The “just about managing” will have to continue just about managing, with less money, after the feeble set of giveaways in Philip Hammond’s first – and last – autumn statement.
The chancellor is deviating little from the austerity path set by his predecessor, George Osborne. For most families, the bigger picture of Brexit, and what subsequently happens to jobs, interest rates and economic growth, will far outweigh any tinkering by the Treasury.
Many were left wondering why government advisers focused so heavily on the Jams prior to the statement and then spread the giveaways so thinly.
Yes, there is some softening of cuts to tax credits, now under the umbrella of universal credit. The taper rate – the amount of credit withdrawn as recipients earn more – will fall from 65p to 63p per pound earned over the work allowance. In real terms, it means someone receiving the “national living wage” will gain about £250, while a family earning £30,000 a year will be £500 better off.
However, as the Resolution Foundation thinktank said, these gains were more than outweighed by cuts to the work allowance, which is the amount you can earn before your benefits are tapered away.
The households affected by this will be hit the most by rising food prices, which have a disproportionate impact on poorer Britons. The former Sainsbury’s chief executive Justin King is forecasting an increase of 5% in the coming year, which will wipe out the gains that low-income workers will make from the rise in the national living wage to £7.50 an hour.
Other unavoidable bills are also marching upwards. The 2% rise in insurance premium tax will add £10.70 to the average bill for cars, and up to £10 to buildings and contents insurance.
Before the autumn statement on Wednesday, it was clear that car insurance rates were already rising sharply, up by 16% over the past year. Even taking into account the shake-up on whiplash, which will cut bills by £40, and the latest freeze in fuel duty, motorists will probably be net losers.
Then there are the scary forecasts of increases in gas and electricity bills of at least 5%, but up to 26% on some tariffs. Household budgets will remain under intense pressure throughout 2017 and beyond.
But the ban on letting agency fees should not be anything other than thoroughly welcomed, irrespective of the predictable bleating from England’s estate agents. What we know is that in Scotland, where the ban has been in place for four years, agents are not in dire straits.
Hammond also promised another £1.4bn for affordable housing to help build an additional 40,000 homes. Combined with a plethora of schemes, he pledged to “more than double, in real terms, annual capital spending on housing”.
Housing is the central financial worry of the millennial generation, so this is to be welcomed. But whether an uptick in supply will have any real impact on making homes more affordable is another matter.
In one area, Hammond was curiously quiet. Pensioners, the bedrock of Conservative support, were barely mentioned, despite the fact that the state pension is a giant component of public spending. The triple lock, which guarantees rises in the state pension of whatever is higher out of the rate of inflation, average earnings or 2.5%, will be maintained, he said.
But in his next sentence, Hammond warned of the challenges of “rising longevity” and future spending priorities.
Not only was this the last autumn statement, we have probably also seen the last in which giveaways to pensioners are at the heart of the chancellor’s speech.