The UK Chancellor has reportedly abandoned plans to hit Universal Credit claimants hard with cuts, expected to announce that both pensions and benefits will increase in today's Autumn Statement. However, Jeremy Hunt is expected to set out brutal spending plans which will starve public services of vital cash, in order to also announce cuts on taxation.
The Tory cabinet hope that a tax-slashing bonanza will revive poor poll ratings after claims the Government have raised taxes more in the last four years than any other in UK history. To help pave the way for the giveaways, Mr Hunt has threatened to punish families on Universal Credit by failing to increase benefits as normal.
Rates are set to rise by 6.7 per cent as of April, in line with Septembers level of inflation. But to free up cash, the Chancellor was reportedly considering using the lower inflation figure from October - which only sat at 4.6 per cent - which would have meant low income families would have lost hundreds of pounds each year.
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The Mirror reports that the Mr Hunt is now thought to have dropped this plan, as well as ditching the idea of fiddling with the pensions triple lock. The full State Pension for men born after April 1951 and women born after April 1953 currently sits at £203.85 per week - but an 8.5 per cent increase as of April in line with wages will see these rise to £221.17 per week.
The Chancellor had previously considered tweaking the system to lower this through one-off NHS bonuses, but the money-saving squeeze has been scrapped after warnings that this would leave pensioners collectively £760million worse off. Mr Hunt is expected to confirm changes to work capability assessments today, with an overhaul from 2025 onwards seeing fewer people entitled to sick and disability benefits.
The change will not impact existing claimants. Earlier this week, Jeremy Hunt, said: "After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track… Our plan for the British economy is working, but the work is not done."
It comes after the Government announced Monday (November 20) that almost three million workers will see wages rise through the National Living Wage and National Minimum Wage. As of April 2024, the National Living Wage will rise to £11.44 per hour, while the National Minimum Wage will also increase.
Those between the ages of 18 and 20 will see minimum pay increase to £8.60 per hour, a hike of £1.11. Chief Secretary to the Treasury, Laura Trott, earlier this week let it slip that cuts to personal taxes will form part of today's Autumn Statement. However, Paul Johnson, who is the director of the Institute for Fiscal Studies, said that Mr Hunt will only be able to afford cuts should he plan to restrict Government department budgets.
The leading economist, explained: "If he does say he's got room, it's only because he's claiming to have some incredibly tight spending plans for the whole of the next parliament, essentially cutting public service spending in quite a lot of areas."
Speaking on the state of the economy at present, Labour Shadow Chancellor, Rachel Reeves, said: "After thirteen years of economic failure under the Conservatives, working people are worse off. Prices are still rising in the shops, energy bills are up and mortgage payments are higher after the Conservatives crashed the economy.
"The 25 Tory tax rises since 2019 are the clearest sign of economic failure, with households paying £4,000 more in tax each year than they did in 2010. The Conservatives have become the party of high tax because they are the party of low growth.
"Nothing the Chancellor says or does in his Autumn Statement can change their appalling record."
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