London Playbook PM: In Hunt for tax cuts, spending suffers

Good afternoon from the committee corridor of the Palace of Westminster, where Chancellor Jeremy Hunt is addressing Conservative MPs after delivering his Autumn Statement.

WEDNESDAY CHEAT SHEET

— Chancellor Jeremy Hunt delivered around £21 billion in tax cuts, while government departments are set for £19 billion in cuts.

— The overall tax burden is still set to rise to record post-War levels.

— Hunt announced support schemes for businesses, benefit claimants, pensioners and renters.

— Labour said it was all a bit of an illusion, and the vibe in the House of Commons was tense.

— SCOOP: Deputy PM Oliver Dowden took Vladimir Putin to task to his face (but behind the protection of a computer screen.)

— Conservative frontbencher Lee Anderson said illegal immigrants could be sent to a Scottish island.

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TOP OF THE NEWSLIST

TORIES PLEASED, WHITEHALL WON’T BE: In the past few minutes, Jeremy Hunt strode into a Commons committee room to wild desk banging from Conservative backbenchers after delivering tax cuts in his Autumn Statement. But all may not be as it seems.

Indeed: Hunt announced a cut to national insurance from 12 percent to 10 percent from the start of 2024, as well as a smaller cut to national insurance for self-employed workers. But the small print shows the tweaks will take just 0.7 percent off the overall tax burden, which will still rise to a post-War record of 37.7 percent of GDP by 2028/29 — due in most part to frozen income tax thresholds.

And there’s more: The tax cuts appear to have been planned in part via a huge £19.1 erosion in real terms in departmental spending due to inflation, with the government refusing to spell out where the ax will fall until the next spending review, which could come after the election.

Still more: Inflation is expected to stay higher for longer compared with forecasts in the spring … growth is a bit of a mixed bag but has been downgraded in the medium term from 1.8 percent to 1.6 percent (despite Hunt announcing 110 measures aimed at boosting growth) … and both debt and debt interest spending remain high.

Nevertheless: The announcement, despite a muted performance from Hunt in the Commons chamber, was packed with news lines. Aside from the national insurance rabbit and cuts for the self-employed worth £350 per year (Labour MPs mocked that one for its small impact, with frontbencher Alison McGovern offering a sarcastic “Wow!” from the opposition benches) there were numerous other nuggets.

The crucial bits in full: Hunt made full expensing for firms (a tax rebate on big capital spending) permanent … hiked benefits via the September inflation rate of 8.7 percent (not the lower October rate as had been mooted) … hiked pensions by 8.5 percent (not the public sector wages figure minus bonuses as some expected) … and increased local housing allowances to 30 percent of market rents (a big help for renters.)

A few smaller bits: Hunt also froze alcohol duties until August … boosted various R&D funding schemes … made a few planning tweaks such as allowing people to convert one flat into two without red tape … hiked tax on rolling tobacco … announced the future sale of NatWest bank … and said people who don’t find work after 18 months of support and forced work experience will lose benefits.

And don’t forget … the bits and bobs announced in advance, such as the hike to the “national living wage” and the rest of the carrot and stick back-to-work plan. All the budget documents are here.

THE HEADLINES HE WANTED: “We are delivering the biggest business tax cut in modern British history,” Hunt told the Commons. “The largest ever cut to employee and self-employed national insurance and the biggest package of tax cuts to be implemented since the 1980s.” He said it was an Autumn Statement “for a country that has turned a corner” and for growth. Here’s our overall writeup.

But but but: The damned Office for Budget Responsibility, which is the independent government economic watchdog, released its own take on the statement at the same time which pointed out tax will still rise in each year of the next half decade, while frozen allowances mean almost 4 million more people paying tax by 2028/29. Check out this graph as an illustration of the spin going on here.

The government line: The tax burden is high because of support spending during the pandemic and the fuel crisis caused by the Ukraine war that required more cash to help those in need. But officials insist Hunt is making a dent with the announcements this afternoon, and insist growth is still better than sluggish forecasts depending on how the numbers are cut — although there appears to be no definitive list of the supposed 110 growth-boosting measures.

