In the middle of the political wreckage left by the referendum to leave the European Union the Autumn Statement was delivered by a new Chancellor for a new Prime Minister, but the message was clear – this is not a new government, it is a continuation of a failing government with failing economic policies.
The GDP growth is lower by 2.4 per cent over the forecast period, average earnings growth has been revised down with the average annual wage being £1,000 lower in 2020 than predicted at this year Budget.
The OBR has added its voice to those saying that “GDP growth will continue to slow into next year as uncertainty leads firms to delay investment and as consumers are squeezed by higher import prices”.
Negotiating new trading arrangements with the EU and others will “slow the pace of import and export growth for the next 10 years”.
The other week Theresa May, who became Prime Minister without a single vote being cast, spoke of those people who were only ‘just managing’ a term now reduced to the acronym JAMs by commentators.
Yet tinkering around the edges by reducing the taper rate at which Universal Credit is withdrawn and banning letting agents’ fees will not address the devastating fall in living standards many people have experienced – and will continue to experience because of this government.
This Autumn Statement is meant to make Britain ‘match fit for trade deals’ yet the Prime Minister still trots out the mantra that she is not going to give a running commentary on Brexit negotiations.
Our economy remains fundamentally weak – policies that ultimately drove us into the 2008 crash and then meant that we have never properly recovered remain the order of the day. Combined with Brexit we have a toxic cocktail. The priority must be to continue our access tariff free to the single market, and to protect jobs and workers’ rights.
The Guardian reckons that the cost of Brexit will be £58.7bn over the next five years because lower migration and weaker productivity will hit government revenues.
We do know that the government wants Article 50 to be triggered by the end of March 2017 which will start the clock running – we will have two years to negotiate our exit out of the European Union.
After that, the Treaties that govern membership no longer apply to Britain. Theresa May in a speech to the CBI hinted that ‘there could be a transitional deal to avoid a ‘cliff edge’ following negotiations. For proper scrutiny hints aren’t good enough.
Amid this uncertainty, the announcements around plans to invest in specific projects will benefit local areas but they fall far short of the substantial infrastructure investment that is needed to rebalance our economy. And we are still waiting for the Housing White Paper when our country has an acute housing crisis.
The Chancellor announced an increase in the so-called National Living Wage but it falls short of what Unite believes is needed for those on the lowest wages. The public sector pay cap continues – its existence has already led to workers losing an average of 17 per cent of take home pay.
His boast on an increase in employment ignores the nature of the increase of precarious working – short term, zero hours and the prevalence of those working in the gig economy. For many workers the lack of security means not knowing whether they can pay their bills from one week to the next.
Shadow Chancellor, John McDonnell responding to the Statement said that the government is facing the challenges of Brexit unprepared and ill equipped. He accused the government of pursuing a policy of austerity that has resulted in six wasted years and a so-called economic plan that has failed.
The one major announcement that the Chancellor could have made that would indeed have helped those ‘just about managing’ with a reversal of the £3bn welfare cuts was not forthcoming.
The Chancellor ended his statement by saying this was his first Autumn Statement and that it would also be his last but it was just a seasonal change not a resignation. Given the thinness of the Statement which tinkered around the edges those six wasted years are set to continue.