Liveblog: Progressive responses to the Autumn Statement

Green Politics

Live analysis of Philip Hammond's statement from progressive parties, NGOs, trade unions and think tanks

Welcome to our liveblog. Chancellor Philip Hammond has delivered his first Autumn Statement. We’ll be updating this blog through the afternoon with responses from political parties, NGOs, think tanks and other commentators. Hit refresh for latest updates.

Have something to contribute? Email editor@leftfootforward.org or tweet me @niamhsquared.

18.05: That’s it from me and our liveblog. It’s not been a good day, but then we didn’t expect it to be.

While Philip Hammond tried to put a positive spin on things, the reality is that growth is falling, debt is about to hit its highest point in the last 50 years and working people are the ones bearing the brunt.

The disaster facing us isn’t entirely attributable to Brexit, but it’s beyond dispute that the vote to leave the EU is the primary contributing factor.

changes-to-borrowing

What’s more, as Andrew Harrop of the Fabians warns, this could just be the start, since ‘almost all the dire economic and fiscal news that was revealed today was the result, not of Brexit itself, but of the referendum decision and the pending Article 50 negotiation.’

And, as Prem Sikka writes, nothing we heard today will come close to tackling this mess. Corporation tax has been slashed to 17 per cent, changes to income tax will overwhelmingly benefit the richest half of households and — astoundingly — not a single extra penny has been dedicated to adult social care or the NHS.

Keep an eye on Left Foot Forward for further updates and analysis in the coming days.

Many thanks for reading.

 

17:50: Ashwin Kumar, chief economist at the Joseph Rowntree Foundation, says that ‘2017 is going to be a tough year as wages will barely grow faster than prices.’

“Whilst there will be modest gains for some people from today’s Autumn Statement, for most people on below-average incomes, these will be dwarfed by previously announced cuts to benefits.”

joseph-rowntree

 

17.35: Reduced net migration will hit the government’s finances and require increased borrowing, according to the OBR, although it’s difficult to assess the extent because we don’t know where net migration will end up.

obr

Norman Lamb, a supporter of Open Britain, commented:

“The OBR has set out in black and white the facts that Leavers can’t bring themselves to hear – immigration is good for our economy, and hard Brexit will make our country worse off.

“This just underlines the fact that Britain after Brexit must remain open to talent from around the world, and stay an integral member of the Single Market.”

 

17.20: Unite’s Len McCluskey has accused the Conservatives’ of ‘massive fraud’ given the failure of their Cameron-Osborne-era policies.

He said:

“Today’s timid statement promised only the deepening economic shock of never-ending austerity, and gave little indication that the government is up to laying the solid base necessary to meet the enormous challenge of Brexit.

“What is clear is that the Conservative party owes the UK people a huge apology.  With debt set to soar, yet more promised targets missed and living standards still dropping, the truth is that Tory policies were a massive fraud.  Six years of pain for the poorest, six years of sustained assault on our public services – and with more to come – have taken our economy and country backwards.

“Against that backdrop, and with Brexit looming, why then is the government’s economic plan is simply to continue with the very policies that have weakened our economy?”

On the failure of working class communities, he continued:

“There was little in the chancellor’s statement to indicate that the Conservatives truly heard the message of 23 June, which is that people are fed up with losing out.

“Once again a Conservative government had to be shamed into action over planned cuts to incomes, but the pennies on the Tory ‘living wage’ still leave it far short of the actual living wage needed for people to meet the growing costs of living in this country. Low waged families will still lose thousands of pounds a year.

“Continuing to target cuts at the lowest incomes and our vital public services such as the NHS are cruel, senseless and drain growth from communities.

“From a government promising billions for a corporation tax give away to big business, this is also downright immoral.”

 

17.00: Executive Director of The Equality Trust, Dr. Wanda Wyporska, tells Left Foot Forward:

“The policies discussed today, will hit the poorest hardest and further widen the UK’s dangerously high levels of inequality. Those receiving Universal Credit will be glad to keep more of their earnings at the end of the month, but it’s small fry compared to the wider cuts they face.

The Government is giving the “just managing” a little with one hand, but taking a lot more with the other. It’s good to see the distributional analysis reinstated, so we can see how different households are affected, but it’s a scandal that when the richest one per cent owns almost a quarter of the country’s wealth, they are even better off through a raise in the personal allowance and 40p income tax thresholds.

