Autumn Statement: will it help the 'just-about managing'?
This was billed as an Autumn Statement which would reach out to those on low and medium earnings who are just-about managing (known in Westminster as JAMs), and offer them a real boost to their household budgets. Philip Hammond made much of the announcements he said would help this group: the question is whether it will actually improve life in any significant way.
See also: Autumn Statement Winners and Losers
See also: Autumn Statement 2016: what it means for you
See also: Fuel duty freeze 'to save average driver £130 a year'
Perhaps the best news in this Statement was the absence of any really bad news, as Hammond announced there would be no more cuts to welfare during this parliament (beyond those already announced). This perhaps reflects the fact that even George Osborne was having enormous difficulty getting cuts through parliament as MPs and Peers became increasingly concerned at how the most vulnerable were facing the pain of cuts.
Hammond also confirmed that the government would be sticking to its plans to increase the personal tax allowance to £12,500 by the end of the parliament - so people could earn more before paying any tax at all. Again, this wasn't an announcement of anything new, but a welcome relief that the black hole in the government's finances hadn't ruled out these rises.
There was some talk before the speech about possible changes to Universal Credit, and the softening of cuts for people in work. As a result, the announcement we received was a bit of a damp squib, as Hammond simply announced that the taper rate (at which people lose their benefits as they earn more) will be cut from a proposed 65% to 63%.
Karen Barrett, CEO of Unbiased, pointed out: "Overall the Chancellor has made his main focus the JAMs, but with a freeze on major benefits still in effect until 2020, and higher inflation due to the weakened pound driving up the cost of living, many people in this situation are already considerably worse off than they were six months ago."
Research from Policy in Practice puts the loss to 'just about managing' families from welfare cuts at £48.38 a week by 2020.
The National Minimum Wage
Many commentators were expecting much more than the increase from £7.20 to £7.50 - which was already on the cards for a gradual shift to £9 by 2020, so there has been some disappointment. Hannah Maundrell, Editor in Chief of comparison site money.co.uk, said: "Increasing the minimum living wage to £7.50 is a helping hand that'll give full time workers a pay rise of around £600 a year, but it's still not quite enough to afford a decent standard of living. To really help struggling households £8.50 an hour would be nearer the mark instead."
Maundrell also points out that while the minimum wage rises, public sector pay remains constrained. She said: "I'd imagine public sector workers are likely to be peeved at this increase as the 4% pay rise dwarfs the 1% cap being forced upon them for the next few years."
One potential positive was the Hammond pledged to look at the energy market to ensure people weren't being taken advantage of. However, any potential action in bringing down the cost of energy is a long way off.
Insurance premium tax
The hike in insurance premium tax from 10% to 12% doesn't sound like much on the face of it, but when renewal quotes come through, the rising prices will start to hurt. Keith Richards – Chartered Insurance Institute Managing Director, says: "At a time when we are observing under-provision of insurance in many parts of society, effectively doubling insurance premium tax between Nov 2015 and June 2017 will have the effect of disproportionately increasing the cost of protection and further dissuading many people from managing the risks they face."
Hammond said fuel duty would be frozen for the seventh year in a row - amounting to a total saving of £130 a year for a car driver. Of course the problem here is that this isn't a cut - it's the absence of a rise. It won't make people any better off.
Hammond announced plans to ban letting agents from charging fees to tenants. It's expected to save around 4.3 million renters over £300 in fees. Of course the risk is that they charge landlords the fees instead, who pass the cost on to renters through higher rents.
Possibly the real difference this Statement may make to people is if the plans to make housing more affordable through long term investment in infrastructure come to fruition. Certainly they seem like steps in the right direction, but by their very nature these are long-term plans
As Maundrell says: "Aptly enough, given the Chancellor's focus on the JAMs, this Autumn Statement was very much a 'jam tomorrow' announcement: not much to cheer about at present, but encouraging signs for the future. The housing initiatives are undoubtedly the most significant: the high cost of finding a home of any kind is arguably the single biggest financial problem for Britons today. If the Government can start to solve that, then many other problems may start to take care of themselves."