My fantasy chancellor would announce a new path for fiscal policy

Autumn Statement wishlist.

Thinking ahead to the Autumn Statement, you can imagine a Balls/Cable alternative reality where the chancellor is a social democrat and Keynesian. Or you can consider what gentle nudging of the tiller the present incumbent might plausibly countenance.

The first option is a lot less gloomy.  With the economy and the public finances now totally at sea, my fantasy chancellor will announce a new path for fiscal policy. There would be a short-term stimulus, starting with a cut to employers’ national insurance and a massive public investment programme. Capital spending which guarantees a future revenue stream, such as house-building, would be ignored when it comes to plans for the national debt, meaning the government could promise a million new homes over five years.

There would still need to be very painful fiscal consolidation over the medium-term, but not on George Osborne’s terms. His plans assume that almost all the burden should be borne by spending cuts not tax rises, and his fiscal rules force him to squeeze the deficit faster and deeper than is likely to be needed for long-term sustainability. The result is a plan to permanently shrink the size of the state as a share of GDP.

A centre-left government would declare that its aim was to return public spending to its long-term trend not to ‘overshoot’. That would mean taking a bit longer to cut the deficit and raising more taxes, especially from wealth and land. There would still be very difficult and controversial decisions because even a decade of flat spending would mean many individual cuts. A Fabian Society commission has just launched to consider how the tricky trade-offs could be made.

But what of the real Mr Osborne? His reputation depends on him rejecting almost everything I have said. He knows however the Liberal Democrats will demand he finds more ways to tax high-earners, even if it is simply by adding a few bands to the council tax. He could also accelerate the capitalisation of his two putative public investment banks. On specific spending cuts, he should desist from a fresh assault on his ‘undeserving’ shirkers, for although the focus groups tell him it’s good politics, over time he reinforces the ‘nasty party’ image the Tories must shed to win centre-ground votes. Perhaps, on cuts, Osborne should simply pause and take stock; after all, does he really need to set a budget for April 2015 this week?

Andrew Harrop is the General Secretary of Fabian Society

The government could promise a million new homes over five years. Photograph: Getty Images

Andrew Harrop is general secretary of the Fabian Society.

Photo: Getty
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The New Statesman 2016 local and devolved elections liveblog

Results and analysis from elections across the United Kingdom. 

Welcome to the New Statesman's elections liveblog. Results will be coming in from the devolved legislatures in Scotland and Wales, local elections in England, and the mayoral contests in London, Salford, Bristol and Liverpool. Hit refresh for updates!

22:31: Oh god, the BBC's election night music is starting. Getting trauma flashbacks to the general election. 

22:22: A few of you have been in touch about our exit poll. Most of you have been wondering about that one vote for George Galloway but the rest are wondering what happens - under the rules of the London mayoral race (and indeed the contests in Salford, Bristol and Liverpool), 2 votes would not be enough for Sadiq. (He needs 2.5). However, all the other candidates are tied - which makes it through to the second round. What happens then is the second preferences are used as a tie-break. Of the tied candidates, Sian Berry has the most second preferences so she goes through to face Sadiq Khan in the final round. Final round is as follows:

Sadiq Khan: 3

Sian Berry: 2

3 votes is above the quota so he is duly elected. An early omen? 

22:19: Burnham latest. A spokesperson for Andy Burnham says:

"Approaches have been made to Andy Burnham to give consideration to this role. It is early days and no decision as been taken. Whatever the decision, he will continue to serve the leader of the party and stay in the shadow cabinet."

22:17: Anyway, exit poll of the office. We've got:

Sadiq Khan: 2

George Galloway: 1

Caroline Pidgeon: 1

Sian Berry: 1

22:15: Update on Andy Burnham. He has been asked to consider running. More as we get it. 

22:13: People are asking if there's an exit poll tonight. Afraid not (you can't really do an exit poll in elections without national swing). But there is a YouGov poll from Wales and I am conducting an exit poll of the four remaining members of staff in the NS building. 

22:11: It's true! Andy Burnham is considering running for Greater Manchester mayor. Right, that's it, I'm quitting the liveblog. Nothing I say tonight can top that. 

22:09: Rumours that professional Scouser Andy Burnham is considering a bid for Greater Manchester mayor according to Sky News. Not sure if this is a) a typo for Merseyside or b) a rumour or c) honestly I don't know. More as I find out. 

22:06: Conservatives are feeling good about Trafford, one of the few councils they run in the North West.

22:03: Polls have closed. Turnout looks to be low in London. What that means is anyone's guess to be honest. There isn't really a particular benefit to Labour if turnout is high although that is a well-worn myth. In the capital in particular, turnout isn't quite as simple a zero-sum game as all that. Labour are buoyant, but so are the Tories. In Scotland, well, the only questions are whether or not the SNP will win every single first past the post seat or just the overwhelming majority. Both Labour and Tory sources are downplaying their chances of prevailing in the battle for second place at Holyrood, so make of that what you will. And in Wales, Labour look certain to lose seats but remain in power in some kind of coalition deal. 

22:00: Good evening. I'm your host, Stephen Bush, and I'll be with you throughout the night as results come in from throughout the country. The TV screens are on, I've just eaten, and now it's time to get cracking. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.