Andrew Allison – A budget surplus with more spending? Don’t count on it
George Osborne has boxed himself in, with too many departments having their spending “ring fenced”. Cuts in spending are essential, but they have to be managed correctly, and because they are not being spread fairly across Whitehall, they are falling disproportionately on some departments. It appears that the Chancellor has learned his lesson on tax credits, by scrapping his proposed cuts. This is welcome news, as is the reversal in further cuts to police budgets. It is wrong, though, to keep the triple-lock on pensions (meaning a 2.9 per cent increase in the state pension next year when inflation is currently below zero), and to continue to spend 0.7 per cent of GDP on international aid, when savings here could help the Chancellor meet his targets in a fairer way.
With so many spending announcements (many of which will be welcomed), it is difficult to see how the sums add up. We have heard all the deficit reduction forecasts before, and George Osborne has singularly failed to meet them, so if you believe that there will be a £10.1 billion budget surplus by 2019/20, you may as well believe in the tooth fairy – especially as Government spending is set to rise to £821 billion in the same financial year.
Andrew Allison is Head of Campaigns for The Freedom Association.
Andrew Boff – The Chancellor should look to London
London is the engine of the British economy and the only city that is a net contributor to the Exchequer. That is why I welcome the Chancellor’s announcements on a London Help to Buy, a real-terms freeze in police spending, the devolution of back-to-work schemes, and investments in transport schemes such as Crossrail 2 and the London Overground. But this was far from a perfect Autumn Statement.
The Northern Powerhouse, while it is certainly vital in the long term, will not provide the immediate jobs and growth needed for Britain to compete at the global level. Our capital city is the only place that can. It is great that London now has Crossrail 1 and 2, but what about 3, 4 and 5? Further, we still are waiting for a decision on long-term airport expansion in the South East rather than the Heathrow sticking plaster, which is vital for all of the UK.
While the increase in funding for housing is welcome, I’m not sure it will not be enough for London. The Capital needs to build 40 Garden Cities by 2030 if it is to simply match demand. The Garden City development at Ebbsfleet is welcome but insufficient. The Chancellor would do well to recognise that investment in London is an investment for British jobs and growth.
Andrew Boff is a Conservative member of the London Assembly.
Peter Cuthbertson – The right priorities for policing and prisons
Police forces will welcome the announcement of more specialist firearms officers. They will delight in the announcement of no further policing cuts. But they have already helped prove that good policing is about more than money. Crime has fallen so much in the last five years even as police budgets were constrained.
I am also pleased to see more efficient spending on prisons. The government is clearly taking its lead from the Crime and Justice Unit at Policy Exchange, which two years ago suggested new super prisons to replace the small, older prisons which tend to cost far more per inmate.
The anti-prisons lobby love to imply prison is poor value for money, but this argument always withered under scrutiny. Total prisons spending is only a few billion pounds (just 0.5 per cent of government spending). Using this money to lock up the most serious 85,000 criminals prevents crime costing tens of billions – quite apart from preventing the creation of more victims of crime.
Soon the anti-prisons lobby won’t even be able to point to a high cost per inmate. Replacing the most expensive prisons will bring the average cost down. I hope that more low cost prison places will, in the long term, help to tackle the overuse of community sentences and suspended sentences for serious, repeat offenders who should be in prison.
Peter Cuthbertson is the Conservative candidate for Durham and Darlington Police and Crime Commissioner, and Director of the Centre for Crime Prevention.
Natalie Elphicke – Macmillan move over: we are the builders
We are the builders – with £20 billion of spending commitments to prove it. While other budgets were reduced, this Spending Review sees record support for housing in both money and new policies. The detail of the Blue Book refers to a “five point plan” for housing. More like a “fifty” point plan. Everything – from planning, accelerated land disposal, garden cities, estate regeneration. This is a Chancellor who is very, very serious about delivering on the housing agenda and shaping a balanced and successful home owning economy.
There were large housing carrots in an extensive settlement for home ownership and a huge funded programme for increasing housebuilding across the board.
Together with a hefty stick for the Buy-To-Let and Second Home markets, which will have some mortgage lenders and landlords re-calibrating their business strategies urgently. A Buy-To-Let reversal was widely anticipated. The second home market much less so. In housing terms, the two are very different.
Today’s announcements on home ownership create real potential to reverse the direction which is seeing our country move towards a nation of renters. The so-called “Nation Rent” was a direction set before the Great Recession and, if it is not reversed, renting could become the dominant tenure in the UK. That would be a backward step on opportunity, aspiration and stability.
