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Autumn Statement: No reprieve for the 'just-about managing' - or the 'not managing'
Paul Callanan, London Socialist Party
New Chancellor of the Exchequer Philip Hammond went into his Autumn Statement claiming that the Tories are building an "economy that works for everyone". What the statement actually did was demonstrate the utter failure of the last six years of Tory government even on its own terms.
As socialists have been saying all along, austerity isn't working for the economy. The Office for Budget Responsibility (OBR) has forecast growth to be down to 1.4% in 2017, lower than the 2.2% it forecasted in March.
Working class people have faced six years now of Tory austerity. Wages are still lower than they were in 2008 and six million workers are paid less than the living wage. While we have seen a shift in rhetoric since the coronation of Theresa May as prime minister there was nothing to be cheerful about for working class people in this statement.
Philip Hammond said that the statement would be one for JAMs - families who are Just About Managing. Yet all that was offered was window dressing, attempting (and failing) to cover the fact that the Tories are sticking to the same pro-big business policies of the last six years. None of the measures outlined will lead to any great improvement in the living standards of working class people.
The announced £23 billion national productivity investment fund is designed to address the huge crisis of productivity that British capitalism is experiencing. Over the next five years it will make money available for infrastructure projects, housing and science in an attempt to secure increased investment for UK businesses. But the OBR predicts that reduced trade as a result of Brexit and the looming possibility of a new world economic downturn mean that productivity in the UK economy will remain low.
The statement revealed an increase in borrowing of £122 billion over the next five years, with the OBR forecasting further shocks to the economy as a result of the Brexit negotiations.
Labour shadow chancellor John McDonnell called on Hammond to reveal what the government's negotiating position would be, which Hammond refused to do. But McDonnell was wrong to call for a commitment to "full, tariff-free access to the single market" if by that he means acceptance of its neoliberal rules. Any continuation of the 'race to the bottom', the opening up of services to market competition and the prevention of public ownership, must be opposed.
Embarrassingly for the Tories they have been forced to abandon their target for wiping out the deficit. Hammond is now saying that the government will not be able to bring the government accounts back into surplus until the next parliament, reneging on its target of wiping it out in this parliament. Government debt is spiralling towards £2 trillion. This leaves in tatters the much trumpeted "long-term economic plan" that the Tories fought the 2015 general election on.
The statement included a commitment to ban estate agent fees being charged by landlords to renters; and £1.4 billion invested to build 40,000 new "affordable" (ie 80% of market rent) homes. There are no plans to increase the number of council houses being built. In fact in spite of the government dropping 'pay to stay' from the 2016 Housing Act most of it still remains in place. This includes among other measures plans to force councils to sell off vacant high-end properties, meaning a loss of up to 200,000 council homes.
- Any serious attempt to deal with the housing crisis would include a mass programme of council house building. We also call for rent controls to stop landlords ripping off tenants.
The announcement of a meagre rise in the National Living Wage of 30p an hour to £7.50 will go virtually nowhere to dealing with stagnant and falling wages. Rising food costs, utility bills and sky rocketing rents mean that this increase will quickly be wiped out. And it leaves the government way off target for hitting a living wage of £9 an hour by 2020.
- We call for an immediate increase in the minimum wage to £10 per hour.
- Alongside this we also call for the banning of zero hours contacts to lift nearly a million workers out of poverty and insecurity.
In spite of the Tories' new rhetorical concern for the working poor and 'those left behind' it's clear that the worst off in our society are still in the cross-hairs. The government still plans to carry on rolling out Universal Credit, meaning huge cuts to benefits - the only concession being a 2p increase in how it tapers for part-time workers.
The overall benefit cap remains firmly in place. Alongside this the government also handed an £8.5 billion tax giveaway to big business. If it wasn't already obvious then this should clear up any doubts about whose interests the government serves.
The government and the ruling class have no answers to the current crisis gripping the economy. All they do know is that it is working class people that must continue to pay the price for it.
Events following the EU referendum, the election of Donald Trump in America and growing political polarisation more generally will not only add to the economic uncertainty but also show that working class people are not prepared to take more of the same. It is urgent that the inability of capitalism to deliver the goods for the 99% is answered with a socialist programme that can arm working class people with the ideas and steps necessary to bring down this hated Tory government and change society.
Iain Dalton, Yorkshire Socialist Party, adds:
Philip Hammond's announcement that he is to abolish the Autumn Statement summed up its 'smoke and mirrors' nature, with the Budget being moved from spring to the autumn and a new 'spring statement' introduced from 2018.
For working class people, the statement offered relatively little with a few measures to try to show the Tories care, but the real weight of austerity still rests firmly on our backs.
'Pay to stay' measures for workers in council homes who earn over £31,000 a year (or £40,000 in London) will be scrapped. Yet the overall benefit cap is to remain, along with the cuts to benefits that will be faced by those moving onto universal credit, with only the tiny concession of 2p on how it tapers for part-time workers.
Likewise, the announcement of scrapping letting fees, which include charges for credit checks, admin fees and others, will be welcome to those facing paying huge sums of money before moving house, particularly those who face moving on an almost annual basis in the private rented sector. Yet the fundamental issue remains that rents are a huge drain on incomes, especially in London.
However, with no plans to fund building more council houses, tenants are to be held to ransom in the private sector (with increased costs to the housing benefit bill as well). More money for alleged 'affordable housing' will hardly alleviate this when affordable housing counts as renting or buying at just 20% less than the market rate. In the 1980s the average price for first time buyers was £30,000, now it is five times that!
Similarly, the National Living Wage being increased by 4% to £7.50 in April is 10p an hour below what would be needed to stay on track for the Tories' pledge of £9 an hour by 2020 - let alone the demand of the TUC for £10 an hour.
Clearly this only stretches so far when rents and utilities suck out the bulk of many workers' incomes. Rising food prices will squeeze this further. The 'reviewing the efficiency' of retail energy markets will do little to deal with soaring energy prices as the vast profits of the 'Big 6' go unchecked, exceeding £3 billion for the first time last year!