Budget for the tough times will be felt in the pocket by almost all

CHANCELLORS like to spring a few surprises, even in an Autumn Statement, generally the baby brother to a budget proper, which comes in the spring. But Jeremy Hunt had precious little room for manoeuvre yesterday, as he delivered his financial plans against a backdrop of raging inflation, soaring energy bills and global instability.

And having softened up the nation for a tough package of measures, he didn’t attempt to do much to sugar the pill. The biggest impact will be felt in pay packets, with a freeze on tax thresholds and a reduction in the figure you have to earn to pay the very top rate.

Failing to put up thresholds in line with inflation looks like a benign measure, barely registering in a speech heavy on numbers. Yet combined with the effect of inflation on every-day purchases and big hikes in mortgages and energy bills, it will have a significant impact on the disposable cash most people have left to spend once all the bases are covered.

But it was not all bad news. Compared to George Osborne’s genuine austerity budget of 2010, the impact on public services should – from what we heard yesterday – be less damaging. In part that is because those services people rely on – health and education – are already suffering significant pressures and to have hit them with more cuts would have been politically suicidal.

So there is investment in the NHS and social care – essential if we are to end the scourge of bed-blocking which is the real problem for the health service. And there is a boost for education, which is, as Mr Hunt pointed out yesterday, an investment in the future. Other public services will also see growth, but at a slower rate than the ministers running the departments delivering those services would prefer to see.

For business, there were carrots but, sensibly, not too many sticks, either. In the South West, the region’s Chamber of Commerce accepted that Mr Hunt was in a difficult position and gave him credit for keeping faith with some of the growth-building initiatives laid down by Boris Johnson, including the establishments of Freeports as part of the levelling up agenda.

Mr Hunt and his boss, Rishi Sunak – who clearly had a very big part to play in drafting this statement – will hope to be judged kindly by the electorate, or as kindly as possible at the start of a recession. They were clearly aiming to appear to be fair, with the heaviest burden falling on those best able to afford it. That seems to have happened. They will also want credit for investing in health and education – but that will only come if serious improvements in those two areas can be seen, in pretty short order. And they will want to know that the money markets have responded well, reversing the chaos that followed Liz Truss and Kwasi Kwarteng’s unfunded tax cuts, which sent the pound into freefall.

Beyond that, there is not much more the Government can do beyond hunker down and hope that these measures do, as Mr Hunt suggests, make the recession which is now officially upon us, shorter and shallower. On that, time will tell.