McDonnell: Welfare cuts show autumn Statement fails test of help for low-earners

John McDonnell said today that planned cuts to universal credit show the Tories will fail his first “test” to provide support for people on middle and low incomes.

The shadow chancellor spoke out before Philip Hammond’s first mini-budget, this afternoon, which is expected to scale back – but not abandon – controversial cuts to the benefit, which will affect three million households.

Theresa May has promised an Autumn Statement for families who are “just managing” – the so-called jams – as she claims to deliver economic reforms that benefit working people. As she continues to unwind the policies of David Cameron and George Osborne, however, Hammond will lower the “taper rate” – the point at which benefits are withdrawn – from 65p to 63p in the pound.

Labour said people in low paid work would still be worse off and the Tory backtracking would not offset the negative impact on incomes of lower work allowances and other planned cuts to universal credit.

“It would appear that this Autumn Statement is set to fail our first test to provide actual support for those on low and middle incomes,” McDonnell said.

“If as reported, all the chancellor is offering is a two per cent change in the taper rate, then it will be too little, too late for those working families who have had to bear the brunt of six wasted years of failed Tory economic policies.

“Despite all their rhetoric last month, and before the ink is even dry on the Autumn Statement, it looks like it will be jam tomorrow for working people under Theresa May and Philip Hammond.”

Universal credit has been mired in problems since it was dreamed up by Iain Duncan Smith, the former Work and Pensions Secretary, during the last parliament. It has been subject to enormous delays in its roll-out although Labour has not pledged to scrap its introduction.

Hammond, recently moved from the role of foreign secretary, is also expected to announce a ban on upfront fees imposed by letting agents in England, as well as delivering an increase in the national living wage.