At 11.30am Jeremy Hunt is expected to arise in the House of Commons chamber and deliver the biggest package of tax rises and spending cuts for a decade.
It’s worth remembering how we got here. The market reaction to Kwasi Kwarteng’s mini-Budget in September led the then-chancellor to promise a “medium-term fiscal plan” with a full forecast from the Office for Budget Responsibility on 23 November. Then pressure from MPs and the markets forced him to bring it forward to Halloween. Then he was sacked. Then Liz Truss resigned. Then Rishi Sunak came in and delayed the announcement – thankfully renamed the Autumn Statement by this point – to today. And here we are. The deepest programme of tax cuts in 50 years has become a return to austerity in just two months.
What might Hunt announce? A freezing of tax thresholds for income tax, national insurance and others. A reduction in the threshold for the top 45p rate of tax. Increases in council tax. Real terms cuts to public spending and the lifting of the energy price cap to an average of £3,000 a year from April. Hunt may introduce many of his public spending cuts from 2025, in the hope that by then they won’t be necessary. In total, he is expected to announce £30bn of spending cuts and £24bn of tax rises over the next five years.
[See also: Escaping the austerity trap]
The response to his plans will be at the forefront of the Chancellor’s mind. Particularly from the markets, his own MPs, and lastly (and yes, probably least) voters. Over the next few days, watch out for Conservative MPs expressing their dissent at taxes going up. A couple of senior Tory MPs – Esther McVey and Iain Duncan Smith – have already spoken out. More may do so once the immediate chaos of the past two months passes, stability returns and infighting becomes more socially acceptable.
Today is the most important moment of Rishi Sunak’s premiership so far. It will set the parameters of politics from now until the next general election. Much of the statement has already been briefed to the media and Jeremy Hunt has promised that no rabbits will be taken out of any hats.
But let’s see. We will be covering the autumn statement developments here.