Wednesday, November 25, 2015
The Autumn Statement & Spending Review - three quick thoughts
Posted by David Smith at 02:30 PM
Category: Thoughts and responses

There are always surprises in budgets, autumn statements and spending reviews and this one was no exception. There will be much more to uncover in the coming days but three initials things - all of them to a greater or lesser extent surprises - stand out.

1. The Office for Budget Responsibility, whose forecasts during the last parliament often made life more difficult for the chancellor - this time made it considerably easier. A 27bn underlying improvement in its forecasts for the public finances, overwhelmingly used for higher spending, eased the burden. Within that, however, getting in below the March forecast for this yera's deficit, predicted by the OBR, still looks on the face of it very tough.

2. That underlying improvement enabled Osborne not just to mitigate the effects of his tax credit cuts but to abandon them. This was a political coup, though presumably his earlier views on the unaffordability of the tax credit system still stand.

3. Osborne was able to be fast on his feet over police funding, another clever move. Following the Paris attacks, any cut in police funding would have been seen by critics as irresponsible. The police deal, apparently settled late, sees the budget protected in real terms.

There is much more to dig into. In the meantime, the Treasury document is here.