George Osborne’s Autumn Statement committed the government, over the next six years, to major investment in roads (at a cost of £15 billion), rail (£6 billion), flood defences (£2.3 billion) and science (£7 billion). The NHS will also see investment, while tax ‘giveaways’ included reform of stamp duty and an increase in the threshold for paying income tax.
At the same time, the Chancellor announced plans to freeze Universal Credit work allowances for a further year, cut tax credits when overpayments are certain, and stop unemployment benefits for migrants with ‘no prospect of work’. He also signalled his intention to freeze benefits for people of working age for two years (saving £3 billion). These benefit reforms come on top of radical welfare cuts and caps in recent years.
While investment in infrastructure can help to increase employment, the problem with the UK recovery is not so much the level of employment but the level of wages on offer. Working people are now on average £1,600 a year worse off since the last election because wages have lagged behind prices. Wages have, this year, just about caught up with inflation, but millions of British households are heavily indebted, and, with interest rates likely to increase in the coming year or two, life could get even tougher than it is now for many.
And for those out of work, poverty will deepen further as benefits are continually cut. Research shows that single people of working age on means-tested benefits receive only 39% of what they needed in 2014 to reach a minimum income standard, as defined by members of the general public. Lone parents and couples with children receive only 57%.
The Autumn Statement will do little to help the 13 million people currently in poverty, half of whom are in employment. The various cuts to benefits announced in the Autumn Statement will, if anything, make their lives even more difficult. With Christmas approaching, we may see shorter queues at the Jobcentre, but queues at the food bank are likely to lengthen. Homelessness will also increase. For those still able to keep a roof over their heads, increasing fuel poverty may make this a very cold winter indeed.
Karen Rowlingson is Professor of Social Policy at University of Birmingham. A version of this article also appears on The Conversation.