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The Calculated Autumn Statement Ahead

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Much has been written lately about the way the body politic is adjusting to the reality of fixed- term parliaments.

It is true that if a week is a long time in politics then five years has begun to feel like an eternity.

However, amid the premature jostling for positioning and attempts to define the meta-narrative [for all avid Borgen watchers] there lies a serious issue for the coalition government, one that is more acute for the majority partner, the Conservatives.

Whilst the Liberal Democrats and Labour continually run the numbers to find winnable combinations that may only require 35% of the popular vote, the Conservative party has a much bigger task.

The Autumn Statement, which morphed into a mini-budget some time ago, is an opportunity for the chancellor to offer some red meat to a restless party whilst also setting the stage for Budget 2014, which will lock down the coalition's economic narrative ahead of the general election.

It is hard to underestimate the invidious position the chancellor is in. The headline figures suggest growth is returning; there is talk of a restoration to pre-crisis levels with forecasters pencilling in a rate of 2.4% for 2014. However, on the ground, people don't yet feel the impact.

Even if wage growth picked up to two or three per cent this would not do much more than keep up with inflation. There is a growing sense that the recovery isn't necessarily a British one, or even a particularly English one, but that it is a recovery being enjoyed only in the car showrooms, estate agencies and restaurants of London.

The chancellor isn't afforded much wriggle room by boosted growth given the vast deficit the Government is running. Meaningful deficit reduction is a medium-term political play though and the Chancellor knows this. His role is to secure a recovery.

George Osborne has travelled a long way since his infamous taxes on grandmothers and pasties but a stumble in the growth figures going into 2015 would be the gift that would keep on giving for the Shadow chancellor and Labour's fast maturing leader.

One of the ways to secure the recovery is to ensure that more people have greater spending power, driving consumption and therefore sustained growth for industry and the country.

While we may see a nod in the direction of the personal tax allowance, the Conservatives may not reap the political rewards of a policy that the Liberal Democrats have sought to take ownership of.

Instead I expect the chancellor to make changes that will appeal to core Conservative voters, but also the country at large. The extension of small business tax relief would help with the former whilst any move to reduce stamp duty or increase the thresholds at which it becomes payable would play well with the latter.

When the chancellor sits down the biggest question will be whether it is enough to hold the course until the election. The realities of governing in a coalition mean this is unlikely to be a paradigm-shifting Autumn Statement; the Conservatives must win a majority in 2015 if they are to effect such a change.

In the meantime the chancellor has a tough task; the Autumn Statement must make an impact, but in a carefully calculated way. Of all those around the Cabinet table there is perhaps no one better suited to the challenge.

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