Three things to bear in mind when watching Osborne today

Why everyone’s pretty much making it up.

1. Most of today’s cuts were decided three years ago In his statement today, the Chancellor needs to find cuts in most unprotected departments of around 8-9 per cent. That number flows mainly from three things: the pace of deficit reduction; the decision to protect health, schools, international development and pensioners; and forecasts for so-called Annually Managed Expenditure (AME). All three are either old news or else significantly beyond Osborne’s direct control. That’s not to say that today’s decisions don’t matter. Some departments will get more or less than 8-9 per cent—if briefings are right, local government will lose 10 per cent, meaning fewer cuts elsewhere. But these are relatively small movements around a big number that flows from existing plans.

2. Today’s cuts will hurt but things are set to get tougher The Chancellor will be pleased at the lack of blood on Whitehall carpets today. Tough settlements have been reached and coalition relationships have held up well. Even with no extra benefit cuts being announced in his statement, Osborne has also succeeded in baking in a tough settlement on welfare.

Yet the cuts needed to finish the job in 2016-17 and 2017-18 will mean much tougher battles. This is partly a question of scale. The Chancellor needs a further £13bn in both 2016-17 and 2017-18 on top of today’s cuts in order to meet his deficit targets. Without further tax rises or welfare cuts, that means speeding up departmental cuts by around 50 per cent after the election. Even keeping departmental cuts to their current pace would require £10bn of further tax rises or welfare cuts. But the battles will also get tougher for the simple reason that every fresh pound of cuts will be harder than the last. As things stand, 2016-17 and 2017-18 could leave departments like Defence and the Home Office a third smaller than they were in 2010. The last mile will be the hardest.

3. Everyone’s pretty much making it up Having said all of this, the most important thing today is to treat everything you hear with a big dose of scepticism. The level of uncertainty surrounding the Chancellor’s strategy is enormous. This is because the main figure guiding the cuts is the pledge to eliminate the structural deficit, the part of the deficit that won’t go away when the economy’s running at full capacity. Needless to say, that’s an incredibly hard thing to know. Far from being an academic point, these estimates about the size of the so-called ‘output gap’ change everything. Last year, two plausible estimates suggested that the Chancellor either needed to make £22bn of extra cuts by 2017-18 or else needed to make £35bn fewer cuts than planned. That’s a difference of £57bn. Bear it in mind when you hear confident statements today for or against £11.5bn of new cuts.

George Osborne during a visit to a branch of Lloyds TSB bank on June 19, 2013 in London. Photograph: Getty Images.

James Plunkett is director of policy and development at the Resolution Foundation

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Grenfell survivors were promised no rent rises – so why have the authorities gone quiet?

The council now says it’s up to the government to match rent and services levels.

In the aftermath of the Grenfell disaster, the government made a pledge that survivors would be rehoused permanently on the same rent they were paying previously.

For families who were left with nothing after the fire, knowing that no one would be financially worse off after being rehoused would have provided a glimmer of hope for a stable future.

And this is a commitment that we’ve heard time and again. Just last week, the Department for Communities and Local Government (DCLG) reaffirmed in a statement, that the former tenants “will pay no more in rent and service charges for their permanent social housing than they were paying before”.

But less than six weeks since the tragedy struck, Kensington and Chelsea Council has made it perfectly clear that responsibility for honouring this lies solely with DCLG.

When it recently published its proposed policy for allocating permanent housing to survivors, the council washed its hands of the promise, saying that it’s up to the government to match rent and services levels:

“These commitments fall within the remit of the Government rather than the Council... It is anticipated that the Department for Communities and Local Government will make a public statement about commitments that fall within its remit, and provide details of the period of time over which any such commitments will apply.”

And the final version of the policy waters down the promise even further by downplaying the government’s promise to match rents on a permanent basis, while still making clear it’s nothing to do with the council:

It is anticipated that DCLG will make a public statement about its commitment to meeting the rent and/or service charge liabilities of households rehoused under this policy, including details of the period of time over which any such commitment will apply. Therefore, such commitments fall outside the remit of this policy.”

It seems Kensington and Chelsea council intends to do nothing itself to alter the rents of long-term homes on which survivors will soon be able to bid.

But if the council won’t take responsibility, how much power does central government actually have to do this? Beyond a statement of intent, it has said very little on how it can or will intervene. This could leave Grenfell survivors without any reassurance that they won’t be worse off than they were before the fire.

As the survivors begin to bid for permanent homes, it is vital they are aware of any financial commitments they are making – or families could find themselves signing up to permanent tenancies without knowing if they will be able to afford them after the 12 months they get rent free.

Strangely, the council’s public Q&A to residents on rehousing is more optimistic. It says that the government has confirmed that rents and service charges will be no greater than residents were paying at Grenfell Walk – but is still silent on the ambiguity as to how this will be achieved.

Urgent clarification is needed from the government on how it plans to make good on its promise to protect the people of Grenfell Tower from financial hardship and further heartache down the line.

Kate Webb is head of policy at the housing charity Shelter. Follow her @KateBWebb.