“We need to see more support for those who are struggling with low incomes and high costs. The Government must look again at policies that reduce economic inequality if they want to improve livings standards, tackle the cost of living crisis and build a strong and sustainable economy that benefits us all, not just a gilded elite.

“The UK’s huge inequality harms our society and our economy. We know that more unequal societies have lower levels of trust, worse mental and physical health, and higher rates of violent crime.”

Read Wyporska’s article for Left Foot Forward on what the chancellor could have done to support just about managing families and reduce inequality.

16.50: Chair of Vote Leave Watch, Chuka Umunna MP, has called on the government to make good on the Leave campaign’s promises.

chuka-umunna

“Vote Leave campaigners promised a Brexit vote would herald a new dawn for our economy. But we have been told by the independent OBR that it will bring lower growth, increased unemployment, lower wages and a flight of investment, harming jobs and wages.

“So what they called Project Fear appears to be turning into Project Fact, and the hardworking people of this country will pay the price.

“To add insult to injury, the Government today had the opportunity to spell out how they will make real the pledge – made by Cabinet ministers like Boris Johnson, Liam Fox and others – to spend £350 million more a week on our NHS; but there was no sign whatsoever of that cash in this Autumn Statement.

“If Brexit really does mean Brexit, it must mean a windfall for the NHS – people will not allow Leave campaigners in government to walk away from this.”

 

16.25: Hang on, what about the ‘jams’?

jam

IFS director Paul Johnson pointed out to the BBC that there actually wasn’t much for them in this statement, despite all the government’s rhetoric.

“There’s not much here in terms of measures for that group. We do of course have the National Living Wage rising to £7.50 an hour in April – that’s quite a big increase on the minimum wage as it was a year ago and that will help a lot in that group.

Otherwise we have got this small increase in the generosity of Universal Credit when it finally comes in, but that nowhere near offsets the cuts that were announced back in June 2015.

No doubt we will also be told that again freezing fuel duties will help that group but of course most of that money will go to better off people who tend to consume more fuel. So there is not an enormous amount here for that group.”

 

16.15: The chancellor made much of the UK’s current employment figures, but had rather less to say about income. The independent Institute for Fiscal Studies projects that real incomes in 2021 will be 3.6 per cent lower than was expected in March.


16:00: Green Party co-leader Caroline Lucas slammed the chancellor’s failure ‘to mention the words climate change, even just once, anywhere in this statement.’

 

15:50: The SNP’s Stewart Hosie MP accuses the government of having ‘no credible plan for the future’.

“We have had the Brexit Bombshell; growth will be slower, there will be higher inflation, higher borrowing, and higher debt.

“A right-wing hard Brexit is set to cost Scotland 80,000 jobs and £11.2billion per year, hitting the living standards of families, the success of our businesses, and the well being of communities across the country – yet the Tories still have no plan and no answers.

“This Autumn Statement was an admission of six years of Tory failure on the economy – but with no credible plan for the future, and with continued cuts to support for the millions of families struggling to get by as a result of damaging austerity.

“The UK government has some cheek claiming to be on the side of those families ‘just about managing’ when it is six years of Tory austerity cuts and mismanagement of the economy that has hammered middle and low income families – cutting support, stagnating wages, squeezing living standards, and leaving working families struggling to get by.

“While any climb-down on the devastating cuts the Tories have made to support for families is welcome, today’s announcements are small fry and the UK government spin has been beyond shameless. Reversing a fraction of the £12billion cuts to social security support can hardly be described as a boost when the vast majority of the cuts to families, the disabled, the poorest and most vulnerable will still go ahead. This is not a budget that delivers for working people.”

 

15.30: The biggest news from today’s Autumn Statement is that the OBR has laid bare the cost of Brexit borrowing. Compared to the pre-referendum forecasts the overall increase in borrowing is calculated at £122bn, while the direct Brexit effect is calculated at £58.7bn.

For the passengers of the Vote Leave bus — that’s a cost of £226 million a week.

Commenting on the figures, Open Britain spokesperson Pat McFadden MP said

“Today, for the first time, there was an official cost placed next to the referendum outcome. Today, the real picture of Britain’s post-Brexit economy emerged – borrowing up, growth down, investment lower, prices higher.

“The eye-watering £58.7 billion Brexit borrowing bill means less money for public services, not more as we were promised.

“The Government must now do everything it can to safeguard jobs and investment, which means rejecting a hard and destructive Brexit.”

