The morning following the Government’s Autumn Statement on 22 November, Vuelio and the Trade Association Forum came together to hold a breakfast briefing for a crowd of communications and public affairs professionals.
The discussion was driven by a panel of experts eager to discuss the most pressing issues and their predictions following the announcement.
– Emily Wallace, CEO, Trade Association Forum
– Jeremy Gray, Head of Policy, Federation of Master Builders
– Craig Beaumont, Chief of External Affairs, Federation of Small Businesses
– Thomas Pope, Deputy Chief Economist, Institute for Government
– Jennifer Prescott, Political Services Team Lead, Vuelio
As British newspapers followed up on the statement, the most popular topics were tax cuts and public service spending, quality of education, inflation and fiscal drag, support for small businesses, and welfare among marginalised communities.
Springtime speculations for General Election
A prominent prediction – in both the media and public affairs sector – is that Jeremy Hunt’s tax-cutting motives are a ‘populist move’ ahead of a possible General Election next spring. When the crowd at Vuelio’s breakfast briefing were asked for a show of hands, a little over half predicted May, the rest said Autumn, while nobody thought January.
As reported by The Independent, Hunt insisted his tax cuts were orientated towards ‘long-term growth’ for the economy, and called it ‘silly’ to suggest this was a populist move tied to the timing of the next election.
In the two days following a piece from The Guardian quoting Hunt that the cuts were the ‘biggest in history’, 68 national newspapers and 103 regional news outlets shared the claim.
Threats to public services
As part of these cuts, an estimated £19bn cut in public service spending also raised concerns on the impact on NHS treatment and the relative labour force. Shortly after the Autumn Statement, The Independent quoted The Institute for Fiscal Studies in warning that Britain was on course for ‘drastic public-sector cuts’ that are ‘even more painful than the austerity of the 2010s’.
Hunt was quoted in 48% of tax-cut coverage in national British newspapers, stating ‘if you want to put more money into the NHS, you need a strong economy’.
Alongside healthcare, a member of Lambeth Council, who attended the briefing, raised concerns to the panel about the survival, quality, and maintenance of local governments. They also added that the issue could potentially be tackled by raising minimum wage for staff employed by councils.
Panelist Jeremy Gray, Head of Policy at The Federation of Master Builders, agreed with this statement and furthered that local authority funding has been restricted so heavily, cases of local authorities going bankrupt or not being able to provide basic services are on the rise.
Heather Stewart, The Guardian’s former political editor, voted it as one of the public sectors that will ‘suffer most’ to ‘pay for Tory tax-cuts’ – second to courts, prisons, and probation services.
The relative impact of fiscal drag – a concept whereby inflation of wages pushes people into higher tax brackets – is a rapidly growing concern. Economists have repeatedly argued across the press that the overall tax burden will remain at a record high, because of the continued freeze on tax thresholds.
A representative for a well-known homeless charity who attended the briefing, referenced the issue when arguing against Hunt’s decision to reduce national insurance by 2%. Their argument, that this reduction doesn’t hold up next to the ‘failure’ to address Brits under the poverty line, was widely supported by the panel, adding that Brits are not protected from falling deeper.
Vuelio’s Jennifer Prescott added to this conversation, stating that tax cuts were framed as a ‘positive spin’ in the statement, but the media has rapidly revealed studies suggesting why the opposite could be true. This is due to recent research, including IPPR’s release that only £3 of every £100 goes to worse-off families. Further, Sunak’s claims of ‘halving inflation’ have been widely criticised as ‘misleading’ and ‘boastful’.
Support for businesses
On a more positive note, business proposals were overall welcomed by the breakfast briefing crowd; particularly due to the focus on start-ups and smaller companies, i.e. business rates relief and full capital expensing.
Panellist Craig Beaumont added to this conversation that we should pay as much attention to the Liberal Democrats for this kind of support, pointing to their successes in South West England.
Unsupported education goals
Jennifer Prescott mentioned that Sunak’s 20 November speech, including his five key priorities for 2023, mentioned goals for a ‘world class education system’, yet any sort of plan for this was missing from the Autumn Statement.
Change in OBR attitudes
Panellist Thomas Pope, Deputy Chief Economist of Institute for Government, placed significant emphasis on how the Office for Budget Responsibility (OBR) has ‘downgraded’ its economic forecast, stating that it is ‘usually optimistic’. This observation was also covered by The Guardian, adding that inflation will likely exceed the 2% target until 2025.
Publishing updated forecasts from the OBR, the Chancellor said the Government was moving to ‘get the economy back on track’ after the pandemic and energy crisis. However, while the economy will avoid a recession this year – with a revision to forecasts for a drop of 0.2%, to growth of 0.6% – the OBR slashed its estimates for 2024 from growth of 1.8% to only 0.7%.
Alongside concerns for families under the poverty line, Hunt has been accused of ‘demonising’ disabled people in the press – a term used in 86 of the 483 national news headlines that emerged four days after the statement. This followed sweeping welfare changes that will ‘strip’ disability benefits for those who don’t appear to be actively looking for work. The regime will mean welfare recipients who do not get a job within 18 months will have to do mandatory work experience, while those who don’t look for work for a six-month period will have benefits stopped.
While the Chancellor said the goal is to save ‘wasted potential’ in the population, criticisms were high among the breakfast briefing crowd. Hunt also confirmed a rise in benefits and the state pension but said he would penalise those who took the taxpayer for granted with a crackdown on the long-term unemployed. The work capability assessment will be changed to assume that more of those with physical disabilities are able to work from home, while unemployed people who have been claiming universal credit for 18 months will lose work benefits unless they have a good reason.
Jennifer Prescott added that this was not reflective of a ‘compassionate conservatism’, a philosophy that the party has frequently identified with since election in 2010. Others added that the speech and statement lacked support for the working class and marginalised communities as a whole.
Polarising the conversation
Whether or not Hunt’s announcements are catered to an oncoming election, several members of the panel, including Emily Wallace, CEO at Trade Association Forum, expressed belief that there was an essence of ‘owning’ the past 13 years of power throughout Hunt’s speech and the Autumn Statement – for example, Hunt referencing the education system proposed under David Cameron’s power. Shadow Chancellor Rachel Reeves responded to this commentary by arguing that public services have been repeatedly neglected, and that it is now ‘too little too late’.
Reeves also received high volumes of national coverage for ‘attacking’ the Conservative party, particularly for ‘presiding over low growth and high taxes’. The Guardian quoted the Shadow Chancellor in her statement that working people are ‘worse off under the Conservatives’ with ‘growth down, mortgages up, prices up, taxes up, debt up’.
When asked about presumptions for the near future, Jennifer Prescott added that Labour are in a strong position to use the fact that the Conservatives have been in power for 13 years and therefore have a record to defend.
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