Today the Help-To-Buy family (HTB deposit, HTB equity loan, HTB ISA) put extra rungs on the ladder of housing opportunity: a new HTB for shared ownership, a large London equity HTB and, in the Blue Book, a new rent-and-save product. There is recognition that affordable housing can take many forms. Housing choice is expanding outside traditional choices simply to rent or to buy. A more diverse approach to ownership is taking shape.
One nugget in the Blue Book is the effective reclassification of disused brownfield land within the green belt so it can be used for housebuilding, subject to local consultation. Home Counties, take note.
Natalie Elphicke is a non-executive director of a leading building society, as well as co-founder and Chairman of Million Homes, Million Lives.
Mark Field MP – Will the Autumn Statement’s assumptions come to pass?
At the General Election in May, Chancellor George Osborne needed to portray an economy both firmly on the road to recovery, but in a perilous enough condition to require another five years of his medicine. In securing a Conservative majority, he triumphantly pulled off this balancing act. However the relentless focus by the media on polls over policy meant that our economic position was endorsed without being fully scrutinised.
This has created two difficulties for the Chancellor going forward. Firstly, nobody is quite clear the extent of his mandate, which is why policy needs to be tentatively tested out until it meets fierce enough opposition to provoke a retreat. Secondly, we allowed the electorate to believe we were, perhaps, three-quarters of the way to recovery when the reality is that we are barely halfway. There are some pretty heroic assumptions within the OBR’s growth projections if we are truly to finish this parliament in surplus.
As a result, today’s Autumn Statement had rather a surreal feel to it. Our back was against the wall on tax credits, but with one bound the Chancellor is apparently free. The OBR has unilaterally changed its methodology, allowing for the sudden unearthing of an additional £27 billion to play with. Essentially every Budget and Autumn Statement is an exercise in cascading figures and the truth is that, for so long as a Chancellor enjoys the confidence of the capital markets, this does not matter. Retaining this confidence has been George Osborne’s single biggest achievement.
I am instinctively uneasy, however, that there may be some unravelling still to come. I wholeheartedly endorse bold moves towards the greater devolution of power. However, it is clear that many of the most difficult future decisions on spending will have to be made by local authorities rather than Whitehall.
Nonetheless, it was a bravura performance from the Chancellor. He presented ambitious projections on growth for 2018 and beyond – I sincerely hope they come to pass.
Mark Field is the MP for Cities of London and Westminster.
Dr Rachel Joyce – A Budget that got the balance right
A million more jobs are predicted and we need to ensure that we have a workforce willing and able to fill them. £billions more on capital investment, more Enterprise Zones, and changes to business rates will further stimulate growth across all regions. Changes to tax credit plans and future rollout of both the National Living Wage and universal credit should mean that work always pays. The huge increase in apprenticeships and focus on science and innovation will also ensure the workforce also has the necessary skills to fill these jobs.
The NHS needed the upfront investment promised yesterday. It is facing the consequences of its success with an ageing population, now living with the diseases that would in the past have killed us decades earlier. I’m glad to see the Chancellor spotted the inequity of free tuition fees for nursing degrees – 40 per cent of these students do not even go into nursing (something I highlighted here recently), and is instead spending that money on extending nurse training overall.
The new social care precept and increasing the Better Care Fund means that social care spending will increase. The journey towards integration of health and social care will allow better use of NHS resources which are so often used to backfill (at a higher cost) deficiencies in social care.
The Chancellor has managed to balance the needs of the economy with the need for efficient and high-quality services – and delivered social justice whilst he’s at it. Well done, George!
Dr Rachel Joyce is a former Parliamentary Candidate. She has been an NHS doctor for more than twenty years and has worked as both a Medical Director and a Director of Public Health.
Alan Mak MP – Security and Opportunity for all
The Chancellor reported Britain has the fastest-growing G7 economy, with our deficit and debt falling. We shouldn’t forget that on the doorstep, with local and mayoral elections looming. That economic growth generates revenue for our public services, like today’s welcome £6 billion cash injection for the NHS.
After the Paris attacks, we wanted to hear the Police budget would be protected and our counter-terrorism capability would be beefed up – and that’s what we got. Coupled with the new military hardware announced in Monday’s SDSR, like the orders for F35B jets, our commitment to our national security couldn’t be clearer this week.
