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The Chancellor's Autumn Statement: Reasons He'll Be Cheerful?

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The economy is still the top issue for the government as chancellor of the exchequer George Osborne prepares for his Autumn Statement before Parliament today, and the economy remains the top issue for the public as well. Over half of Britons (55%) report it as a key issue in the November Ipsos MORI issues index, well above the next nearest area of concern (unemployment, which is itself an indicator of hard times). In fact the economy has been the top issue for 50 consecutive months, and a recent Ipsos MORI poll for the RSA (Royal Society for the encouragement of the Arts, Manufacture and Commerce) found that 61% of Britons are concerned about the effects of cuts on them and their family over the next year.

However, the Ipsos MORI Economic Optimism Index (EOI) shows that the public are beginning to feel slightly more positive about the direction of the economy compared to earlier in the year. At -6 the November Index is still some way from the -32 seen in June and July, and for the last three months the proportion of people who think that the economy will get worse in the next twelve months has been less than 40% for the first time since July 2010.

With the Autumn Statement expected to include an announcement on the already postponed fuel duty, measures to tackle tax avoidance to boost revenue from taxation and strengthen the sense that "we're all in this together", and further cuts to public service budgets, there is likely to be plenty for supporters and critics to comment on. Indeed, given that the public itself is still divided on what needs to be done this seems inevitable.

Whatever the content, Mr Osborne and the Coalition will be hoping to avoid a repeat of the Budget in March; back then, six in 10 Britons felt the Budget was bad for them personally. Since then, and the local elections that followed, the Conservative Party has fallen behind the Labour Party in the polls, and since May the average Labour lead over the Conservatives is 11 points compared to 2.5 points from January to April. The budget was also harmful to the Chancellor's personal reputation with his satisfaction ratings falling from -7 pre-Budget to -30 post-Budget .

Despite this lead in the polls and slip in the Chancellor's reputation, the Labour Party has not managed to overturn the Conservative Party's lead as the party most trusted by the British public to manage the economy. Even following the controversies that surrounded the Chancellor's Budget, the Conservative and Labour Parties were seen as the best party to manage the economy by roughly equal proportions of people back in May. By September the Conservatives have actually increased their lead over Labour on this vital issue to five points. This suggests that the public still attribute some blame for the current economic problems to the previous Labour Government, and the Labour party still has a lot of convincing to do.

This will give the chancellor a lot of confidence going into the Statement. It's unlikely we'll see the furore we had following the Budget, but he'll know that even his less popular measures are unlikely to result in lasting damage - as long as people's optimism about the real economy continues to increase.

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