George Osborne will deliver his Autumn Statement today. Photo: Getty
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Good cop, bad cop, steady cop? What to expect from the Autumn Statement

The Chancellor will make his last Autumn Statement before the general election. What will it include?

In one of the last set-piece political events before the general election, George Osborne will deliver his Autumn Statement today.

Unsurprisingly with a general election around the bend, the Chancellor has approached this pre-budget in a significantly political way. So what can we expect?

First, we already know a great deal of what will be included in the Statement. These are all the positive spending promises and plans for the future. The headline policies include:


A number of these plans have been condemned by the opposition as “re-announcements”, because the money has been pledged before, and also of “recycling funds”, because most of this is money being moved around and scraped together from further efficiency savings in Whitehall rather than being new spending money.

Yet in spite of this, these policies are the preceding ‘good cop’ to what will undoubtedly be George Osborne’s slightly gloomier cop when he addresses the Commons this afternoon. He will have to address how the economic recovery has not played out exactly, nor nearly as quickly, as first planned.

In light of this, his strategy for delivering the Statement will be to communicate to voters to “stay the course” with the Conservatives, to take the country gradually back to prosperity, rather than handing the Treasury to Labour, which is still the party less trusted on the economy. He will say:

Our long-term economic plan is working. I say: we stay the course. We stay the course to prosperity.

Whether this ‘good cop, steady cop’ tactic will work depends a great deal on Labour’s response. The party has been hitting the Chancellor hard on the fact that he has failed to keep his promises on fixing the economy. The shadow chancellor Ed Balls commented:

David Cameron and George Osborne have now failed every test and broken every promise they made on the economy.

They promised living standards would rise, but while millionaires have got a huge tax cut working people are £1600 a year worse off under the Tories. This cost-of-living crisis is why the Chancellor will have to admit he has broken his promise to balance the books by next year.

Labour will have to hammer this message home during its response to the Chancellor today.

Anoosh Chakelian is deputy web editor at the New Statesman.

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A third runway at Heathrow will disproportionately benefit the super rich

The mean income of leisure passengers at Heathrow in 2014 was £61,000.

The story goes that expanding Heathrow is a clear-cut policy decision, essential for international trade, jobs and growth. The disruption for those that live around the airport can be mitigated, but ultimately must be suffered for the greater good.

But almost every part of this story is misleading or false. Far from guaranteeing post-Brexit prosperity, a new runway will primarily benefit wealthy frequent flyers taking multiple holidays every year, with local residents and taxpayers picking up the tab.

Expanding Heathrow is not about boosting international trade. The UK is only marginally reliant on air freight to trade with the rest of the world. Total air freight traffic in the UK is actually lower now than it was in 1995, and most UK trade is with Europe, of which only 0.1 per cent goes by air. Internationally, as much as 90 per cent of trade in goods goes by ship because transporting by plane is far too expensive. And in any case our most successful exports are in services, which don’t require transportation. So the idea that UK plc simply cannot trade without an expansion at Heathrow is a gross exaggeration.

Any talk of wider economic benefits is also highly dubious. The Department for Transport’s forecasts show that the great majority of growth in flights will come from leisure passengers. Our tourism deficit is already gaping, with more money pouring out of the country from holidaymakers than comes in from foreign tourists. What’s worse is that this deficit worsens regional disparities since money gets sucked out of all parts of the country but foreign tourists mostly pour money back into London. As for jobs, government estimates suggest that investing in rail would create more employment.

As for the public purse, the aviation sector is undeniably bad for our Treasury. Flights are currently exempt from VAT and fuel duty – a tax subsidy worth as much as £10bn. If these exemptions were removed each return flight would be about £100 more expensive. This is a wasteful and regressive situation that not only forfeits badly needed public funds but also stimulates the demand for flights even further. Heathrow expansion itself will directly lead to significant new public sector costs, including the cost of upgrading Heathrow’s connecting infrastructure, increased pressure on the NHS from pollution-related disease, and the time and money that will have to be ploughed into a decade of legal battles.

So you have to wonder: where is this greater public good that local residents are asked to make such a sacrifice for?

And we must not forget the other sacrifice we’re making: commitment to our fair share of global climate change mitigation. Building more runways creates more flights, just as building more roads has been found to increase traffic. With no clean alternatives to flying, the only way to meet our climate targets is to do less of it.

The real reason for expanding Heathrow is to cater for the huge expected increase in leisure flying, which will come from a small and relatively rich part of the population. At present it’s estimated that 70 per cent of flights are taken by 15 per cent of the population; and 57 per cent of us took no flights abroad at all in 2013. The mean income of leisure passengers at Heathrow in 2014 was £61,000, which is nearly three times the UK median income.

This is in stark contrast to the communities that live directly around airports that are constantly subjected to dirty air and noise pollution. In the case of London City Airport, Newham – already one of London’s most deprived boroughs – suffers air and noise pollution in return for few local jobs, while its benefits are felt almost entirely by wealthy business travellers.

Something needs to change. At the New Economics Foundation we’re arguing for a frequent flyer levy that would give each person one tax-free return flight every year. After that it would introduce a charge that gets bigger with each extra flight, cracking down on those that use their wealth to abuse the system by taking many flights every year. This is based on a simple principle: those who fly more should pay more.

A frequent flyer levy would open up the benefits of air travel, reducing costs for those struggling to afford one family holiday a year, while allowing us to meet our climate targets and eliminate the need for any new runways. It would also generate millions for the public purse in an efficient and progressive way.

We have to take back control over an airports system that is riding roughshod over communities and our environment, with little perceivable benefit except for a small group of frequent flyers.

Stephen Devlin is a senior economist at the New Economics Foundation.