Tory chancellor Jeremy Hunt used his Autumn Statement of public spending on Wednesday to claim he was helping ordinary people—while throwing billions at the bosses. Hunt said his main £9 billion handout to the corporations was the “largest business tax cut in modern British history”.
“It means we have not just the lowest headline corporation tax rate in the G7 but its most generous capital allowances,” he crowed.
He also unveiled 12 more “investment zones”—what he called mini Canary Wharfs. These are low tax, low regulation business areas to encourage profit-making.
At the same time, even the tame Office for Budget Responsibility (OBR) warned that average living standards are set to be 3.5 percent lower at the next election than they were at the last one. The OBR said this will represent “the largest reduction in real living standards since records began in the 1950s”
.And, because it’s an average, the increased hardship and poverty is going to be even greater for millions of workers and people on benefits.
Hunt laid out an election bribe of a cut in national insurance paid by workers. But that’s a small gesture compared to the real-term cuts most workers have suffered as inflation has soared above wages. And 19 million adults are unaffected because their income is less than the starting rate for national insurance payments.
In any case, all such concessions are funded by the enormous spending cuts from 2025 onwards.
By 2028, day-to-day spending in some departments will be 16 percent lower than now. The Institute for Fiscal Studies estimates that investment budgets face cuts of £13 billion for the same period, relative to plans Rishi Sunak himself put together as chancellor under Boris Johnson.
Pranesh Narayanan, a leading economic researcher, said, “These spending plans amount to a second round of Osborne-ite austerity. Austerity was the policy that set us on the track to economic stagnation in the 2010s.
“It was largely achieved by cutting public investment and holding down public sector pay. The results? Crumbling schools and record NHS waiting lists.”
Torsten Bell, chief executive of the Resolution Foundation, agreed. He said, “Today the chancellor used an inflation-driven surge in tax receipts to go early on pre-election giveaways —announcing the biggest package of tax cuts since 1988.
“But the truth is taxes are up not down. Today’s cuts are dwarfed by tax rises already underway. By the end of this decade taxes are set to be up by the equivalent of £4,300 per household compared to 2019.
“Worse, the giveaways announced today are funded by handing whoever wins the next election implausibly large spending cuts.”
For people on benefits there were only threats and bullying from Hunt in the Autumn Statement. He unveiled more severe benefit sanctions while announcing harsher measures for people on out-of-work disability benefits.
Hunt boasted of his plans to increase penalties which the government said last week would involve people losing access to free NHS prescriptions and legal aid.
In the “biggest welfare reform in a decade” he said claimants who do not find a job within 18 months will be forced to undergo “mandatory” work placements.
Those failing to comply with the rules face having their benefits cut off completely. He said, “If they choose not to engage with the work search process for six months we will close their case and stop their benefits.” Hunt thinks he can drive 200,000 people off benefits this way.
And changes to disability benefits are also a major assault. The Disability Benefits Consortium —a national coalition of more than 100 charities—described the plan as a “cynical attack on disability benefits which will have a devastating impact on those on the lowest incomes”.
Labour’s shadow chancellor Rachel Reeves criticised Hunt’s statement. But don’t hold your breath expecting Labour to reverse the measures for business or the attacks on the poor.Original post