Help for workers and affordable housing at heart of Philip Hammond's statement


Measures to help low-paid workers and invest in affordable housing will be at the heart of Philip Hammond's first Autumn Statement as Chancellor.

Mr Hammond will announce a 4% rise in the minimum wage for over-25s - known by ministers as the National Living Wage - to £7.50 an hour from April 2017.

And he will help an estimated three million families with changes to the "taper rate" for Universal Credit, which will allow low-paid workers to keep an additional 2p of every extra pound they earn.

Meanwhile, a £1.4 billion injection into affordable housing will help build an estimated 40,000 new homes, while Mr Hammond will introduce a ban on letting agency fees to stop 4.3 million families in private rentals being hit by upfront charges running into hundreds of pounds.

The announcements form part of a statement expected to be dominated by the costs of Brexit, with reports suggesting that the hit to public finances from withdrawal from the EU could reach £100 billion over five years.

Mr Hammond got an eve-of-statement boost as official figures showed the Government had borrowed a less-than-expected £4.8 billion last month.

But he has little room for manoeuvre in his efforts to help those families who are "just about managing" - known in Whitehall as the "Jams" - who Prime Minister Theresa May has identified as her main priority for support.

The Treasury said Mr Hammond's package was designed to "improve the living standards of ordinary working class people and their families", in line with the ambitions set out by Mrs May in her keynote speech to the Conservative conference last month.

But the Universal Credit reform is unlikely to appease critics who have been calling on the Government to reverse changes introduced by the Chancellor's predecessor George Osborne, which will drastically reduce the amount workers can earn before losing benefits.

Mr Osborne cut the "work allowance" threshold at which Universal Credit begins to be withdrawn from £222 per month for a couple with children and £263 for a single parent to £192, as part of a package designed to save £3 billion in welfare payments.

Now Mr Hammond is easing the pain by reducing the rate at which benefits are withdrawn from 65% to 63%, meaning that workers will lose 63p, rather than 65p, of their welfare for every pound they earn above their work allowance.

The first annual increase in the National Living Wage, which was introduced in April at £7.20 an hour for workers aged 25 and over, brings it closer to the Government's 2020 target of £9 an hour, but leaves it well below the independently-calculated Living Wage of £8.45 across the UK and £9.75 in London.

An additional £4.3 million a year will be committed to enforcing the payment of statutory minimum wage levels.

The Chancellor is expected to say that providing economic stability, restoring the public finances and boosting productivity are the single best methods to improve living standards, which last year grew at their fastest rate in 14 years.

But he will also offer a range of measures to help family finances go further, including:

:: The ban on letting agency fees, which cost householders an average £337, according to Citizens Advice;

:: A crackdown on whiplash claims, designed to allow insurers to reduce premiums by £40 a year;

:: Relaxation of restrictions on schemes like affordable rent, shared ownership and rent-to-buy, to help people in different housing circumstances, including renters struggling to save for a deposit.

Mr Hammond will also confirm previously-announced investments of £1.3 billion on roads and £1 billion on broadband and digital infrastructure, as well as committing billions more to research and development projects designed to support high-skill jobs.

For Labour, shadow chancellor John McDonnell said Mr Hammond had failed to provide support for people on low and middle incomes.

"If as reported, all the Chancellor is offering is a 2% change in the taper rate, then it will be too little, too late for those working families who have had to bear the brunt of six wasted years of failed Tory economic policies," he said.

"Despite all their rhetoric last month, and before the ink is even dry on the Autumn Statement, it looks like it will be jam tomorrow for working people under Theresa May and Philip Hammond."