We have reached the stage in a Parliament when most chancellors hope to assure the electorate that their policies are working, that the country is set fair, and announce that consequently they can relax the purse-strings a little.
That is to say, the moment when they would like to start bribing the voters in the run-up to the next General Election. I think we can say with a degree of confidence that, no matter the rhetoric, we won't be seeing much of it in this afternoon's Autumn Statement. Nor is it possible to see much chance of it in next year's Budget, either, though it is not only the last before the Referendum, but the last real chance to offer anything substantial before the next General Election, whether or not that will end up affecting Scottish voters.
All this is despite the fact that George Osborne actually has a credible case for the claim that his policies are working. At the last Budget, there was still the possibility that the country had entered a triple-dip recession; not only was that avoided but it turned out, when the Office for National Statistics finalised their figures, that the country had not even had a double-dip recession, having (just) avoided negative growth in 2012.
Now the Governor of the Bank of England has declared that the UK is growing more strongly than any other Western economy. The Office for Budget Responsibility has sharply increased growth forecasts for this year (to 1.4%) and next (2.3%). The IMF which, to Labour's delight, was arguing less than a year ago that continued austerity would be damaging and more of the Government's borrowing should go on public spending rather than paying down the deficit, has performed a complete volte-face and increased the UK's outlook figures dramatically. Ditto the OECD.
Employment is up by 1.1 million (even more remarkably, the number of part-time jobs is falling, and full-time positions increasing), almost all of it created in the private sector. Borrowing has been undershot this year. The deficit, Mr Osborne claims, is down by one-third.
Great news, then? Well, no. The best that one can claim for these improvements, unfortunately, is that they are better than what would have happened under Labour's proposals which, it is now clear, would have been an unmitigated catastrophe.
I hesitate even to describe this recovery as "satisfactory", following the Government's example, when it recently recategorised "satisfactory" as "requires improvement" for English school inspections. The fact remains that the debt-to-GDP ratio, which the Chancellor hoped would be falling by the time of the General Election, is still rising, and expected to keep doing so for several years.
At 75% of GDP, Government debt has doubled in six years, and is not expected to peak until it reaches 86% in 2017; the deficit reduction, meanwhile, is nowhere near Mr Osborne's initial targets. Even with the predicted, and welcome, underspend in borrowing, more than 11% of public spending (which is still going up) is done with borrowed money.
Since Mr Osborne's claim that paying down the deficit is the priority and these beginnings of recovery appear to have vindicated it, the one thing he cannot very easily do is start spending much on anything else.
The Coalition's - especially the Conservatives' - only real hope for winning over the electorate is to argue that the medicine, while unpleasant, has been having the desired effect. And, though I certainly wouldn't recommend a wager on it, it's not inconceivable that it might just keep David Cameron in Number 10.
That hope, even if it's a slim one, requires the Chancellor to stick to his guns. In his favour is the apparent public acceptance of the necessity of cuts; if he can convince the voters that the Coalition's stewardship of the economy has worked, and that Labour's proposals would have compounded the mess that they created, he may at least make them feel the alternative is worse. Nothing will make them actively like him or his party, but at least they dislike Ed Miliband even more.
Mr Osborne can't, in any event, bribe them to make them feel better, since not only would that make a nonsense of the one case he has available to present, but he doesn't have enough money to do it effectively.
There are, however, likely to be a few minor improvements to trumpet.
I expect we'll hear much about the personal allowance's rise to £10,000 from April, though it has been agreed since the election (and was, in any case, a Liberal Democrat policy). But there is just the possibility that the Chancellor will announce a further rise. Inequality and the rate of tax paid by the poorest has actually fallen since Labour's time in office, though middle-earners might like to note the stealthy way in which more people are falling into the 40% tax bracket, which helps to balance the books.
The freeze on fuel duty and the (fairly piffling) tax transfer for married couples, all announced at party conferences, will need to be funded. These are not huge giveaways, but there may be talk of further crackdowns on tax avoidance. That may be a popular way of avoiding showing where the money will come from, but efforts in that direction so far have brought in only around one-third of what was predicted, so there may be grounds for scepticism.
Caution is also advised when it comes to domestic energy costs, where Labour stole a march by promising a price freeze - a policy immediately popular but also, alas, shown to be ludicrous and ineffectual by the energy companies raising their prices. But the possibility that green levies will be removed will not bring the average bill down by much. Nor will the Government drop green taxes (though it is the number one priority for Tory voters); they will simply move to general taxation.
Any cuts to utility bills, or other possible measures - further cuts in NI contributions, or in tax on cash savings, or accelerated building on Government-owned land - will, the Chancellor has already made clear, come out of existing budgets.
The substantive cuts in public spending are still to come; we cut just £10bn this year, and will cut £27bn in 2015-16. There might have been more money now if Mr Osborne had not wasted so much on quantitative easing, or had cut harder and faster. But the real worry is the frailty of the recovery.
The fact that it is being driven by consumer spending and the recovery of the housing market ought to be a cause for concern, rather than optimism. The housing recovery is largely confined to the 30 miles around Trafalgar Square, and both it and increased consumer spending suggest that borrowed money, rather than genuine recovery in manufacturing or investment, is the primary driver.
It's almost as if we'd forgotten that it was an asset price bubble which landed us in trouble in the first place. If the Chancellor wants to convince us that his plans worked, and that that lesson has been learnt, he should deliver more cuts and pay down the deficit. It may not sound or feel good, or do him any good at the ballot box, but it's the only prescription possible.
Iain Macwhirter is away
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