George Osborne's Autumn Statement: 10 things to look out for

Including, when will living standards start to rise, will there be new money for the NHS and how much more austerity is Osborne planning?

George Osborne will deliver his Autumn Statement at 11:15am today but, as so often with these events, it feels as if much of it has already been announced. The imposition of capital gains tax on foreign property owners, the freeze in business rates, the scheduled rise in the state pension age to 70 (in the 2060s) and the scrapping of employers' National Insurance for workers under 21 have all been pre-briefed to the media. 

One reason for this is that Osborne wants as much attention as possible to be focused on the OBR's improved forecasts for growth, employment and borrowing. Having responded to Labour's cost-of-living offensive by reducing green levies on energy customers, his other main aim is to shift the debate back towards the deficit and austerity, issues on which the Tories continue to out-poll Miliband's party. This being Osborne, he'll also have held at least one headline announcement back to triumphantly flourish at the end of the speech. And there's much more to look out for too

1. When will living standards start to rise? And by how much?

At present, while the economy is growing at its fastest rate for six years (and faster than any other G7 country), real wages, as Labour relentlessly points out, are still in decline, with earnings growth of just 0.8% in the most recent quarter compared to inflation of 2.2%. The Treasury's hope and expectation is that this will begin to change next year. How strong the OBR expects earnings growth to be will do much to determine the extent of any pre-election feelgood factor. 

2. More money for the NHS?

With ministers suffering sleepless nights at the prospect of a winter A&E crisis, one persistent rumour in Wesminster is that Osborne will announce additional money for the NHS. As well as helping to prevent the health service from collapse, this would offer the Chancellor a chance to reaffirm his party's commitment to the NHS and to (falsely) allege that Labour would be cutting it. 

3. How big is the output gap? (How much more austerity is needed?) 

One wonkish measure worth keeping an eye on is the output gap: the difference between actual and potential growth. The size of this will determine how much more austerity will be required to eliminate the structural deficit (the part of the deficit that exists regardless of the level of economic output) in the next parliament. 

4. Benefit cuts for under-25s

At every Budget and Autumn Statement he delivers, Osborne always finds a way to put welfare centre stage and today is likely to be no exception. One issue on which the Chancellor is expected to give more details is the coalition's plan to remove benefits from under-25s who are not "earning or learning". 

5. What's happening to income tax threshold?

Having already announced that the coalition's pledge to raise the personal allowance to £10,000 will be met by next April, there's room for Osborne to go further. Nick Clegg has urged him to raise it to at least £10,500, while David Cameron is said to be eyeing a £10,750 threshold. Osborne may well choose to keep his powder dry until the Budget but look out for a hint of further action today. 

6. When will a budget surplus be achieved?

The most significant announcement in Osborne's Conservative conference speech was his pledge to run a budget surplus by the end of the next parliament. With the OBR's updated forecasts, we'll find out when this might be achieved (today's FT suggests 2018-19). Expect Osborne to use this as his essential test of whether Labour is prepared to be fiscally responsible and as a signal of when greater tax cuts may become possible. 

7. Will Osborne halve the deficit by the election? 

Despite borrowing billions more than expected, Osborne is fond of reminding us that the deficit has still fallen by a third since the general election (from £159bn in 2009-10 to £115bn in 2012-13). If the numbers fall right today, he may well boast that he'll have halved it by the time of the general election (the Darling plan, in other words). 

8. Another cut in corporation tax?

Osborne has used almost every one of his Budgets and Autumn Statements to announce that he'll be cutting corporation tax by even more than expected (it is currently due to fall to 20% in 2015-16 from its 2010 level of 28%, giving the UK the joint-lowest rate in the G20). Today he'll publish new Treasury research showing that, in the next 20 years, the cuts are forecast to add around 0.7% to GDP (merely suggesting, as Richard Murphy puts it, that Osborne has finally discovered the multiplier), so it would be unsurprising if he chose to combine this with an annoucement that the rate will fall even further - to 19%. 

9. More public sector job losses?

As well as publishing new forecasts for growth, inflation and borrowing, the OBR will release its new estimate of how many public sector jobs will be lost over the course of the austerity programme. In the most recent Budget, this figure was put at 1.2 million but with Osborne planning further spending cuts to pay for tax cuts and benefit increases (free school meals), it could rise today. 

10. A cut in fuel duty?

The Chancellor has already vowed to freeze fuel duty for the remainder of this parliament but with the improvement in the public finances will he go further and deliver an outright cut? If Osborne is looking for a headline announcement designed to show that the government is not indifferent to the "cost-of-living crisis" this is the most likely candidate. 

George Osborne inspects material during a visit to AW Hainsworth and Sons on October 25, 2013 in Leeds. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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David Cameron’s starter homes: poor policy, but good politics

David Cameron's electoral coalition of buy-to-let retirees and dual-earner couples remains intact: for now.

The only working age demographic to do better under the Coalition was dual-earner couples – without children. They were the main beneficiaries of the threshold raise – which may “take the poorest out of tax” in theory but in practice hands a sizeable tax cut to peope earning above average. They will reap the fruits of the government’s Help to Buy ISAs. And, not having children, they were insulated from cuts to child tax credits, reductions in public services, and the rising cost of childcare. (Childcare costs now mean a couple on average income, working full-time, find that the extra earnings from both remaining in work are wiped out by the costs of care)

And they were a vital part of the Conservatives’ electoral coalition. Voters who lived in new housing estates on the edges of seats like Amber Valley and throughout the Midlands overwhelmingly backed the Conservatives.

That’s the political backdrop to David Cameron’s announcement later today to change planning to unlock new housing units – what the government dubs “Starter Homes”. The government will redefine “affordable housing”  to up to £250,000 outside of London and £450,000 and under within it, while reducing the ability of councils to insist on certain types of buildings. He’ll describe it as part of the drive to make the next ten years “the turnaround decade”: years in which people will feel more in control of their lives, more affluent, and more successful.

The end result: a proliferation of one and two bedroom flats and homes, available to the highly-paid: and to that vital component of Cameron’s coalition: the dual-earner, childless couple, particularly in the Midlands, where the housing market is not yet in a state of crisis. (And it's not bad for that other pillar of the Conservative majority: well-heeled pensioners using buy-to-let as a pension plan.)

The policy may well be junk-rated but the politics has a triple A rating: along with affluent retirees, if the Conservatives can keep those dual-earner couples in the Tory column, they will remain in office for the forseeable future.

Just one problem, really: what happens if they decide they want room for kids? Cameron’s “turnaround decade” might end up in entirely the wrong sort of turnaround for Conservative prospects.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.