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Philip Hammond has to spend more to ‘end austerity’

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Issue 2641
Tory chancellor Philip Hammond (right) claims he is ending austerity
Tory chancellor Philip Hammond (right) claims he is ending austerity (Pic: British High Commission, New Delhi/Flickr)

Tory chancellor Philip Hammond has to spend billions more to meet his pledge to end austerity, a think tank has said.

The Institute for Fiscal Studies (IFS) said Hammond would have to stump up £5 billion a year by 2023 for departments without ring-fenced budgets.

And a further £11 billion would be needed to maintain spending on unprotected services at their current proportion of national income.

IFS director Paul Johnson warned that without new money “we will continue to see cuts in some departments at least as a fraction of national income”.

He added that the scale of the cuts has been “extraordinary historically”.

“We’ve had £40 billion of cuts to department spending and cuts of 30 percent and 40 percent to some budget items,” said Johnson.

“So even if he stops cutting, it’s still not going to feel great in a lot of areas.”

The Tories have repeatedly claimed they are giving new money to the NHS.

One Treasury spokesperson said, “We have made clear that health is our number one spending priority by announcing a five-year settlement which will provide an extra £34 billion a year for the NHS by 2023-4.”

But they are still demanding £22 billion in “efficiency savings” by 2020-1 under the guise of “sustainability and transformation plans”.

Firms plot to raise our bills

Millions of people could be hit by a triple hike in their energy and water bills and council tax in the coming year.

Electricity and gas watchdog Ofgem has announced that it will lift two price caps in April.

This makes a mockery of the Tories’ energy price cap, which they claimed would help ordinary people.

Energy bosses are likely to swiftly increase prices to a new maximum, which is supposedly “capped” at £1,254.

The new rates would see energy bosses charge £34 more than during last December and some 15 million households could be affected.

Martin Lewis of the Money Saving Expert advice site said, “The much-vaunted but ill thought through price cap will now feel like a damp squib to most people.

“It may have cut bills for three months, but from 1 April, the new rate jumps up 10 percent.” On top of the energy price hikes, water and sewerage bills are expected to rise by 2 percent from April.

This would bring the average annual cost to £415 per household.

And council tax is set to rise by 5 percent in April—seeing household bills go up by an average of £80 a year.

Rudd admits food bank links with Universal Credit

Tory work and pensions secretary Amber Rudd has admitted that Universal Credit (UC) has fuelled food bank use.

The Tories previously denied that their hated benefit is driving people into food poverty.

Rudd said “the fact that people had difficulty accessing their money early enough” when switching to UC could have led to more food bank use.

She claimed that “changes” to UC now give people more support.

In reality UC continues to plunge claimants into poverty.

Ministers this week rejected proposals from a committee of MPs to ease sanctions on claimants.

UC is a mechanism for punishing the poor—it should be scrapped now.

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