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What welfare changes did Philip Hammond make in his Budget 2017?

The Chancellor offered nothing new to help ease the Tory squeeze on benefits.

You could be forgiven for believing this Chancellor is more sympathetic towards benefit claimants than his predecessor. While George Osborne used arbitrary cuts to the welfare budget as an ideological weapon against the state, hitting the most vulnerable, the current government has changed the rhetoric about those who have the least.

Who could forget the fawning over Theresa May’s first statement as Prime Minister by even the most progressive corners of the press? Her claim outside No 10 that she is “squarely at the service of ordinary working-class people” – and the dedication of her speech to those who “can just about manage but […] worry about the cost of living” – led to excitable cries of One Nation, blue-collar Toryism and even Milibandism.

But, as I have argued before, the Chancellor Philip Hammond’s first financial statement last Autumn showed that this rhetoric wouldn’t be backed up by a huge amount of policy. Hammond and May’s inheritance of Osborne’s severe welfare cuts continues to characterise their attitude towards benefit claimants.

The welfare cap is still there. The four-year freeze of working-age benefits continues. This means those claiming Jobseeker’s Allowance, Employment and Support Allowance, income support, housing benefit, Universal Credit, child tax credits, working tax credits and child benefit will be worse off, as inflation increases but their benefits remain flat.

Child tax credits and child benefit through Universal Credit will be limited to two children, and the government recently announced its plan to remove the entitlement to housing benefit for some 18-21 year olds.

Hammond’s only offer to those depending on the state to boost their income is to reduce the taper rate at which your benefits through Universal Credit are withdrawn as you begin to earn more – from 65 per cent to 63 per cent.

The Chancellor announced this in his Autumn Statement last November and has made no new announcements about benefits since. In fact, his only reference to welfare in his Spring Budget speech was to repeat his softening of the taper rate:

“The Universal Credit taper rate will be reduced in April from 65 per cent to 63 per cent, cutting tax for 3 million families on low incomes.”

But remember, this isn’t giving more money to claimants – it’s very slightly reducing the amount Universal Credit is being cut. According to the Independent, the planned £3bn-a-year reduction in the work allowance (which is the amount benefit claimants can earn before their benefits start being withdrawn) has only really been reduced by about £700m by Hammond.

And the Office for Budget Responsibility’s analysis of the Budget finds less expenditure on the new benefit regime of Universal Credit than the old welfare system – reflecting the fact that the new system is “less generous on average”, particularly for those who will be claiming the equivalent of tax credits and disability benefits.

Not exactly relieving those worries about the cost of living May was so sympathetic about on Downing Street last July.

Anoosh Chakelian is senior writer at the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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