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TAX cuts for business while squeezing the most vulnerable are at the heart of the Tory re-election strategy, Chancellor Jeremy Hunt’s Autumn Statement revealed today.
The Chancellor focused on placating angry Conservative activists but offered little to millions struggling with the cost-of-living crisis in slow-growth Britain.
He took particularly aim at benefit claimants suffering sickness or disability with draconian measures designed to force them off welfare if they do not accept jobs that may be either unsuitable or non-existent.
Mr Hunt said that if, after seeking a job for 18 months, a claimant has still not found work they will have to take part in a compulsory work placement and if they “choose not to engage with the work search process for six months, we will close their case and stop their benefits.”
Clearly showing the class nature of his calculations, Mr Hunt boasted that he was ordering “the biggest business tax cut in modern British history” by making permanent a 25 per cent tax deduction for companies that invest in plant and equipment.
In other business-ordered moves, he extended tax relief on firms in special freeports or investment zones, which are themselves to be increased in number.
Desperate to revive the Tories’ bleak electoral prospects, the Chancellor surprised MPs by ordering a 2 per cent cut in employee National Insurance payments, to 10 per cent, which will save the average employee around £450 a year.
Nevertheless, the overall tax take in the British economy is still heading towards a post-war high of 37.7 per cent of GDP, according to the Office for Budget responsibility (OBR).
Mr Hunt reaffirmed the pensions triple lock, under which pensions rise by whichever is highest of inflation, the rise in earnings or 2 per cent.
This unusual protection reflects the fact that older people are virtually the only demographic still showing majority support for the Tories.
Mr Hunt claimed the government was delivering on reducing inflation, cutting debt and stimulating economic growth, three of Prime Minister Rishi Sunak’s five pledges.
However, figures released by the OBR sharply downgraded projected economic growth ahead, with expected growth in 2024 cut from 1.8 per cent to 0.7 per cent while 2025 will slump from 2.5 per cent to 1.4 per cent.
Growth “has hit a dead end under the Tories,” shadow chancellor Rachel Reeves argued, with 177 countries across the world expected to grow faster than Britain over the next few years.
“Working people are still worse off,” after 13 years of Tory government, she added.
Mr Hunt raised benefits in line with inflation, benefiting politically from staged speculation that he might order a real-terms cut. The move will raise no-one out of poverty, however.
Public and Commercial Services union general secretary Mark Serwotka said: “The punitive consequences of his Autumn Statement will fall heavily on some of the most vulnerable members of society.
“They’ll also fall on the shoulders of our members working at the DWP who will be expected to implement the further ramping up of the sanctions regime, forcing people with ill health and disabilities to undertake work placements. Sanctions don’t work.”
TUC general secretary Paul Nowak said: “This is not a plan for rebuilding Britain. It’s a plan for levelling the country down.
“At a time when our schools and hospitals are crumbling, the Chancellor has confirmed another round of punishing and undeliverable spending cuts to public services and investment.
“Be in no doubt — if the Tories win the next election, even more austerity is on the way.
“Cutting National Insurance won’t make up for 13 continued years of economic failure on wages and living standards.”
National Education Union (NEU) general secretary Daniel Kebede said the statement did nothing to repair the damage caused to public services, including schools, by 13 years of cuts.
“The government will pay a heavy political price for continuing to ignore the problems it has created,” he said.
Unison general secretary Christina McAnea said: “The Chancellor is simply giving back what he and his inept predecessors have already snatched from working people. No-one will be fooled. They will still be worse off.”
The Chancellor also pledged a fresh £7 million to combat anti-semitism, through grants to the Holocaust Education Trust and other bodies.
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