A hike in the Living Wage—and changes to Universal Creditby / November 23, 2016 / Leave a comment
There will be a hike in the Living Wage, Philip Hammond will announce today. A reduction in the Universal Credit “taper rate” is also expected.
In his first Autumn Statement since becoming Chancellor—and the first since Theresa May pledged to help the “just about managing,” Hammond will announce an increase in the National Living Wage to £7.50 an hour in April 2017. It is currently £7.20. In addition, £4.3 million will be spent on enforcing the minimum wage.
Hammond will also announce a drop in the UC taper rate from 65 per cent to 63 per cent. This means that for every pound workers earn over the “Work allowance,” they will keep 37 pence rather than 35. Three million households will benefit, but the main cuts to UC announced in 2015 will still go ahead.
An extra £1.4bn will be spent on delivering 40,000 affordable homes, as part of a housing package that will see existing funding for affordable housing made more flexible. Letting agents’ fees are to be banned.
Hammond is also expected to earmark billions for research and development, with a view to creating higher wage, higher skilled jobs.
These measures will feature alongside those announced last week. It has been reported that there will be a fuel duty freeze and investment in infrastructure. £1.3bn will be spent on improving Britain’s roads, while a further £1bn will be spent on spreading “gold standard,” hyper-fast broadband across the country.
The Office for Budget Responsibility, the government’s fiscal watchdog, will share its latest forecasts for UK growth, unemployment and inflation today. The forecast will run up to 2021, so will cover two years in which Britain will be out of the European Union.
Hammond’s Universal Credit announcement comes after months of lobbying from Conservative backbenchers—notably Iain Duncan Smith, who introduced the scheme. Duncan Smith made the case against cuts to UC in Prospect earlier this month.
However Hammond’s statement is received, he will draw comfort from the fact he is overwhelmingly more popular than his political opponents. On Tuesday, an ICM/Guardian poll showed that, when asked who is best-placed to manage Britain’s economy, 48 per cent of respondents pick May and Hammond, while only 15 per cent pick Jeremy Corbyn and John McDonnell.