The Chancellor will deliver his Autumn Statement on Wednesday. Although the government insists that it is leading the country through a recovery, deep economic difficulties remain and will cloud George Osborne’s announcements this week.
The Treasury still hasn’t managed to bring the deficit under control, and over the next five years, whatever government we have will have to borrow up to £75bn. Borrowing is going to be higher this year than last year, and the deficit is only down a third since 2010.
So in these gloomier than planned circumstances, how will the Chancellor frame the Autumn Statement to attempt to win the support of an electorate that will be voting in the next government in under six months?
We knew infrastructure would be a big part of the Autumn Statement, and probably next year’s Budget, mainly because of the hints dropped by the Chief Secretary to the Treasury Danny Alexander over the past few months, and also Osborne’s vocal enthusiasm for infrastructure projects.
This has manifested itself in £15bn to be spent on new road funding in England, which includes:
- A tunnel under Stonehenge, to tackle a notorious bottleneck
- Improving M25 junctions
- 100 road improvement schemes
- Adding 1,300 new miles of extra lanes to motorways and A-roads
The problem politically with these plans is that they don’t exactly amount to a big, sexy infrastructure project, such as the “HS3” scheme that ministers have recently been discussing. Also, the amount of money the government is planning to spend on this was initially announced in 2013, meaning Labour can dismiss this as a “re-announcement”.
Whenever any politician comes up with a proposal for the health service now, it is highly politically significant because Labour is attempting to bring the subject to the top of the agenda, as it is the party most trusted with the NHS. Indeed, the Tories have reportedly been advised in the past by their election strategist Lynton Crosby that they should try to avoid talking about the NHS, so unlikely is it that the public will trust them with it following this parliament’s controversial Health and Social Care Act.
However, there is a funding crisis in the NHS that Osborne has to plan on fixing. But he will be approaching this in the Autumn Statement with very few fireworks. He will pledge to spend an extra £2bn a year on the NHS, to stave off the funding hole.
This has been welcomed by NHS England, but such a figure will only be able to keep the health service going as it is at present, rather than allowing for growth and new investment. It is also lower than the figure the Labour party has already announced it will spend annually on the NHS, £2.5bn. Also, Osborne is only gaining the extra cash from under-spending and further efficiency savings from other Whitehall departments. The Guardian has called this the equivalent of “rummaging down the back of the sofa”.