Back in September, Nick Clegg said he would block any attempt by George Osborne to freeze benefits in this week’s autumn statement. This put the chancellor in something of a quandary. He had been hoping to save several billions with the move, as well as winning the support of a public that is increasingly hostile to people who are claimants.
Another option remains on the table, however, is to allow benefits to rise, but not by as much as they would normally do if the link with inflation is kept. New analysis from the Institute of Public Policy Research suggests there could still be a fair amount of savings to be gained, for example, by increasing them by just 1 per cent.
The IPPR has produced a table of savings from possible options open to the chancellor: Read more
All will become clearer on Wednesday, but FT Westminster has collated some of our recent coverage of recent days for a handy guide to what to expect from the chancellor.
1] FISCAL OVERVIEW Osborne’s plan to cut the deficit is off track – meaning that Britain’s debt mountain is still rising faster than expected. Labour will make this the centrepiece of its attack on the government – as Ed Balls told us last week in an interview: “The Autumn Statement will be the point where the misjudgements of the last two years will be on full display.”
There are growing expectations that the coalition will miss its target of cutting debt as a share of national income by 2015/16 and that spending cuts could extend until 2018. The five-year target for eliminating the structural deficit – originally set for the end of this parliament in 2015 – is likely to be rolled over for a further year, with austerity measures extending deep into the next parliament. Read more