Lower growth, bigger deficits, targets missed — that’ll be the backdrop to George Osborne’s Autumn Statement tomorrow. So what medicine will he prescribe to make it all better? As usual, many of the policies have been leaked already:
More capital spending, paid for by extra cuts elsewhere
This was announced by Number 10 this morning: £5 billion extra spending on schools, science and transport over the next three years. That’ll include an extra £1 billion for Michael Gove’s academies and free schools programmes, to provide 50,000 new school places. It’ll all be paid for by extra cuts in departments’ resource budgets: 1 per cent more than planned next year and 2 per cent the year after (though Health, Education and International Development will be protected).
Tax relief on pension contributions
This is a move that Danny Alexander has been calling for all year — tax relief on pension contributions disproportionately benefit the wealthy, so reducing them is an austerity measure that doesn’t hurt the poor.
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