Socialist Worker

Hammond’s budget—money for the bosses, more misery for the rest of us

by Dave Sewell
Issue No. 2582

Tory chancellor Philip Hammond

Tory chancellor Philip Hammond (Pic: Guy Smallman)


Tory chancellor Philip Hammond’s budget speech on Wednesday did even less than some expected to address the epidemic of poverty and low pay in Tory Britain.

A mooted pay rise for nurses didn’t materialise, for example. And the public sector pay cap is still in place. Public sector pay awards might not even be agreed until next Summer, according to the GMB union.

The national minimum wage is to go up by 33p to just £7.83 an hour for workers over 25 outside London.

Universal Credit benefit claimants will now have access to a slightly bigger loan than before. And they won’t have their payments cut off for two weeks when switching from housing benefit.

MPs voted last week to reduce the time new Universal Credit claimants must wait before receiving any from six weeks down to four. Hammond split the difference—it will now be five weeks.

He said he couldn’t go further without keeping Universal Credit payments on a monthly basis, something that’s already causing huge problems to claimants with weekly wages.

But the whole package was framed by damning official forecasts for economic growth. These were cut sharply for the next five years.

The government’s pet forecaster the Office for Budget Responsibility said its projections were significantly worse than it had forecast at the time of the budget in March.

And average wages are still expected to be lower in 2022 than they were at the start of the financial crisis in 2008.

The fact that there had to be emergency extra funding for the NHS was a shameful indictment of the Tory cuts and privatisation that brought it to that point.

And the £3.75 billion Hammond announced was less than half what NHS bosses say is the minimum they need.

Hammond confirmed the obvious, that he would set aside money to prepare for Brexit—including for the possibility of a no-deal Brexit.

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But most of the budget was low-level stuff that won’t have much of an impact on anything.

Things like a vague promise to ask environment secretary Michael Gove to think about doing something about plastic pollution because it was on TV this week.

There’s a bit of a shake-up to business rates, including a change in the way they calculate inflation that will save bosses £2 billion.

The biggest funding announcements went to industry and infrastructure, again focusing on the private sector.

Hammond promised to “unlock” £20 billion for small but growing businesses and allocate £2.3 billion and a tax break for bosses’ research and development, among other giveaways.

He also expanded the National Productivity Investment Fund he launched last year.

Some of this money will get to public transport that’s been waiting for it for years, but blacklisting building firms stand to gain the most.

The money was channelled in part through regional devolution schemes such as former chancellor Osborne’s pet project the “Northern Powerhouse” and its follow-up the “Midlands Engine”.

For all the bitterness between the two Tory chancellors, it could have been Osborne’s budget.

Hammond made a dig at Osborne’s alleged drug use, while Osborne’s newspaper the Evening Standard ran a cartoon of Theresa May holding Hammond’s severed head.

But Hammond’s initial attempt last year to look like he was breaking with Osborne’s austerity economics has come to little.

And he was left repeating Osborne’s old ever-broken promise like a stuck record. Britain’s national debt is, apparently, about to come down and justify all the painful years of austerity.

It’s still growing, but the “peak” is just around the corner. Just like it has been since 2010.

And even Hammond had to admit that the underlying economic difficulties haven’t been solved. Britain’s productivity “continues to disappoint”.

Labour leader Jeremy Corbyn called the budget “a record of failure with a forecast of more to come.”

He’s right. The budget is another reminder that the Tories have nothing to offer—and we need to step up the resistance to get them out.


Bonanza for private property developers, weasel words over tenants’ safety

Housing campaigners protested in parliament square ahead of Philip Hammond’s budget

Housing campaigners protested in parliament square ahead of Philip Hammond’s budget (Pic: Guy Smallman)


If there was a policy in the budget intended to grab positive headlines it was investment in housing. But that policy was designed to strengthen the grip of the market forces that drive the housing crisis.

Private developers are to get a £44 billion bonanza of capital funding, loans and guarantees. Hammond predicted that this will mean 300,000 new homes a year, but not until the mid-2020s.

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A cut in stamp duty for first time buyers will increase the amount of money going into mortgages. That will potentially push up prices and make homes even more unaffordable - as even the official OBR forecaster pointed out.

There was a sweetener for union leaders, by making the TUC union federation part of a “partnership” to “set a strategic direction” for the training of construction workers.

Under pressure over the Tories’ callous response to the Grenfell Tower fire, Hammond announced £28 million of funding for Kensington and Chelsea council.

This is earmarked for mental health services and “regeneration”—a term that can cover the some of the worst schemes of demolition and gentrification.

But Hammond left it down to cash-strapped councils to improve fire safety in other blocks.

His weasel-worded promise not to “let financial constraints get in the way” deliberately avoided meeting Labour’s demand of £1 billion to pay for sprinkler systems.


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