It wasn’t supposed to be like this. Back in 2010, George Osborne wanted his final Autumn Statement before the general election to be set against a backdrop of rising living standards, a deficit eliminated and the Tories’ reputation on the NHS detoxified.
On all three counts it is now clear he has failed. The question is whether next week, when the Chancellor delivers his set-piece economic statement to the House of Commons, he will brazen his way through this failure. Or will he follow the example of Home Secretary Theresa May, who this week admitted the Government has totally failed to meet its target to reduce net migration?
Knowing blustering George, he’ll do the former. But if the Chancellor was serious about the challenges we face, this is what he’d do next Wednesday.
First, we need a plan that can deliver a recovery for the many not just a few. While ministers are complacently claiming the economy is fixed, most people are still not feeling the recovery.
Latest figures show wages falling in the last year; working people are now more than £1,600 a year worse off than in 2010. This Tory plan simply isn’t working for them.
And for all the talk of rebalancing, under this Government house-building is at its lowest level since the 1920s, business investment is lagging behind our competitors and exports are way off target.
So we need an economic plan that can earn our way to rising living standards for all, not just a few. That’s why Ed Miliband and I have set out a plan to deliver stronger growth and more good jobs paying decent wages.
We want to build a stronger and more balanced economy: by getting 200,000 new homes built a year, reforming our banks and ending the dither on big decisions — like airport capacity — with an independent infrastructure commission.
We will back the next generation by boosting apprenticeships. We will make work pay and tackle insecurity by raising the minimum wage, tackling the abuse of zero-hours contracts and expanding free childcare for working parents.
And let’s back British businesses by cutting business rates for small firms and arguing for Britain to stay in a reformed European Union.
Stronger and more balanced growth means we can earn our way to higher living standards for all but also get the deficit down. And this leads to the second thing we need to see in the Autumn Statement: a plan to balance the nation’s books in a fair way.
The lesson of the past few years is that what happens to the economy is the biggest factor affecting public finances. Stagnant wages and too many low-paid jobs are, as the independent Office for Budget Responsibility (OBR) has said, leading to lower tax revenues and rising borrowing so far this year. This is why it is worrying that the OBR — and today the OECD too — is already forecasting growth to slow down next year.
I am sure the Chancellor will find a ruse to show that the deficit is going down this year but he will have to admit that he is borrowing billions and billions more than he planned and that his pledge to balance the books by next year will be broken.
A balanced and fair plan to get the deficit down must have more good jobs, rising living standards and stronger growth at its heart, but there will also need to be difficult decisions on spending and tax.
No fair plan to get the deficit down can include keeping a £3 billion a year tax cut for the top one per cent of earners, while asking working people to pay more by cutting their tax credits. But that is exactly what George Osborne is now proposing.
Labour’s plan will balance the books and get the national debt falling as soon as possible in the next Parliament. But we will do so in a fairer way by reversing that huge tax cut for millionaires.
We will make difficult decisions like scrapping winter fuel payments for the richest five per cent of pensioners, cutting ministers’ pay by five per cent and capping child benefit rises at one per cent for two years. And through our Zero-Based Review of every pound spent by government, we are showing how we will make different choices when money is tight.
For example, we have already set out £250 million of savings in the Home Office budget — including scrapping elected police and crime commissioners — better to protect frontline policing.
Unlike the Tories — who have made £7 billion of unfunded tax pledges — we have made no promises without saying where the money is coming from. I’m clear that our manifesto will have no commitments paid for by additional borrowing.
So the third task for the Autumn Statement is to deliver a costed and funded plan to save and transform our NHS. The truth is our health service is going backwards under David Cameron. Here in London and across the country, it’s getting harder to see a GP, waiting lists are going up again and A&E is in crisis.
So I’m calling on the Chancellor to use £1 billion of banking fines from the recent foreign exchange rigging scandal to give an immediate boost to our health service. We have also set out a plan to raise £2.5 billion a year — on top of Tory spending plans — for an extra 20,000 nurses and 8,000 GPs.
We’ll pay for this by tackling tax avoidance, introducing a levy on tobacco firms and a tax on properties worth over £2 million. Those measures are not popular with everyone but we are being clear about where the money is coming from for our health service.
A recovery for the many, balancing the books in a fairer way and a plan to save our NHS: this is what George Osborne has failed to deliver in the past four years. The Tories could make a start by admitting they have failed. But it will take a Labour government to make it happen.