Chancellor Philip Hammond confirmed a “reset” of Tory economic policy in his speech on Monday, ditching any timetable for eliminating Britain’s deficit.
His predecessor George Osborne had pledged to do this by 2020—and consistently missed his own targets.
Hammond defended Osborne’s priorities as “the right ones for that time” but said, “When times change, we must change with them”.
That means more “flexible and pragmatic” austerity with more investment.
But the Tories want to ensure that any let up on spending cuts doesn’t mean easing the pain for us, but giving more free cash to their pals.
Giveaways to be unveiled in Hammond’s first Autumn Statement on 23 November include more funding for transport and technology—great news for bosses.
He denied this marked the end of the “age of austerity”. And on top of any new cuts, some of Osborne’s are still set to come, including a new bedroom tax on pensioners’ benefits from 2018.
But austerity has been messier than Osborne reckoned.
Work and pensions secretary Damian Green last week announced that sick and disabled benefit claimants with long term conditions will only be tested once to see if they are “fit for work”. This will be a huge relief for thousands of people who previously faced repeated tests—and the threat of losing their benefits.
But Green’s motives may have more to do with the hated tests costing more to carry out than they saved and causing chaos for private contractors.
Child poverty is rising rapidly
The number of children living in poverty soared by 250,000 in just one year under the Conservative-led coalition government.
The Daily Mirror newspaper obtained HM Revenue and Customs figures.
These show the number of children living in low-income families rose from 2.5 million to 2.75 million between 2013 and 2014.
The HMRC report defined children in low-income households as those from families in receipt of out-of-work benefits or those in receipt of tax credits with an income of less than 60 percent of the national average.
Imran Hussein, director of policy for the Child Poverty Action Group, said, “Child poverty figures are the best measure we have for whether we really are ‘all in it together’.
“What’s clear from these grim figures is that more and more children are being left behind in poverty, missing out on the childhoods and life chances other kids take for granted.”
Families are poorer than in 2008
Six million working families on low incomes are poorer than they were eight years ago due to attacks on pay and soaring costs housing and childcare.
A study by the Resolution Foundation found millions of families needed welfare top-ups to “keep their heads above water”.
According to the study a 28 year old couple with a baby, with one parent on low pay, were £760 worse off in 2016 compared with 2008.
When the couple are older, aged 35, with two children and both are working full time on a medium and low wage, they are still £530 poorer.