Sorry, Mr Hunt, I can’t raise a glass (of relatively cheap) beer to your tax cuts

Jeremy Hunt’s autumn statement had plenty to cheer up Tory backbenchers. But for the rest of us, there was that sinking feeling that the bad times are far from over, writes Sean O’Grady

(PA)

Forget the cut to National Insurance, cheap beer, business investment tax breaks and changes to the planning system – which are all very welcome and headline-grabbing and just what the Tory backbenchers demanded from the last autumn statement before an election. They are a misleading signal about the underlying economic health of the nation and its living standards.

The chancellor had a notional “windfall” of £27bn – and too much of that was spent on tax cuts for households. Given the state of the national infrastructure and still-weak post-Brexit private capital spending, much more should have been devoted to investment. That is because that is the only way to get the economy to growth – an urgent task once again postponed.

The most significant thing to emerge from what the chancellor and the independent Office for Budget Responsibility had to say was about how the economy as a whole will fare in 2024. It’s going to be dismal, even worse than we thought. After the end of the pandemic, the country enjoyed a bounce-back. Revisions to the way gross domestic product is calculated also gave things a boost.