weak Opposition and time on their side at this early stage of the Parliament, the Government could have taken some radical and robust measures: abolishing unnecessary Whitehall departments, putting an end to ring-fencing certain budgets and abolishing the expensive and unjustifiable triple lock on pensions.

However, the Chancellor ducked the challenge with a series of announcements that will surely have been made with more than one eye on the politics of a future Conservative leadership race.

Of course, it’s good news that the OBR’s economic forecasts are more positive than expected, with higher than predicted tax receipts and low interest rates effectively giving him more room for manoeuvre.

And I welcome the fact that the Government remains committed to running a surplus by the end of the Parliament. But that room for manoeuvre appears to have been used up with the u-turn on tax credits and additional spending commitments in a number of other areas.

Meanwhile, fiddly interventions in the housing market and a new payroll tax mean that Whitehall’s tentacles continue to stretch far and wide.

Ministers are still spending £73.5 billion more than they have raised in revenue this year and as they continue to borrow in every year until 2019/20, the total national debt will continue to rise in cash terms – as will the debt interest payments to fund that borrowing.

So how can any observer seriously continue to talk about “austerity” and “savage cuts” when total public spending is continuing to rise year after year?

Jonathan Isaby is Chief Executive of the TaxPayers’ Alliance and was previously a columnist for the Daily Telegraph newspaper and Co-Editor of ConservativeHome.com

Image: Lenscap Photography / Shutterstock.com

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