 

15:10: What does the Autumn Statement mean for women? Rebecca Omonira-Oyekanmi of the Women’s Budget Group shared the following summary with Left foot Forward.

“Before the Autumn Statement we were promised action to help the ‘Just about managing’. While the increase in the minimum wage and reduction in the universal credit taper to 63p are welcome, they are a drop in the ocean compared to the cut in living standards — of between 18 and 20 per cent by 2020 — facing women and the poorest households because of cuts to benefits, tax credits and services since 2010.

Increases to the personal tax allowance will do nothing to help those earning too little to pay income tax (65 per cent of whom are women). Raising the 40p threshold will largely benefit men since 72 per cent of higher rate tax payers are men. Together with the freeze in the fuel duty, these measures benefit men and the better off.

We know that tax cuts announced before today will cost £16billion by 2020. This money could be spent tackling the growing social care crisis. Cuts to social care hit women particularly hard as the majority of those needing care and the majority of those providing it, both paid and unpaid, are women.

The Chancellor identified Britain’s productivity gap as a major problem. What he fails to acknowledge is that productivity is dependent on the health and well-being of the population and a health and care system in crisis undermines this.

Austerity was presented by the Prime Minister today as about ‘living within your means’, in reality it is a political choice to cut services and benefits which women rely on while introducing tax cuts that will largely benefit men.”

 

 

15.05: I’ll just leave this here…

 

14.45: Nothing on adult social care

The criticisms are piling up over the Chancellor’s failure to mention social care in his statement.

‘It’s astonishing that this Autumn Statement has failed one of the key challenges facing the Government: the funding crisis they’ve created in social care,’ commented Barbara Keeley MP, Labour’s Shadow Minister for Social Care.

“The Tories have ignored the chorus of voices pleading for them to address the mess they’ve created with their cuts of £4.5 billion to social care budgets. It’s a scandal that they’ve not offered even a penny more to support this vital service”

lga-adult-social-care

Caroline Abrahams of Age UK calls the Autumn Statement ‘a disaster for older people’:

“The Government’s failure to provide any respite for our beleaguered social care system in the Autumn Statement spells deepening misery for many older people.’

‎”It means current trends are certain to continue: more older people will get no help or not enough help; more care companies will exit the market or fold; more people will have to fund their own care and face big, rising bills; more family members – including many in their 80s and 90s – will have to shoulder the care of a loved one alone; more care staff will quit for less stressful jobs elsewhere; and all the good people working in social care battling to sustain good standards of care will face an even tougher job than they do today.’

“The debate about the future of social care has gone beyond whether there is a crisis to how to mitigate its impact, including on the NHS, and more recently to how to prevent its total collapse – yet still the Government does not act. Older people are bound to wonder why not and we wouldn’t blame them for concluding that the failure to value social care in this country is also a commentary on the value our society places on them and their yearning for a decent and dignified later life.”

 

14.35: UNISON general secretary Dave Prentis says that despite the rhetoric, Philip Hammond has offered yet another austerity plan.

“Despite all the rhetoric, the previous Chancellor’s austerity plan is still very much intact. There was precious little, if anything, for our beleaguered public services.

“The government is spreading the ‘jam’ far too thinly. Public service workers and the health, education and local council services they provide are hurting badly.

“Aside from those on the very lowest wages, the pay misery for school, hospital and town hallstaff goes on. The government’s stubborn refusal to end the one per cent pay cap means wages are lagging way behind rising food and fuel prices, causingreal financial hardship.

“And with the Brexit storm clouds gathering, the grim economic outlook can only spell more despair for public services.”

Writing for Left Foot Forward, Prem Sikka argues that ‘Theresa May’s government promised a new economic dawn and policies to cope with Brexit, but there is little to suggest any new thinking.’

 

14.25: The chair of the Local Government Association, Lord Porter, has slammed the government’s failure to address the social care crisis in its Autumn Statement.

He comments:

“Councils, the NHS, charities and care providers have been clear about the desperate need for the Chancellor to take action to tackle the funding crisis in social care. It is unacceptable that this has not been addressed in the Autumn Statement.

“The Government must take urgent action to properly fund social care if councils are to stand any chance of protecting the services which care for the elderly and vulnerable. Extra council tax-raising powers will not bring in enough money to alleviate the pressure on social care and councils will not receive the vast majority of new funding in the Better Care Fund until the end of the decade. Services supporting our elderly and vulnerable are at breaking point now.”