What Labour said: “I think we can forgive taxpayers for not celebrating when they see the truth behind today’s announcements,” Shadow Chancellor Rachel Reeves told the Commons. “The fact is that taxes will be higher at the next election than they were at the last.” She’s on LBC at 7 p.m. tonight, and both Reeves and Hunt are appearing on Peston.

Ice cold: The vibe between Reeves and Hunt during the session was not good. Towards the start of his speech, Hunt made a gag about how she could have copied and pasted his conference address (after the furor over plagiarized bits of her book) to which she responded with a fixed smile and a look of daggers. Keir Starmer sat stone faced while Reeves mouthed the odd riposte to the chancellor’s digs.

More daggers: Hunt later made a gag about his failed attempt to become PM and Starmer advocating a Labour win with Jeremy Corbyn as its leader. He said the pair of them wanted to make “a Jeremy” prime minister. Even Starmer laughed at that one, but Reeves just kept that death stare going.

Not Liz-ting the mood: “Whereas this Jeremy is growing the economy, his Jeremy would have crashed it,” Hunt added as a double punchline. Labour MPs erupted with shouts about market spooking Liz Truss — while her close pal Ranil Jayawardena chuckled along in the VIP galleries up top. Reeves still wasn’t impressed with the gag, however. Clip here.

Speaking of Truss: She wasn’t in the Commons for the statement (she must have a good PR adviser to keep her clear of the finger-pointing) but was enthusiastic on Twitter about making full expensing permanent. One of her Growth Commission panel made the point about the Hunt tax cuts being small beer compared to the overall rises.

And then … there’s the small issue of how those tax cuts will be funded. The OBR notes that departments not protected from cuts will see spending fall in real terms by 2.3 percent in 2025/26, and 4.1 percent if ministers keep their promises to hike defense spending to 2.3 percent of GDP and return aid back to 0.7 percent of GDP. “Delivering a 2.3 percent a year real terms fall in day to day spending would present challenges,” the OBR stated in its report.

It gets a bit starker than that: Speaking at a press conference this afternoon, OBR boss Richard Hughes said the £19.1 billion cut in public spending is “roughly equal to the amount the chancellor spent on the two big tax cuts in this fiscal event.”

The Downing Street line: “Over this parliament departmental spending has increased by an average of 3.2 percent a year in real terms, which is the second biggest rise during a parliament this century,” a No. 10 official said. But inflation has, of course, been far higher.

What it all means: The common assumption at Westminster is that this is a pre-election Autumn Statement aimed at cutting taxes in the hope of a Conservative poll boost, while leaving the difficult decisions about required spending cuts to the next administration. Isn’t politics fun!

And lo: Some 67 percent of voters support the national insurance cut plan and 58 percent support the overall Autumn Statement package, Savanta polling released in the past few minutes shows. But half reckon the government plan for the economy isn’t working.

WHILE WE WERE WAITING: Britain got a little PMQs hors d’oeuvre before the Autumn Statement, with Keir Starmer tackling Rishi Sunak over NHS waiting lists.

Standard stuff: There were the usual stats thrown back and forth, plus accusations about the NHS in Wales and support for striking health workers. Shadow Health Secretary Wes Streeting raised an upturned palm to the ceiling, as Sunak said he was working on the waiting lists, as indication of the direction the overall numbers are heading in. He then sat back and folded his arms, unimpressed.

Alice in Parliland: Starmer said the PM was “through the looking glass” if he thinks waiting lists are improving (the longest waits are reducing but the overall list is rising.) Sunak said it was “galling” to hear the leader of the opposition complain after failing to condemn strikes from health workers.

The one point of PMQs interest came … when Labour MP Daniel Zeichner stood to condemn Twitter owner Elon Musk about his antisemitism storm on the microblogging platform. He said Musk had sent Twitter into a “death-spiral” and attacked the PM for bro-ing out with him during the tech summit. It was a furious performance. Sunak said it was weird to see an MP for Cambridge not taking much interest in AI.

AND THEN … PMQs was over and the chancellor rose to his feet to deliver the Autumn Statement. He started by noting it was his wife’s birthday and said she looks younger every day. Lucia Hunt was up in the VIP galleries listening with their three children, and seemed flattered if not a little embarrassed about the namecheck. The kids became increasingly bored and restless as the statement wore on.

