Listening to Philip Hammond is like being on the worst kind of awkward first date. Even as he says all the right things, there’s something just not quite right. And then, a slip: a strange choice of phrase, and odd word, gives him away.
So for every acknowledgement that life can be tough in Britain – that affordable housing is scarce, that wages are stagnating, that bills are rising and childcare is a noose around the neck of working families – there’s that word: productivity.
Hammond hands out goodies for the “just about managing” families like sweeties, though (most of them having been preannounced) the selection box is past its sell-by date. The rise in the tax free personal allowance, the 30 hours of free childcare from next September, a higher national living wage, new investment in housing and a ban on letting agents charging tenants exorbitant fees. It all sounds great, until you look at the detail.
For though government is ploughing money into new housing, it’s doing so while handing out money to already well-off young homeowners through a Help to Buy savings scheme that only helps the already flourishing and while pushing forward the right-to-buy for housing association tenants, shedding our scarce social housing into the expensive private sector.
If you take more people of out of income tax and give them a pay rise, and call the halt to benefit cuts, but then fail to achieve the tax revenues you’re expecting because of the rising rate of incorporation and self-employment – the result of more people unable to find a secure job and stuck in zero hours, piecemeal work in what has become known as the “gig economy” – is that progress for hard-up families?
Ask these households what really want and they’ll tell you they want certainty: a stable and predictable rent charged for a family home they’re not expected to move from every year; regular work that allows them to cover that rent; a fair rate of pay even for those stuck in a cycle of self-employment because the formal labour market no longer wants them.
This Autumn Statement does not give them that security, because Philip Hammond sees everything through the lens of productivity, not society. He invests in housing because, after decades of under-funding, it’s finally impacting on jobs and growth – he does so in a way that boosts the economy yet makes little difference for those stuck in the poorest quality or least affordable housing. He gives low-paid workers a pay rise, but then he allows the gig economy to flourish unchecked, rapidly eroding terms and conditions and creating a new class of precariat workers – all the while, of course, boosting growth. Working from the economics backwards isn’t going to solve this feast of social problems.
Of course Hammond is right to raise the productivity puzzle: why is it that we’ve dropped not only below Germany and the US, but also the rather more casual France and Italy, in the productivity stakes? We are working longer hours to achieve less.
That’s what happens when the security net vanishes. Years of austerity have eroded the economic confidence not just of businesses but the people they depend upon – workers. Nothing Hammond announced today is going to solve that quite yet.Reuse content