Autumn statement Starmer should beware a poison pill

Liz Truss is about to be removed, like Leon Trotsky, from the history books.

- Larry Elliott

Just as Joseph Stalin expunged mention of his rival from accounts of the Russian revolution, so Thursday’s autumn statement will do its best to airbrush out evidence of Truss’s brief stint as prime minister.

It will fall to Jeremy Hunt to deliver the latest in a series of minibudgets, but there is no question about whether this is a joint operation between the neighbours at 10 and 11 Downing Street. This is the sort of autumn statement Rishi Sunak would have made had he not been thwarted by Boris Johnson during his time as chancellor, or beaten by Truss in the summer leadership race.

To say Hunt and Sunak face a tricky balancing act is something of an understatement. The economy contracted in the third quarter and may go on contracting for some time to come. There is precious little time to turn things round before the next election. Hunt has repeatedly warned he has bad news to announce on Thursday, with reports that he will raise taxes and cut spending by £50bn to £60bn .

In short, the Treasury is about to announce a package of measures that will make the recession worse, even though time is running out before the government has to go to the country. The only real comparison is to Geoffrey Howe’s 1981 budget that withdrew support for households and businesses through the tax and spending system even though the economy was in recession . At least then, the austerity package was accompanied by lower interest rates from the Bank of England. This time, the risk is that Threadneedle Street and the Treasury will be turning the screw at the same time.