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23 November 2016

Philip Hammond to scrap letting agent fees and relax Universal Credit

The Chancellor's first Autumn Statement woos the "just managings". 

By Julia Rampen

Renting families on low pay will receive some relief in plans outlined in an Autumn Statement aimed squarely at the “just managings”.

The Chancellor Philip Hammond is expected to announce a ban on letting agent fees, which can cost renters hundreds of pounds a year in England and Wales (they are already banned in Scotland). 

After the news was announced, the share price of estate agents Foxtons plummeted by 9.37 per cent.

Meanwhile, a change to the Universal Credit taper rate – the pace at which benefits are withdrawn after a claimant finds work – is expected to benefit 3m families.

In her first speech as Prime Minister, Theresa May pledged to help the families that were just about managing – consequently given the acronym “the Jams”.

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Both policies mark a shift in tone from the policies of his predecessor, George Osborne, who attempted to cut working tax credits and used his 2012 Autumn Statement to condemn the “neighbour still asleep, living a life on benefits”.

Hammond is also expected to give more than a million workers a pay rise when he increases the minimum wage from £7.20 an hour to £7.50 in April 2017.

For claimants receiving the new all-in-one benefit, Universal Credit, the taper rate will be reduced from 65 per cent of the payment to 63 per cent. However, this is still much higher than the original planned taper rate of 55 per cent. 

But despite pulling some early Christmas presents out of the red briefcase, Hammond’s main task will be to reassure businesses and investors that Britain can weather the Brexit storm.

His task of ensuring stability has already put him at odds with some of the more exuberant Brexiteers, who would prefer to prioritise immigration control over economic considerations.

The government has already signalled plans to invest in infrastructure, an area where it was previously constrained because of Osborne’s decision to include this spending in his deficit target.

Hammond is also promising a housing stimulus, with £1.4bn targeted at building new affordable homes.