IPPR has reacted to measures announced in today’s autumn statement by Jeremy Hunt, the chancellor of the exchequer.
On the overall statement Carys Roberts, IPPR executive director, said:
“The Autumn Statement made some welcome policy choices - such as finally raising local housing allowance and going ahead with planned uprating of benefits. But with the OBR now expecting inflation and interest rates to be higher, and growth lower, than in March, we needed to see bolder steps to help people with the cost of living and to turn the UK’s faltering economy around.
“Most concerningly, the chancellor claimed to be making long-term decisions, but his actions prove otherwise. The UK sorely needs investment - in schools, homes, hospitals, and in net-zero industries of the future. But the chancellor announced real-terms cuts to public investment, which will hold back economic prosperity, and he chose to cut taxes which will suck money out of public services. This is despite the public favouring higher rather than lower taxes and spending. Many of his most consequential plans are put off to the next parliament, when we could have a different chancellor altogether.
“For all the talk of a long-term strategy this was a short-term approach, with giveaways today but the costs borne by the country in the future.”
On business investment Dr George Dibb, head of the Centre for Economic Justice at IPPR, said:
“The chancellor is right to focus on the UK’s poor levels of investment but the jury is out on whether his policy mix will work. Switching from a time-limited regime of full expensing to a permanent policy is an improvement. The UK already has the lowest levels of business investment in the G7 but the OBR forecasts that, even with this change, business investment will be 1.2 per cent lower at the end of the forecast period than today.
“As the Prime Minister scrapped the last industrial strategy it’s welcome to see a commitment to UK manufacturing in the Autumn Statement. However, it’s concerning that none of that funding will start until 2025, when our competitors in the USA and EU are already steaming ahead with funding for the green industries of tomorrow.
“He’s effectively backdating the cheque to support the UK economy. The real barriers to growth are our failing public services and crumbling infrastructure. The government’s continued commitment to real terms cuts to public investment after 2025 heralds a new round of austerity which would set back our prospects for growth and prosperity.”
On the cost of living crisis and workforce measures Melanie Wilkes, IPPR associate director for work and the welfare state, said:
“The full impacts of the cost-of-living crisis are only just starting to bite for many households, through sudden mortgage or rent rises. Against that backdrop, today’s social security measures will bring welcome relief to many.
“But with housing support due to be frozen again next year, much more will be needed to drive a meaningful reduction in poverty over the long term. For many households, uprating universal credit from next April will not compensate for the loss of £900-a-year emergency cost-of-living payments; and even before the housing allowance freeze was introduced, more than half of private renters on universal credit faced shortfalls in their housing support.
“We welcome the expansion of specialist support for disabled people to go to work where there is no risk of a sanction. But at the same time, those who the government thinks can work from home will be compelled to do so, or face a sanction if they don’t. This will increase fear and distrust at a time when the DWP is trying to reach people facing the greatest barriers to work.”
On the link between health and the economy Chris Thomas, head of IPPR’s Commission on Health and Prosperity, said:
“It is a genuine landmark that, for the first time ever, both the Treasury and the OBR have recognised that the health of the country is central to economic outcomes – this should create real space for bolder health policy, but the Chancellor did not seize that with both hands.
“There are some good new measures – expanded mental health support, IPS and tailored work coaching could make some difference. But in other ways, the Chancellor’s is stuck on treating symptoms, rather than searching for the long-term cure.
“It is classic short-termism to believe the UK can solve its chronic health crisis through reactive welfare policies alone. There was far too little in the Chancellor’s statement to address the causes of our rising tide of sickness – mouldy homes, a broken food industry, rising rates of addiction and alcohol-related death, and crisis in both our NHS and adult social care services.”
On levelling up Zoë Billingham, IPPR North Director, said:
“This felt like the last chance saloon for the Chancellor to show serious commitment to our regions. Levelling up language might be back but the overall offer for our regions in today’s Autumn Statement was lacklustre.
“We welcome the newly announced devolution deals, simplified funding and more powers for selected counties. Extending investment zones to 10 years and to new areas shows promise. But in making real term cuts to public investment, the government risks undermining any progress on their flagship agenda.
“Overall, it seems like the government is on ‘go slow’ when time is running out to address regional divides and turbo charge our whole economy.”
On the climate Dr Maya Singer Hobbs, senior research fellow at IPPR, said:
“On the eve of COP28, this budget had nothing on net zero. Instead, it kicks the can down the road on climate, leaving a deferred problem for future generations.
“With the exception of some changes to the planning system to speed up grid connections, this budget had several glaring omissions – nothing remotely close to echoing the investment seen in the US and EU on green investment, nothing on providing active travel options, and nothing on energy efficiency.”
On energy efficiency Josh Emden, senior research fellow at IPPR, said:
“A week ahead of COP28, the Autumn Statement largely failed to deliver anything that looked like global leadership on net zero. Even with commitments to green manufacturing the UK is already being severely outcompeted by its neighbours.
“Tweaks to the planning system to accelerate EV charging infrastructure and heat pump deployment are welcome, as are reforms to speed up grid connections for renewable energy developers.
“But there is nothing new at all on funding for energy efficiency or clean heat despite having some of the worst housing stock in Europe - there is currently only enough public funding to install around 60,000 heat pumps over three years, compared to public support in France which last year alone saw over 600,000 heat pumps installed.”
On Scotland Philip Whyte, IPPR Scotland Director, said:
“While some good, if basic, decisions were taken – not least resisting the urge to use a lower inflation figure for benefits uprating, together with long overdue increases in local housing allowance – those still don’t compensate for more than a decade of punitive welfare reform and squeezes on household finances.
“The biggest story, however, was the one of a tax giveaway over much needed funding increases for public services. With real-terms cuts set to continue, all departments are going to face a continued squeeze and the risk of a return to austerity – with the Scottish Government not immune to that.
"All eyes now turn to the Scottish Budget – where the devolution settlement means the Scottish Government simply won’t have the same headroom or options available to it and tough choices will be required.
“At a time when major spending commitments are facing significant pressure, and we risk much needed progress against the two big challenges of child poverty and climate change, the Scottish Government must resist the urge to follow suit with a tax cutting budget. Instead, the focus must be on delivering investment where it’s needed most.”