Analysis: Even the 'autumn' bit seemed optimistic

George Osborne delivers his Commons statement

So, as widely predicted, there wasn't a lorry load of good news in the chancellor's Autumn Statement.

Although its title, featuring the word 'autumn', did at least feel to many like a blast of seasonal optimism, given snow was causing a headache for some relying on trains and planes.

In short, the age of austerity is going to last longer than the government hoped. Longer than anyone alive will have experienced.

Even the chancellor's transport to get to the Commons felt like a nod to the tough times. No flashy ministerial Jaguar. A more workmanlike Land Rover instead.

Once he was in the chamber, George Osborne wasted no time getting to the heart of what he wants the message from the statement to be.

"It is taking time, but the British economy is healing," he said, to loud jeers from Labour's benches.

So loud in fact, that less than a minute in the Speaker John Bercow was on his feet insisting the chancellor must be heard.

What followed was the usual blizzard of statistics.

But the chancellor did have to acknowledge that debt won't start falling as share of national income until 2016/17 - a year later than he hoped.

What is the Autumn Statement?

Autumn leaves
  • One of the two major statements the chancellor has to make to Parliament every year
  • Since 1997 the main Budget - which contains the bulk of tax, benefit and duty changes - has been in the spring before the start of the tax year in April
  • The second statement has tended to focus on updating forecasts for government finances
  • Over the past few years this distinction has become blurred, with the Autumn Statement becoming more of a mini Budget
  • Under the last Labour government it was called the pre-Budget report

As for the deficit, George Osborne told MPs that the Office for Budget Responsibility assesses the government is "on-course" to meet its target of eliminating it in five years time.

But there's a caveat: It is a rolling five year target, so yes the government hopes to hit it, but it's a year further down the line than it was.

Arguably the biggest economic spanner in the government's works has been far less growth in the economy than it hoped for.

Mr Osborne acknowledged that previous predictions were wrong. They were too optimistic.

So little wonder a big chunk of the chancellor's statement focused on what he hopes will be plans to get the economy going again.

Hence the cut in corporation tax cut to 21% from April 2014.

And, to big cheers from the government benches, the scrapping altogether of the 3p a litre rise in petrol duty scheduled for January.

The Treasury also hopes that by channelling more money into what's known as capital spending as opposed to current spending, this can create a more favourable economic environment.

Capital spending, in English, is things like road building: George Osborne said he would fund upgrades to the A1, A30, and M25.

In dealing with the deficit, there was a focus too on the benefits bill.

Here the government hopes it has found a cut it can make that is popular. So most working-age benefits - including Jobs Seekers' Allowance, Employment Support Allowance and Income Support - will be uprated by 1% for the next three years. In other words, below the rate of inflation and so a cut.

For the shadow chancellor Ed Balls the focus was immediately the targets George Osborne set himself, and has missed.

The Autumn Statement, he said, showed "the true scale of this government's economic failure".

"The one test they set themselves is now in tatters," he added.

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