The problem was: Hacks in their offices the length of the media corridor in parliament were struggling to tweet the wife gag, after all the power in the area blew a few minutes before Hunt stood up. Commons technicians got it back up and running a little less than an hour later, not long before Hunt finished.

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DRIVETIME DEBRIEF

I WAS RIGHT LATEST: Labour Leader Keir Starmer said the time limited (at the moment) cease-fire between Israel and Hamas was what he’d been calling for all along. After the agreement for Hamas to release 50 hostages in return for a pause in fighting and the release of some Palestinian prisoners, Starmer told PMQs “a substantial humanitarian pause is what Labour has been calling for alongside our international partners.”

There’s more: He added that the pause should “start a process” to move the dispute forward. “In recent years, the international community has treated the two state solution as a slogan rather than a serious strategy,” he said. “That must now change.”

GOOD JOB IT WAS ONLINE: Deputy PM Oliver Dowden gave both barrels to Russian President Vladimir Putin on a G20 call this afternoon, Playbook PM can reveal. He said the Russian invasion in Ukraine was “an assault on everything this multilateral system stands for. It harms not just the people of Ukraine, but millions across the globe.” He condemned the Russians for ignoring G20 commitments on food security and international trade, adding: “This cannot be allowed to continue — the G20 must hold Russia to account for making a mockery of multilateralism.”

Bear in mind: Putin was on the call listening in, but had spoken earlier during the meeting so didn’t get a chance to respond.

OFF THE LEE-SH: Conservative Deputy Chair Lee Anderson suggested small boat arrivals should be sent to the Orkney Islands as a back-up to Rwanda. A Scottish Conservative who spoke to the Times’ Bree Allegretti wasn’t too impressed.

CALL ME FOR QUESTIONING, DAVE: The Commons procedure committee has opened a probe into (in basic terms) how David Cameron can be held to account in the Commons. The peer and foreign secretary sits in the Lords, so isn’t subject to the usual Commons question sessions.

STILL WHITTERING ON: Chief Medical Officer Chris Whitty said he was wrong to talk about the public getting tired of lockdowns at the start of the pandemic, when the government was hesitant to impose restrictions out of fear patience would run thin and a bigger wave of the COVID-19 virus follow. “This is one where my communications were really poor, frankly,” he told the official COVID probe this morning. “This is probably my most prominent, at least in my view, communications error.”

Also worth noting: Both Whitty and his former deputy Jonathan Van Tam — who gave evidence this afternoon — said they weren’t consulted on Sunak’s Eat Out To Help Out scheme. JVT said if he had been asked, he’d have dumped on it as “encouraging what we’ve been trying to suppress.” Sunak says in his witness statement that no objections were raised to the scheme … and insisted at PMQs he’d answer questions when he gives oral evidence in the next two weeks.

NOT SO FAST: Media Secretary Lucy Frazer said she was “minded to” intervene in the proposed sale of the Telegraph newspaper and Spectator magazine using UAE funds. In a written statement to parliament she said she could get involved under the terms of the Enterprise Act.

SOCIAL AFFAIRS

NOT BAD, COULD BE BETTER: Chancellor Jeremy Hunt is going to have to up his game if he wants to match the social media prowess of his boss. The clip he shared as an autumn statement teaser wasn’t bad but could have had some of the audio and visual editing (plus the overall sound) tightened up to make it more profesh.

BAD BOOKING: Accepting interviews on College Green during big political events (or whenever anti-Brexit loudmouth Steve Bray is on the scene) is never a good idea, as Harriett Baldwin found out.

THIS SHOULD HELP: Someone messaged GB News Pol Ed Chris Hope suggesting the Tories were polling better when they were promising a new Royal Yacht. Was it Boris Johnson perchance?

