For all practical purposes the Autumn Statement is a budget statement, and so tomorrow has all the expectation that goes with such an event.
What are the key issues? First, will Osborne admit, however obscurely, that his policies have failed, as they have?
Second, given that failure will he announce any form of fiscal stimulus? And if he does, how will he pay for it? He has the capacity to borrow, without a doubt. But will he cut instead, and if so what? What will the distributional impact be? Will women suffer most, as usual under this government? And again, will the poor pay disproportionately, as has been his habit?
Third, will he raise tax? His deficit is going to be bigger than expected. That should, as any true Keynesian knows, mean he should borrow with the aim of creating growth which as the multipliers, especially on investment, show can pay for itself in yield to the government. But he’s no Keynesian. So will he increase tax instead? And if so, on who? If, as is trailed, it’s on the rich this can only be by reducing allowances. Personal allowances have already gone. He failed to cap charitable donations in the last budget. So is it the other obvious target of pension tax relief this time?
And what of tax avoidance? The General Anti-Abuse Rule that he will trumpet goes nowhere near Google, Starbucks and Amazon, and he knows it. So what can he say about them when he can hardly ignore the issue? Or will he have the courage to say the whole corporation tax system is broken internationally and he wants to revisit if from scratch. Will he have the courage to tell the OECD that? Is this the budget where he says international tax cooperation means embracing the EU idea of a Common Consolidated Corporate Tax Base for Europe, or will he just muddle along?
As for other tax avoidance, given the limited scope of the GAAR what will he do? Crack down on promoters? But how?
Will he be daft enough to sing the praises of the UK Swiss tax deal when the German parliament has just rejected it because it is too lenient on tax cheats and lets them off the hook, a fact with which even the FT agrees?
And as for HMRC — how much is he going to supposedly reinvest? Is it £77 million or £154 million. Press releases have been confused on the issue. And is this real new money or simply a reduction in the rate of cuts as seems most likely?
And will be there any surprises? He tried them in March and it was a disaster. Can he possibly risk it again?
This is a lame duck Chancellor in charge of a failed economy policy for which any other Prime Minister would have sacked him likely to issue a lame duck budget with the sole aim of avoiding political pitfalls.
And yet, if he’s cautious in the face the urgent need for action he will simply fall into yet another elephant trap. Whichever way he turns he looks likely to lose.
The sad thing is, we all lose with him.