Autumn statement: messy realities of recovery

George Osborne is determined to seize any occasion that the parliamentary calendar provides to crow.

Plan A had no place for the occasion. Along with Gordon Brown’s glossy budget books with smiling children on the cover, the autumnal budgetary set-piece was an early victim of the coalition’s somberly suited government in the national interest. In place of spin, George Osborne offered blood, sweat and an old-style plain red book. In the autumn statement of 2010, the new chancellor simply stood up, read out Office for Budget Responsibility forecasts, and sat down again. The strategic course had already been plotted in the spending review, and there was no merit in fiddling with it – that would only be to divert from the plan.

But during three years of failure – with less growth and more borrowing at every pass – an itch to tinker with presentation and detail set in. And now that there is, at last, real evidence of a real recovery building, Mr Osborne is determined to seize any occasion that the parliamentary calendar provides to crow. The chancellor looked to be enjoying himself on Thursday, as he mixed justified claims (about buoyant employment, for example) with more dubious boasts about national income, which remains substantially smaller than anybody – himself included – had expected by this stage. What a thrill to be able to come to the Commons and paint a picture somewhat brighter than forecast, and not – as had become his habit – explaining why things have got worse.

With investment and exports depressed, there are still plenty of nits to pick at. For Labour, the most obvious is the fact that plan A has not come to fruition. Despite the recovery and the revisions, years of stagnation have taken their toll. Annual borrowing is still running at £111bn, compared with the £60bn that Mr Osborne had originally pencilled in for this year. But in a raucous Commons, Ed Balls came across as too wound up to hit home.

Accustomed to so much power so early in life, as Mr Brown’s right-hand man, the shadow chancellor has interpreted his title a little too literally, and provided a running commentary on what he would do at any given moment, instead of concentrating on where he needs to be on election day. His own plan B, featuring temporary VAT cuts, would have proved a helpful spur amid the stagnation of 2011-12; but it was never going to provide him with much to say after recovery came. With Labour’s thinking about the sort of recovery it wants still so sketchy, Mr Balls struggled to take the wind out of Mr Osborne’s sails as he might have hoped. Measured by the noise on the government backbenches, it was the chancellor’s day.

The substance of his statement, however, hardly suggests that Mr Osborne is yet writing the rules of the game. It revealed a nervous chancellor, grabbing, twisting and modifying ideas from his opponents. Weeks after agreeing to cap payday lending charges to see off a parliamentary defeat, he moved on to territory marked out by Ed Miliband’s conference speech – curbing business rates to benefit smaller companies, and answering Labour’s supposedly reckless energy bill freeze with an avowedly unrelated £50 discount of his own, which is put forward as an entirely responsible giveaway. It was all strangely reminiscent of how chancellor Brown was spooked by a younger Mr Osborne into cutting inheritance tax, and pretending, without convincing anybody, that this was what he had always wanted to do. There were other Brownian moments, too. A legislated spending cap on social security is designed to create trouble for a Labour party that Mr Osborne wishes to paint as the friend of the scrounger; it is the mirror image of Mr Brown’s child poverty bill, a wheeze that tried (and ultimately failed) to shame the Tories into backing family benefits. Both are, in their way, an abuse of parliament. A new fiscal compact, supposedly locking all parties into austerity through the next parliament, is further game-playing. Alistair Darling, too, once legislated for deficit reduction targets – a silly statute that the coalition repealed.

Such legislative tricks purport to be an answer to a fundamental lack of public trust in the stewardship of the economy. They are, however, doomed. First, because the Treasury still cannot be trusted with the figures. The big tax rises on Thursday all came through anti-avoidance measures, which – while welcome – can hardly be relied on. Mr Osborne’s deal on Swiss banks has raised nothing like what was intended. Meanwhile a potentially substantial expansion of university places was “funded” through sale of the student loan book, which is a bit like trying to get rich by selling cash. More fundamentally, faith in the economy’s governance will not be restored while the recovery is not being felt in most homes. The return of wage growth was pushed back by another year in the smallprint of Thursday’s figures. These reveal that the average worker is now in for 15 lost years. Recovery or not, Mr Osborne will not really regain his swagger until he can do something about that. © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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