WISH YOU WERE HERE: Meanwhile, ex-MP Ross Thomson who quit in a groping allegations scandal is sunning himself in the Maldives …

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AROUND THE WORLD

ISRAEL-GAZA LATEST: Hamas will begin a four day pause in hostilities at 8 a.m. U.K. time Thursday, the group said, following the Qatar-brokered hostage deal — the BBC has a live blog. Israel has not yet said when its pause will start. The Israeli justice ministry released a list of 300 Palestinian prisoners set to be released if the exchange goes to plan — via the Times.

IN RUSSIA: Russian President Vladimir Putin told the G20 it was necessary to think about how to stop “the tragedy” of the war in Ukraine, adding Moscow had never refused peace talks with Kyiv — Reuters has the details.

IN SOUTH KOREA: South Korea suspended parts of its 2018 military agreement with North Korea by stepping up surveillance along its border after Pyongyang claimed to have successfully placed its first spy satellite in orbit — via Sky News.

IN THE NETHERLANDS: Voting in the Netherlands’ snap general election continues as more than 13 million people choose between 26 parties. Polls close at 8 p.m. U.K. time — the BBC has more information.

IN AMERICA: U.S. authorities thwarted a conspiracy to assassinate Sikh separatist Gurpatwant Singh Pannun on American soil and issued a warning to India’s government over concerns it was involved in the plot — the FT has the story.

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TONIGHT’S MEDIA ROUND

LEADING THE NEWS BULLETINS: BBC News at Six and Channel 4 News (7 p.m.) both lead on the reaction to Chancellor Jeremy Hunt’s Autumn Statement.

Tom Swarbrick at Drive (LBC, until 6 p.m.): Shadow Chief Secretary to the Treasury Darren Jones (5.05 p.m.) … Financial Secretary to the Treasury Nigel Huddleston (5.40 p.m.).

BBC PM (Radio 4, 5 p.m.): Nigel Huddleston … Shadow Work and Pensions Secretary Liz Kendall … former Chancellor Ken Clarke … Resolution Foundation Chief Executive Torsten Bell … CBI Chief Executive Rain Newton-Smith … former U.S. National Security Adviser John Bolton.

News Hour (Sky News, 5 p.m.): Liz Kendall (5.50 p.m.).

Drive with John Pienaar (Times Radio, 5 p.m.): Former Chancellor Kwasi Kwarteng (5.15 p.m.) … Money saving expert Martin Lewis (5.25 p.m.) … Liz Kendall (5.35 p.m.) … Tory Party Chairman Richard Holden (5.45 p.m.) … Nigel Huddleston (6.15 p.m.) … British Chambers of Commerce Director General Shevaun Haviland (6.30 p.m.) … Lib Dem Treasury spokesperson Sarah Olney and SNP Treasury spokesperson at Westminster Drew Hendry (both 6.50 p.m.).

Tonight With Andrew Marr (LBC, 6 p.m.): Chief Secretary to the Treasury Laura Trott … Liz Kendall.

Iain Dale (LBC, 7 p.m.): Shadow Chancellor Rachel Reeves phone-in.

Farage (GB News, 7 p.m.): Tory MP Paul Scully … Shadow Business Secretary Jonathan Reynolds … Reform UK Leader Richard Tice.

Politics Hub with Sophy Ridge (Sky News, 7 p.m.): Laura Trott … Jonathan Reynolds … former Shadow Chancellor John McDonnell.

Cross Question with Iain Dale (LBC, 8 p.m.): Tory MP Duncan Baker … Lib Dem MP Helen Morgan … economist Linda Yueh … Iman and broadcaster Ajmal Masroor.

Peston (9 p.m. on Twitter, 10.45 p.m. on ITV): Chancellor Jeremy Hunt … Rachel Reeves … Tory MP Simon Clarke … Labour PPC Miatta Fahnbulleh.

Newsnight (BBC 2, 10.30 p.m.): Economic Secretary to the Treasury Bim Afolami … Jonathan Reynolds.

TWEETING TOMORROW’S PAPERS TONIGHT: Neil Henderson.

REVIEWING THE PAPERS TONIGHT: Times Radio (10.30 p.m.): TalkTV’s Peter Cardwell and former Tory MP Justine Greening … Sky News (10.30 p.m. and 11.30 p.m.): The Mirror’s Kevin Maguire and the Mail’s Amanda Platell.

