Cutting taxes, cutting taxes, cutting taxes, Jeremy Hunt positioned himself and his party as the party that “reduces debt, cuts taxes, rewards work”.
With his eye firmly on an election, this was all about – to quote the chancellor – the nurses, the police officers, the plumbers, the delivery drivers, the pensions, the self-employed, the workers.
He lifted the state pension by 8.5%, worth up to £900 more a year and rolled out a big tax cut in national insurance that would see “the average nurse save over £520 a year” and a “typical police officer” save over £630 a year.
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This a retail offer and a sign of things to come.
Sounds good doesn’t it?
But have a look back at the autumn statement of a year ago, when Mr Hunt was trying to clear up the mess of the Truss government’s disastrous mini-budget, and the sheen comes off.
Back then he raised £55bn through a mix of tax hikes and spending cuts as the chancellor took the country’s tax burden to its highest level since the Second World War.
On Wednesday, the chancellor was keen to tell us all that he now wants to give some back, to reward hard work and show us the economy has “turned a corner”.
But look at the independent forecasts and the reality is we are paying a lot more tax under the Conservatives.
Sure, the national insurance giveaway costs the government £9bn.
But when you compare it to the £45bn the government is going to raise over the same time period by freezing tax thresholds at a time of high inflation, and the tax-cutting mantra rings rather hollow.
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According to the Office for Budget Responsibility (OBR), four million more low-paid workers will be liable for income tax between 2022/23 to 2028/29, three million more will have moved to the higher rate of tax, 400,000 people will be into the additional tax band.
As for the overall tax burden, tax changes reduce the tax burden by 0.7% of GDP, but it is still rising every year to a post-war high of 37.7% of GDP by 2028-2029: a chancellor who talks about being the party of low taxes while simultaneously keeping the tax burden at record highs.
A government that wants voters to give them credit for cutting taxes even when they have been putting them up in the first place. Mr Hunt told me he had put up taxes last year to “protect business from going bust during the pandemic and to help families through the energy crisis”.
But when I asked him to spell out exactly how much he’d put up income tax and national insurance by freezing tax thresholds, well it was a question he really didn’t want to answer.
“We have put taxes up because it was the right thing to do to support families,” he told me.
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‘It will take time to get taxes down’
“If you’re trying to say it’s going to take time to bring taxes down to the level they were, I agree.”
But this government doesn’t have much time to try to get voters to give them another look.
The chancellor probably hopes people don’t notice the “stealth tax” of being dragged into higher tax bands, despite the decision to freeze thresholds between 2022 and 2028 dragging more than seven million people into paying higher tax, which is probably why he didn’t much like me asking about it when I sat down with him at the Treasury.
“You just can’t claim this is a tax-cutting autumn statement when the burden of tax keeps increasing and is at the highest level in 75 years,” said a senior Labour figure.
“What they have done today can’t possibly compensate for all the money they are taking in tax.
“It’s just taking people for fools. How do you know you’re better off, do you listen to Jeremy Hunt or look at your bank balance? It looks bad because everything – food, mortgages, energy bills – is going up.
“When the tax burden is going up and growth [for the next three years] is being downgraded, it’s just another reset moment for this government missed.”
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But what Mr Hunt hopes voters will notice is a fatter pension cheque, benefit payment and wage slip at the end of the month – which is where the retail offer comes in.
It’s all smoke and mirrors; we’re being taxed more, but the chancellor hopes you’ll feel better off.
Election politics are on.
