Autumn statement: Jaw-dropping change of tack as Jeremy Hunt announces more spending – and sets trap for next election
There is so much about today’s autumn statement that hurts the head.
The job of today’s statement – the reason it was urgent and necessary and painful – is because there was a huge black hole in the public finances that was unsettling the markets and pushing up government debt.
Yet – amazingly – for the next two years Jeremy Hunt announced the Sunak government will overall spend more money, not less.
A jaw-dropping change of tack
Yes, there are big immediate tax rises that many including Tory backbenchers will hate (£7.4bn worth in the next financial year, for example). But this is offset by an incredible £9.4bn of additional spending on energy help, school budgets, social care and the NHS. A jaw-dropping change of tack.
The argument by the chancellor is that a near-term boost to spending is needed to dampen the recession we are now in and keep more people in their jobs. It’s just a very different message from the one we’ve been hearing for the last month.
Incredibly, as Sky News revealed last night, Mr Hunt is even keeping the Liz Truss Energy Price Guarantee and extending it for another year – the very scheme due to be junked in March because it was too risky. That’s quite something, one month after he binned it dramatically on TV.
There is, however, much more theoretical pain, though not yet. In order to calm the markets, the Sunak government is promising an incredible squeeze will begin after an election.
Yes there will be a small 1% real terms increase in budgets after 2025, but that’s much less than then chancellor Rishi Sunak promised in March, and after a decade of pain.
This creates an accountancy bonanza: it means Mr Hunt is able to say he’s saved a theoretical £27bn in 2027, reducing theoretical future borrowing costs. But is this fantasy, because nobody can make promises about public spending that far ahead, given not a word of either the Labour or Tory manifesto has been written.
Read more on the autumn statement:
Key announcements from autumn statement
How can chancellor reduce ‘financial black hole’?
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All the key data and analysis
A trap for Labour
So in some regards, today’s autumn statement is a trick, a magician’s prestige, aimed not so much at the public but at the markets.
Will they buy it? Will investment houses upon which the UK depends simply trust the sombre seriously seeming spectacle of Mr Hunt and Mr Sunak more than the Truss-Kwasi double act, even if the actual numbers don’t pass muster? Actually there’s a chance they do, and in that sense it works. But it might not. It’s a gamble.
All of this feels very reminiscent of the way George Osborne would approach his budgets – no wonder he’s been seen going into Downing Street in recent weeks and his old lieutenants are advising Mr Hunt behind the scenes.
The trademark Osborne move embedded in today’s decisions is to set a trap for Labour. By doing a Labour-friendly set of tax rises which focus on the richest, then squeezing spending in the next parliament, Mr Sunak and Mr Hunt want to challenge Labour. If they want to go into the next election promising to spend more on public services, where will they get the cash, they will ask. It’s a dilemma, and it’s unclear how Labour will answer.
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’12 weeks of Conservative chaos’
But again this is a gamble. The short-term tax rises are real – taking us to the highest tax burden since the Second World War – while the increase in the amount people will pay on energy will go up and mortgages are still rising, and public sector pay still squeezed. The Office for Budget Responsibility suggests a 7% real terms drop in living standards next year. This will all feel very real.
Perhaps by the next election, Labour will be put on the spot and have to justify where tax rises will come from. But maybe people will be feeling the squeeze to such a degree they want change without needing to interrogate too much the alternatives.
That’s the battle to be fought out at the next election.
World
Trump vowed to end Ukraine war in first 24 hours of his presidency – nearly 200 days in, could he be close?
Seven hours is a long time in US politics.
At 10am, Donald Trump accused Russia of posing a threat to America’s national security.
By 5pm, Mr Trump said there was a “good prospect” of him meeting Vladimir Putin “soon”.
There had, he claimed, been “great progress” in talks between his special envoy Steve Witkoff and the Russian president.
It’s difficult to gauge the chances of a meeting between the two leaders without knowing what “great progress” means.
Is Russia “inclined” towards agreeing a ceasefire, as Ukraine’s president now claims?
Is Mr Putin prepared to meet with his Ukrainian foe, Volodymyr Zelenskyy, too?
The very fact that we’re asking those questions suggests something shifted on a day when there was no expectation of a breakthrough.
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Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Mr Trump repeatedly vowed to end the war within 24 hours of becoming president.
On day 198 of his presidency, he might, just might, be one step closer to achieving that.
Staff at a zoo in Germany which culled 12 baboons and fed some of their carcasses to the lions say they have received death threats.
Tiergarten Nuremberg euthanised the healthy Guinea baboons at the end of July due to overcrowding in their enclosure.
Some remains were used for research while the rest were fed to the zoo’s carnivores.
Plans to kill the baboons were first announced last year after the population exceeded 40, and protestors gathered outside the zoo to show their outrage.
When the site closed last Tuesday to carry out the cull, several activists were arrested after climbing the fence.
The director of the zoo defended the decision, saying efforts to sterilise and rehome some baboons had failed.
“We love these animals. We want to save a species. But for the sake of the species, we have to kill individuals otherwise we are not able to keep up a population in a restricted area,” Dr Dag Encke told Sky News.
