Autumn Statement 2016 – Cash back for three million workers as Chancellor reverses cuts to benefits
CASH strapped workers are to receive hundreds of pounds back each as part of a £1billion move to reverse cuts to benefits made by former Chancellor George Osborne.
New Chancellor Philip Hammond used his first budget statement today to announce the reversal of Osborne's £3.4billion axe to Universal Credit.
In a move long fought for by campaigners and revealed by The Sun yesterday, around three million working households will see cash gains from the Universal Credit U-turn.
It is being done by lowering the all-encompassing new benefit’s taper from 65 per cent to 63 per cent, meaning claimants will be able to keep 2p more in every pound they earn.
Treasury officials say a couple with two children where one parent earns £30,000 a year would benefit by £425, and a single parent with one child and no housing costs earning £15,000 a year will get £170 back.
The Chancellor said during his speech today that the U-turn was an effort to "increase the incentive to work and progression in work".
Former Work and Pensions Secretary Iain Duncan-Smith, who lead fight against the cuts after resigning from the Cabinet over them in March, welcomed the move.
The former Tory leader told The Sun: “Putting money back into Universal Credit is a very welcome U-turn, and I’m very pleased Theresa and Philip have listened to us.
“It is a very good start to make work pay again. In future I hope we have a chance to go further and put the money back into it.”
Another Tory MP who was prepared to rebel against the cuts, Heidi Allen, added: “I’m absolutely delighted, it’s a small step but I know it’s an expensive step”.
During his speech, Philip Hammond said there would be "no further welfare savings measures in this parliament" beyond those already announced.
However he said welfare must be within a cap, set by the Government and monitored by the Office for Budget Responsibility (OBR).
The Chancellor will also use his first Autumn Statement mini-budget to ban rip-off fees slapped on rental properties, share out £1.4billion to make it cheaper to rent, raise the National Living Wage by 30p an hour, freeze fuel duty by scrapping a planned 2p-a-litre rise and invest £5billion in infrastructure to boost Brexit Britain.
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He may also listen to calls to scrap the controversial Minimum Excise Tax on tobacco which sets a minimum rate of tax on fags and means cheaper brands have to hike their prices, but premium brand cigarettes unaffected.
Boozers are also waiting with bated breath to see if the Chancellor will freeze the alcohol duty again.
The announcements form part of a statement expected to be dominated by the costs of Brexit, with reports suggesting that the hit to public coffers from withdrawal from the EU could reach £100 billion over five years.
Last night 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.
Key points from the Autumn Statement
Here are the Chancellor's proposed changes
National Living Wage increase
National Living Wage rises by 30p an hour giving £500 more a year to lowest paid Brits
Rip-off rental fees banned
Share prices of estate agents crashed this morning ahead of Philip Hammond's crack-down on fees
£3.5bn housing investment
Government to inject £1.4bn into affordable housing and another £2.3bn into areas of 'high demand'
U-turn on cuts to Universal Credits
Cash back for three million workers as Chancellor reverses cuts to benefits
Fuel duty frozen for another two years
The Chancellor won't implement the planned 2p-per-litre rise
£1.1bn investment into super-fast internet
The money will fund 5G mobile networks and extension of fibre-optic broadband networks
Income tax-free personal allowance to rise
The tax-free personal allowance will rise £1,500 to £12,500
New NS&I savings bond announced
NS&I to launch new savings bond with a rate of 2.2%from Spring next year
Insurance premiums to increase
Insurance premiums to go up after Chancellor announces two per cent hike in tax
Now Mr Hammond is easing the pain by reducing the rate at which benefits are withdrawn from 65 per cent to 63 per cent, meaning that workers will lose 63p, rather than 65p, of their welfare for every pound they earn above their work allowance.
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.
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