WHERE TO FIND BOOZE IN WESTMINSTER TONIGHT

TIPPLE WITH TEACHERS: Former Education Secretary Michael Gove attends a Teach First reception in the Churchill Room from 6 p.m.

POST-MATCH ANALYSIS: Labour’s Steve Reed and POLITICO’s own Eleni Courea are speaking on a panel about the Autumn Statement in parliament from 7 p.m.

AND OF COURSE: Take a swig of real ale and a drag on a ciggie each time Nigel Farage is asked about Brexit or flashes his crack on ITV from 9 p.m.

TOMORROW’S WORLD

WHAT THE CHANCELLOR IS UP TO: Jeremy Hunt will be on the morning broadcast round, then visit the new allocated site for an investment zone in Wales.

MATES ACROSS THE WATER: The 40th summit of the British-Irish Council takes place in Dublin Castle.

WHAT THE GOVERNMENT WANTS TO TALK ABOUT: Ministers will announce cash allocations for rough sleeping schemes.

SEOUL MATES: South Korean President Yoon Suk Yeol visits the Churchill War Rooms before bidding farewell and heading home.

BILL SOMEBODY: Fuel watchdog Ofgem releases its next average price cap for bills through the first three months of 2024, at 7 a.m.

VITAL STATISTICS: The Resolution Foundation presents its Autumn Statement review from 9 a.m. and the Institute for Fiscal Studies does its own from 10.30 a.m.

NUMBERS GAME: The latest immigration stats up to June 2023 are due out at 9.30 a.m.

IN THE COMMONS: Cabinet Office questions kick things off at 9.30 a.m. before the business statement and further debate on the Autumn Statement.

COP A LOAD OF THIS: Climate adviser Chris Skidmore appears at a Dods event about COP26 from 10 a.m.

PANDEMIC DIARIES: Former senior medical official Jenny Harries appears at the official COVID probe from 10 a.m. before Equalities Minister Kemi Badenoch is up in the afternoon.

ANY OTHER BUSINESS

PACKED LUNCH OR PARL LUNCH: Subject to change, here are the lunch menus on the estate tomorrow: Bellamy’s: Jerk chicken with rice and peas; grilled garlic mushroom on carrot and celeriac rosti with avocado salsa and toasted walnuts; seared salmon fillet with roasted butternut squash, sun dried tomato, garden peas, baby spinach and gnocchi … The Debate: Jerk chicken with rice and peas; grilled salt cod fillet with chickpeas, egg, olives, red onions, peppers and a parsley dressing; spinach, onion and potato pakora with naan bread, mango chutney and black poppy seeds … Terrace Cafeteria: Beef lasagna; jerk chicken with rice and peas; lemon and thyme halloumi with toasted ciabatta … River Restaurant: Sweet potato, spinach and eggplant dhansak with tomato salad; Korean pulled pork bao bun with sweet potato fries and Asian coleslaw; grilled salmon with new potato and celeriac salad.

NOW HIRING: The Cabinet Office is looking for a senior media officer for up to £48,243. Here’s the ad.

WHAT I’VE BEEN READING: For something different from the Autumn Statement, constitutional law academic Adam Tucker has written a damning assessment of the government’s hopes of getting the Rwanda deportation deal off the ground. He presents a detailed assessment of the issues on the ground in Rwanda and argues new legislation declaring the nation safe for refugees would be “enacting a falsehood into law. It would be a legal fiction.”

ON THIS DAY IN POLITICS: On November 22 1830 Charles Grey (who Earl Grey tea is named after) became prime minister. He oversaw an increased electorate for the House of Commons in 1832 and abolished slavery across most of the British empire in 1833. Quite the legacy.

MEA CULPA: This morning’s Playbook reporting on an Opinium poll for Tax Justice did not factor in “don’t knows.” We should have said that only one in four say cutting taxes should be the chancellor’s priority ahead of spending on public services.

WRITING PLAYBOOK TOMORROW MORNING: Eleni Courea.

THANKS TO: My editor Rosa Prince, reporters Noah Keate and Andrew McDonald, and the POLITICO production team for making it look nice.

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