For the young people and aspirational couples who trawl RightMove and Zoopla looking for a home they can afford, the Chancellor’s commitment to building 400,000 new affordable homes (to buy, not just rent) is great news. Osborne is renewing Thatcher’s dream of a “property owning democracy” for the digital age.
Key to building the socially-mobile Opportunity Society I’ve championed in Parliament is a good education for every child. As a former school governor, I especially welcome the new schools funding formula that irons out unfair regional variations.
A strong performance today from the Chancellor, giving the Conservative benches plenty to cheer about.
Alan Mak is the MP for Havant.
Harriet Maltby – Politics over prosperity
This Autumn Statement is a triumph of politics over Britain’s long term prosperity. Gone is the Chancellor’s commitment to tax simplification. He has ushered in a return to the Blair era of stealth taxation, cynical giveaways, and the belief that more money can solve any problem.
The NHS needs more than a cash injection. It needs a government with the courage to have the debate on the limits of a free universal healthcare system. The NHS can keep us healthy, but not at any cost. The Prosperity Index charts how it is even struggling to keep us as healthy as other developed nations. £6 billion is not a solution.
Neither is taxation to solve a self-made problem. The 2 per cent referendum cap on council tax rises has created a crisis in local government funding. The Chancellor’s “fix” is another, separate, 2 per cent “social care levy”. Another stealth tax. There is no true commitment to localism, just local taxation.
If the Chancellor is serious about securing the future of the UK – and his career – then the focus must be back on deficit elimination and true leadership in revolutionising our public services. Stealth taxes and giveaways are the failed policies of the past; he must lead and legislate for the future.
Harriet Maltby is a Government and Economics Researcher for the Legatum Institute.
Sean Worth – Marching into Labour’s territory
Spending Reviews are purely political events. We need a proper rake-through by analysts tonight for the clear picture, but £27 billion of extra money forecast by the OBR certainly came in handy for Osborne today.
What we got in terms of messages were loud and clear: Britain on the rise, growth spread more widely and Government strong and in control. And, by the way, we aren’t such a bad lot, after all – with “u-turns” on tax credit and police cuts, as well as some giveaways softening the hard rationalism of continued austerity.
It is a perfect theatrical backdrop to the real agenda.
First, Osborne is progressively moving the focus of what we hold central government to account for away from difficult, “unproductive” areas, notably welfare, to (politically attractive and cheaper) areas like housebuilding and infrastructure.
Secondly, he continues to march relentlessly into Labour ground to broaden the Tories’ core electoral appeal. More growth and spending in Labour heartlands and wooing younger voters with the hope of home ownership were key.
Ultimately, the politics of today overshadow tough issues in areas such as social care, and the pledged surplus is highly contingent on good growth trends, but Osborne marches steadily towards a potential leadership bid and Labour at least present him with absolutely no opposition at all.
Sean Worth is Director of Westminster Policy Institute.
Zehra Zaidi – Osborne reinforces his narrative
This was a Spending Review that showcased the duality of George Osborne’s role, both as Chancellor and as his party’s Strategist-in-Chief. The Chancellor said that “economic and national security” were at the heart of his Spending Review; two areas where, it just so happens, the gulf between the Government and the Opposition Bench has become ever wider.
On the so called welfare climb-downs, these are to be commended. First, dissenting voices with respect to the proposed tax credits cuts (not least within his own party) had become impossible to ignore. By scrapping the cuts altogether, he has shown the Government can and has listened. Second, pledging real-terms increases to police funding is both smart – in that doing otherwise would have been politically impossible after the Paris attacks – and shows that, despite the need to control spending, sound economic management (and rising tax receipts) means that there is room formanoeuvre. The narrative has in fact been reinforced (backed up by the fact that, whilst the government will breach its welfare cap in the first years of this Parliament, it will meet it in the later part).
The likes of the IPPR had called for a real commitment from the Spending Review to invest in the Northern Powerhouse. This has carried through: £12 billion more spent on infrastructure investment and protecting the science budget in real terms so it rises to £4.7 billion; 26 new enterprise zones to be created; uniform business rates to be abolished, with elected mayors allowed to raise rates under certain conditions.
The Opposition’s response to the statement? John McDonnell quoted Chairman Mao. Make of that what you will. For George Osborne, once again, narrative reinforced.
Zehra Zaidi is a charity campaigner and activist, and was the Conservative candidate for Makerfield.