Chancellor Philip Hammond’s Autumn Statement delivered today, Wednesday, boosts the rich at the expense of the poor. Hammond was portrayed as being somehow nicer than his predecessor George Osborne.
But scratch the surface and the same old Tories are still there—with major attacks on workers still in place.
So Hammond announced no further welfare cuts. But he said that £3.5 billion of cuts already planned “must be delivered in full”.
Hammond denounced Labour for allowing welfare spending to “spiral out of control” and said welfare spending would still be capped.
Much was made of the “spiralling debt” Hammond unveiled. It’s true that he scrapped Osborne’s idea of getting rid of the deficit by 2016. But he still wants it to go by 2020-2025—which will mean cuts.
Hammond kept plans for spending cuts in government departments in last year’s Spending Review in place.
And he said that public sector net debt as a share of gross domestic product “must be falling” by 2020. Hammond said public spending this year would be 40 percent of GDP—compared to 45 percent in 2010.
The Universal Credit (UC) taper rate was cut from 65 percent to 63 percent from April. Someone on UC will now keep 37 pence of every eligible pound they earn instead of 35p.
Hammond admitted this would only amount to £700 million a year by 2021/22—a drop in the ocean considering the hundreds of thousands of people affected.
Hammond isn’t helping low paid workers—he’s making their situation worse.
The National Living Wage will go up 30p from April next year. This will take it to just £7.50 an hour—much lower than the £8.45 Living Wage, and £9.75 in London—demanded by campaigners. And it still only applies to workers over 25.
Hammond scrapped a pledge to take workers on the minimum wage out of paying income tax. Instead the threshold at which workers start to pay tax will rise from £11,000 to £11,500 from next April.
The TUC said workers on average will lose £1,000 a year until 2020. Meanwhile the Autumn Statement is estimated to push average household expenses up by at least £51.
The rich get a bigger boost. The higher rate of income tax will get a new higher threshold of £50,000. It’s currently £43,001. This means more well off people will avoid the higher tax rate of 40 percent.
The Tories remain committed to privatising housing and handing more wealth the private landlords
Hammond slashed corporation tax to 17 percent—“by far the lowest in the G20” as he bragged. There were many other handouts for the bosses.
Oil and gas bosses will get business rate reductions worth £6.7 billion. An extra £1.1 billion for local transport networks in England will go into the pockets of private firms.
East West Rail got £110 million. “Digital infrastructure” got over £1 billion. And Hammond unveiled 100 percent business rates relief on new fibre infrastructure – a complete tax exemption for the bosses.
Rural Rate Relief will also rise to 100 percent to give “small businesses a tax break”.
Even the Tories’ official figures show that the changes will make the poor poorer. Those in the poorest three sectors in household wealth will be poorer by 2019-20. For some this means losing £250 a year.
Hammond claimed to be bringing in measures to tackle the housing crisis. He said he would ban letting agent fees, saying landlords should pay them. All this will do is encourage landlords to hike up rents to recoup the difference.
Hammond announced a fund of £2.3 billion to provide 100,000 new homes. They won’t be council homes and it isn’t clear how many will be affordable. Another fund of £1.4 billion will apparently produce 40,000 extra affordable homes.
In reality the Tories remain committed to privatising housing and handing more wealth the private landlords.
So Hammond will “relax restrictions on government grants” to “widen” the types of homes that will be built. And there will be a “large scale regional pilot of right to buy for housing association tenants”.
Shadow chancellor John McDonnell said Hammond’s speech gave no hope. “The figures speak for themselves,” he said. “Growth down, wage growth down, business investment down”.
He said the Tories’ economic plan had “failed”. But the plan is to make ordinary people pay for the crisis—and so far it’s largely going to plan.
The Tories know that austerity, privatisation and cuts are unpopular. That’s why Theresa May wants to “move on” from what she sees as a toxic legacy left by Osborne and David Cameron.
In reality she is continuing their project—while trying to offset resistance to it.