Handling today’s Autumn Statement book brings to mind a Toblerone. The packaging looks similar to pre-referendum versions but its a lot less weighty. At 72 pages, the book comes in at half the length of recent ones.
But how easy is it to digest what's inside the Toblerone Statement?
Growth, the Chancellor and his forecasters admit, is going to take a hit from Brexit - but by far less than previously thought. The official forecasters, the OBR says its best guess is that the process of coming out of the EU will take 2.4% off our GDP - far less than the near 4% the Treasury had warned of pre-referendum. And by 2020, it reckons the economy will be growing by 2% per year again, close to the long-term average. All round, the impact may be less marked than feared - house prices, it assumes, will rise 5% per year, as opposed to the 10% plunge a pre-referendum Treasury claimed.
But that hit on growth has big repercussions for the public finances. Borrowing is set to be over £100bn more this parliament than previously thought, meaning the stock of government debt is set to top 90% of GDP for the first time in 50 years, and could break through £2trillion by 2022. Ouch.
No surprises then that Mr Hammond’s predecessor's fiscal rules have all been broken. It would be easy for the Chancellor to blame that on Brexit and abandon any pretence of austerity. Instead, he opted for a far looser set of fiscal rules - which keep budget-balancing on the horizon (but far enough away to be a problem for the next parliament) and so keep the markets from panicking. But the new rules are loose enough to allow for a cushion of public money if it all goes pear-shaped during our exit from the EU. It’s probably the best a man in his position, facing an unprecedented raft of constraints and uncertainties, could do.
Meanwhile, he’s boosting borrowing by a further £20n or so to ramp up spending on infrastructure and other productivity boosting policies. It’s very Keynesian - or indeed, smacks of Gordon Brown. Infrastructure may be the buzz-word but finding the right shovel-ready projects is always easier said than done.
And it was goodbye Autumn Statement, hello Autumn Budget (or maybe that should be Winter Statement, given they’ve tended to fall in late November or even early December). It’s a sensible move which means farewell to the mad rush in late March to get tax measures vetted and implemented in time for a new tax year.
Elsewhere, new measures were in short supply. A freeze in fuel duty is largely cancelled out by a rise in insurance premium tax (in terms of impact on household budgets and the Treasury’s coffers). Employees and employers will feel a slight pinch from cutting of salary sacrifice schemes, and an adjustment to NICs.
What about the JAM’s, the Just About Managing, the Treasury’s new focus? They’re likely to benefit from the fuel duty freeze, various welfare changes and an upgrade to the National Living Wage (albeit a smaller one than was expected). But the Treasury’s own analysis, as in the chart above, shows most of those on lower incomes will still be worse off by the end of the parliament - by as much as £250 per year - due to measures already announced. And that's before you consider how a rising cost of living will eat into their pockets. Not much in the Toblerone Statement to sweeten that blow.