These are not the specific animals involved. File pics: Reuters
‘The staff are suffering’
He said police are investigating after he and the staff were sent death threats.
“The staff are really suffering, sorting out all these bad words, insults and threats,” Dr Encke said.
“The normal threat is ‘we will kill you, and we’ll feed you to the lions’.
“But what is really disgusting is when they say that’s worse than Dr Mengele from the National Socialists, who was one of the most cruel people in human history.
“That is really insulting all the victims of the Second World War and the Nazi regime.”
Josef Mengele was a Nazi officer who performed deadly experiments on prisoners at the Auschwitz concentration camp during the Second World War.
Dr Dag Encke
Zoo animals ‘treated as commodities’
Culling animals and feeding them to predators isn’t unheard of in zoos.
In 2014, Copenhagen Zoo caused controversy by euthanizing an 18-month-old male giraffe called Marius and feeding his body to the lions.
At the time, the zoo said it was due to a duty to avoid inbreeding.
Dr Mark Jones, a vet and head of policy at Born Free Foundation, a charity which campaigns for animals to be kept in the wild, denounced the practice and said thousands of healthy animals are being destroyed by zoos each year.
“It reflects the fact animals in zoos are often treated as commodities that are disposable or replaceable,” he said.
Marius the giraffe was put down and publicly fed to lions at at Copenhagen Zoo in Denmark. Pic: Keld Navntoft/AFP/Getty
Zoo asks for unwanted pets
Earlier this week, a zoo in Denmark faced a backlash for asking for unwanted pets to be donated to be used as food for its predators.
In a Facebook post, Aalborg Zoo said it could take smaller live animals such as chickens, rabbits and guinea pigs, as well as horses under 147cm. It said the animals would be euthanised by specially trained staff before being fed to carnivores like the European lynx.
While some people supported the scheme, saying they had donated animals in the past, others are outraged.
“The very idea of a zoo offering to take unwanted pets in order to kill them and feed them to their predators will, I think, horrify most right-minded people,” said Dr Jones.
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Dr Mark Jones
Aalborg Zoo has now closed the post to comments and said in a statement: “For many years at Aalborg Zoo, we have fed our carnivores with smaller livestock.
“When keeping carnivores, it is necessary to provide them with meat, preferably with fur, bones, etc., to give them as natural a diet as possible.
“Therefore, it makes sense to allow animals that need to be euthanised for various reasons to be of use in this way.
“In Denmark, this practice is common, and many of our guests and partners appreciate the opportunity to contribute.”
World
Trump could meet Putin as early as next week to discuss Ukraine ceasefire – White House official
Donald Trump could meet Vladimir Putin in person as early as next week to discuss a ceasefire in Ukraine, a White House official has said.
They said the meeting would be conditional on the Russian president meeting his Ukrainian counterpart Volodymyr Zelenskyy, Sky News’s US partner network NBC News reported.
It came days before the White House’s deadline for Russia to reach a peace deal with Ukraine or face severe economic penalties, which could also target countries buying its oil.
Asked during a news conference at the White House if the talks would take place, Mr Trump said: “There’s a very good prospect that they will.”
He said it had not been determined where the talks would take place, but added: “We had some very good talks with President Putin today.”
However, he said: “I’ve been disappointed before with this one.”
Asked if Mr Putin made any kind of concession to lead to the development, Mr Trump did not give much away, but added: “We’ve been working on this a long time. There are thousands of young people dying, mostly soldiers, but also, you know, missiles being hit into Kyiv and other places.”
More tariffs ‘could happen’
Mr Trump also said he could announce further tariffs on China similar to the 25% he announced on India over its purchases of Russian oil.
“Could happen,” he said, after saying he expected to announce more secondary sanctions intended to pressure Russia into ending its war with Ukraine.
Earlier, he imposed an additional 25% tariff on Indian goods, on top of a previous 25% tariff, over its continued purchases of Russian oil.
India’s foreign ministry spokesperson said the additional tariffs were “unfair, unjustified and unreasonable”.
Vladimir Putin welcomes Steve Witkoff during a meeting in Moscow. Pic: Sputnik/Reuters
It came after Mr Putin held talks with Mr Trump‘s special envoy Steve Witkoff in Moscow, with the meeting lasting around three hours.
In a post on Truth Social, Mr Trump said Mr Witkoff “had a highly productive meeting” with Mr Putin in which “great progress was made”.
He said he had updated America’s European allies, and they will work towards an end to the Russia-Ukraine war “in the days and weeks to come”.
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Correspondents in Washington and Moscow break down a busy day of diplomacy
‘The war must end’
Mr Zelenskyy later said he and Mr Trump spoke on the phone after the meeting. He said “European leaders also participated in the conversation” and “we discussed what was said in Moscow”.
He added: “Our common position with our partners is absolutely clear: The war must end. We all need lasting and reliable peace. Russia must end the war that it started.”
Mr Zelenskyy later said: “It seems that Russia is now more inclined to agree to a ceasefire.”
He added that the pressure on Moscow “is working”, without elaborating, and stressed it was important to make sure Russia does not “deceive us or the United States” when it comes to “the details” of a potential agreement.
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