He continued:

“The next few years will be extremely challenging for councils who we estimate face an overall £5.8 billion funding gap by 2020. Even if councils stopped filling in potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they will not have saved enough money to plug this gap by the end of the decade.”

 

14.20: Chief executive of the think tank Demos, Claudia Woods, comments:

“The Chancellor is in a difficult position coming into the Autumn Statement, with competing pressures forcing him to navigate a careful path. Ahead of Article 50 being triggered, there’s a clear need to calm jitters among both nervous consumers and businesses, so measures to encourage both spending and investment – such as through tax relief – were to be expected.

“In the broader context of the Referendum, and the divisions it laid bare across society, the Prime Minister has also made plain her objective to speak to the needs of the ‘Just About Managing’ class through adjustments to help with the day-to-day bottom line, such as the relief on fuel, childcare and other everyday expenses.

“But despite best intentions, the fact remains that finances are tightly constrained, and there is little to go around; while the language of austerity may drift away, its legacy will be hard to shift. There have been worthy calls to scrap the Autumn Statement, but in such a precarious and uncertain environment, the opportunity to hear concrete initiatives from the Chancellor means this will be a more significant occasion than perhaps many expect.”

14.08: Following Philip Hammond’s comments, Green Party economic spokesperson Molly Scott Cato MEP told Left Foot Forward:

“Hammond acknowledges a £122bn Brexit black hole. I wonder how many Leavers think this a price worth paying? Despite digging themselves into this hole, the Tories still stand by a 17% corporation tax pledge, sending a signal that Brexit Britain will see a race to the bottom and the UK will become a leading global tax haven.”

 

14.00: Commenting on the Autumn Statement, Liberal Democrat leader Tim Farron said that the Tory government is ‘not competent to deal with the challenges ahead’.

“This is a Government that is just about managing. The official figures have revealed a £220 billion Brexit black hole- hundreds of billions taken out our economy when we need it most. Given how bad the outlook is, it’s no wonder the Chancellor doesn’t want to have to do another Autumn Statement.

“The OBR figures forecast a rise a unemployment and a fall in living standards.

“We are seeing a drop in tax receipts of £8.2 billion over the next two years alone.  That’s enough to fund over 330,000 nurses.  In response the Chancellor offered nothing but reheated headlines and recycled announcements.

“He and his Government are not competent to deal with the challenges ahead. They are going to hit people in the pocket through their hapless handling of Brexit, and Labour can offer no opposition, having backed them on Brexit.

“Yet, the Liberal Democrats have consistently campaigned for more funding the NHS as we are on the edge of another winter crisis and our health service is at breaking point but yet the government has turned a deaf ear to these calls.

“Sadly now patients will pay the price. There is also nothing for public sector workers, our doctors, teachers and armed forces, who deserve a proper pay rise.”

 

13.50: TUC general secretary Frances O’Grady warns that today’s OBR forecast faces working people with a hit of £1,000 by 2020.

“Today’s OBR forecast shows that the average annual wage will be £1,000 lower in 2020 than predicted at the Budget. And this is on top of wages still having not recovered to their 2007 levels.

“This is yet another blow to ordinary working people’s standard of living. And far from being focussed on ‘just about managing’ families, this shows up the government’s plans as inadequate.

“Home helps, firefighters and nurses are facing real terms pay cuts – but the Chancellor missed the opportunity to help them. The rise to the national minimum wage is welcome – but under-25s will still miss out on the full amount. And the partial restoration of major cuts to Universal Credit isn’t anywhere near the help ‘just about managing’ families need.

“These are political choices. The Chancellor has chosen tax cuts for corporations and the better-off, rather than putting money in the pockets of ordinary working people.”

 

13.45: Director of the think tank CLASS, Dr Faiza Shaheen, has issued the following statement:

“This Autumn Statement in no way speaks to the scale of the challenge that Britain faces in delivering a successful Brexit and addressing deep seated inequalities. What we needed was bold investment in public services and social infrastructure: commitment to housing, quality job creation, and support for young people. What we’ve got is a policy-lite statement, with only tokenistic attempts to help those that are “Just About Managing” (JAMS), and very little to help those that aren’t managing all”.

