“This is a big spending review by a government that does big things, it’s a long term economic plan for our country’s future,” George Osborne said of his joint Spending Review and Autumn Statement as he delivered it in the Commons today. It wasn’t such a sweeping statement of ideological intent as this Summer’s “budget for working people” with its surprise National Living Wage announcement, but it succeeded in allaying some of the biggest concerns of Osborne’s critics on both sides of the house.
Tax Credit cuts announced in the summer will not take place—though it’s worth noting that cuts to Universal Credit will go ahead, so many poorer people will still be hit eventually. The axe also won’t come swinging for frontline policing, as some had speculated. With these concessions, and a hike in stamp duty for buy-to-let landlords, Osborne managed to head off many of Labour’s most obvious attack lines. Perhaps that’s why John McDonnell, the Shadow Chancellor, was forced into a bizarre exchange in which he quoted from Mao’s Little Red Book before tossing it across the House.
Osborne benefitted from some strong economic circumstances—he has been able to keep his welfare cuts at their full amount and stick to his deficit-reduction timetable even while making these climbdowns in part because tax receipts are set to be higher than expected, thanks to a remodelling by the Office for Budget Responsibility, the apprenticeship levy and stamp duty changes. But today’s announcements still signal a significant reduction in the size of the state and major cuts across the board—especially to departmental budgets, including losses of 37 per cent for the Department for Transport budget and 26 per cent for the Cabinet Office.