Is that like the budget?
Sort of. Ever since 1975, when the Industry Act introduced a requirement for the government to publish economic forecasts twice a year—previously it had done so only at the annual budget—there has been a second major economic announcement by the chancellor in Britain's parliamentary calendar. Labour's Denis Healey was the first Chancellor to deliver one, in 1976, though he didn't call it an Autumn Statement. In the early days, when it did contain significant announcements beyond economic projections, it used to largely focus on government spending, with taxation left for the Budget, but in recent years that division has been less clear. Under Labour, from 1998-2010, the Autumn Statement was called the "pre-budget report," and became the major news event it is today, but George Osborne changed the name back in 2010. It may feel more like winter than Autumn, but like so many other things in parliament, that's just tradition. The statement used to be delivered a little earlier on average, and it comes at the end of, in effect, parliament's autumn term.
How important is it?
Some years, the Autumn State is a bit of a dud compared to the Budget, which is always hugely important. The earlier ones were largely just short updates on the country's economic progress or the government's plans. More recently, some of Osborne's announcements have more or less served to grab a few headlines and do little else. The 2014 statement was largely an exercise in stealing Ed Miliband's thunder with policies like stamp duty reform designed to offer Conservative versions of his more popular ideas. When Kenneth Clarke was Chancellor in the 90s, he moved the budget to the Autumn and delivered all his major tax and spend announcements then, with our "Autumn Statement" becoming a relatively unimportant "summer statement," a brief economic update. This year is a bit different, though....
What's different this year?
One key aspect of this year's statement is the expected cuts to departmental spending. Over the summer, the Chancellor demanded that departments produce two models for reduced budgets: one to cut their spending by 25 per cent over the next five years, and another to cut it by 40. Osborne has now agreed cuts with all departments but they are likely to be well below his ambitious upper target—before he announced final agreement with all departments, the Guardian reported that all cuts agreed up to 17th November would mean a cumulative cut in day-to-day government spending of 24 per cent on average by 2019-20. Climbdown or no, that is still a serious reduction for departments who already had to make significant savings in the last parliament, and following the statement, expect plenty of column inches dedicated to the fallout. Further education, local government, business and, controversially, the police are already facing cuts of around 30 per cent, The Independent reports.
What else can we expect?
Osborne is reportedly considering backing down from his target of delivering a £10bn budget surplus by 2020. If he does, this will give him leeway to lessen the impact of some proposed cuts. Watch in particular for any changes to the Tax credit reforms announced in last spring's budget. After Osborne proposed reductions in working tax credit for many people and limited the number of children parents could claim tax credits for to two, he faced opposition from people as diverse as Jeremy Corbyn, Iain Duncan Smith and The Sun's editorial staff. He could try to mitigate that. Small stealth tax rises could be brought in to help him reach his goals, too; the government can't raise income tax, VAT or national insurance thanks to a manifesto pledge. For example, he could target the zero-rated VAT on cycle helmets and other small reliefs. But this is largely speculation—unusually for Osborne, there's been a tight led kept on this year's effort and few major leaks.