 

13.40: Today’s public debt projection is probably the most striking element of today’s statement. It will hit a modern record of 90.2 per cent of GDP in 2017/18.

res-foundation-debt

(via Resolution Foundation)

 

13.35: Hammond has now finished his statement — with a surprise announcement that he is abolishing the Autumn Statement altogether — and John McDonnell is delivering his response.

I’ll shortly be posting rapid responses from a range of progressive commentators.

 

13.25: Worth noting indeed.

 

13.15: As expected, Britain’s corporate tax rate will be cut to 17 per cent.

Anneliese Dodds MEP wrote for Left Foot Forward on the recklessness of this cut.

“The Resolution Foundation has calculated that May’s reckless tax cut would cost the UK Treasury £10bn — a gap which will have to be filled. Furthermore, by rushing towards low tax rates May is legitimising behaviour by companies like Apple who form secretive tax arrangements with governments to escape paying their fair share.”

13:10: And now, as tradition dictates, the chancellor is awkwardly discussing periods.

 

13.05: Hammond has announced a series of high value investment and infrastructure plans, across housing, transport, digital sectors, and including specific investments for areas outside the southeast. He says that this investment will be the backbone of the government’s industrial strategy.

He is clearly acknowledging that the Conservative approach over the last six years has failed.

 

12.55: Hammond had a go at Ed Balls for his economic incontinence but, as Ed Miliband and many others point out, his proposals are extremely similar to the ones Labour put forward in 2015.

 

12.50: Hammond has confirmed that the Conservatives will not achieve a surplus by 2020, which was the justification for of Cameron and Osborne’s austerity policies. Instead, he has proposed three new ‘fiscal rules’.

They are:

1. Getting the budget in surplus as early as possible in the next parliament, and borrowing down to two per cent by the end of this parliament.

2. Ensuring net debt is falling by the end of this parliament.

3. Keeping welfare spending below a government cap.

Angela Rayner summarises all this quite well:

 

12.40: Philip Hammond is now on his feet. He’s opened on a positive note, praising the health of the British economy but warning that there is a turbulent period ahead.

He thanked George Osborne (with a joke at Boris Johnson’s expense) but said that change will be needed.

Economic forecasts on their way.

 

12.30: Elsewhere, Thomas Mair has been found guilty of the murder of Jo Cox MP. My colleague Adam Barnett will be reporting on this news.

 

12.15: At PMQs Jeremy Corbyn is hammering Theresa May on under-funding of the NHS and adult social care. She proudly defended her government’s absurd policy of passport checks in hospitals.

 

12.10: What we know so far

It’s standard practice for the government to trail certain announcements in the week before the statement (although some journalists suspect that this time Downing Street is hiding something).

Most of these have been tailored towards helping ‘just about managing’ families — or ‘jams’ as they’re now known.

So far, we know there will be a ban on letting agents fees, a 30p increase in the so-called living wage, a softening of universal credit cuts and a £1.4bn injection for housebuilding. We can also expect a lessening of fuel duty and air passenger duty.

Hammond will also unveil a chunk of infrastructure spending, particularly on roads.

And, perhaps most importantly, he will reveal the scale of the post-Brexit black hole in government finances.

This BBC video offers a decent summary, along with some charmingly corny backing music.

 

12.05 While we wait for the excitement (ahem) to start, here’s some of the pre-statement analysis we’ve featured on Left Foot Forward.

Dear Philip Hammond: Stop the cuts and back the NHS in Autumn Statement – Dave Prentis, UNISON general secretary

Five ways the Autumn Statement could cut inequality and help ‘the Jams’ – Wanda Wyporska, executive director of the Equality Trust

Austerity has failed – the Autumn Statement should (but won’t) reflect that – Prem Sikka, Professor of Accounting at Essex Business School

Autumn Statement: We can’t promise the earth then take steps to destroy it – Molly Scott Cato, Green Party economics spokesperson

Want to really help the ‘Jams’? Time for a Robin Hood Tax – David Hillman, Director of the Robin Hood Tax campaign

 

12.00: Prime Ministers Questions is kicking off now.

As soon as that wraps up, Philip Hammond will stand up to deliver his statement. It’s likely to take about an hour, after which shadow chancellor John McDonnell will respond.

George Osborne lived for these events: the dramatic briefcase photos, the agonising gags, the rabbits in hats and slaps on the back from his cabinet colleagues.

But Hammond is an altogether more sober sort, as this understated departure from Downing Street demonstrates.

 

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