Pump up the JAMs! Hammond is under renewed pressure to help 'just about managing' families amid claims existing welfare curbs will make them £2,500 worse off

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Philip Hammond is under renewed pressure to help struggling families today amid claims they are on track to be £2,500 a year worse off.

With the Chancellor deliver a crucial Autumn Statement this week, a study has warned that planned welfare curbs and rising inflation are set to deal a major blow to the 'just about managing' group - or 'JAMs'.

In a round of interviews over the weekend, Mr Hammond played down expectations of a spending splurge in his first financial package since taking over from George Osborne.

Philip Hammond, pictured on the Andrew Marr Show yesterday, is set to use his Autumn Statement to announce measures to help JAMs - 'just about managing' families 

He also risked the fury of Brexiteers by delivering a gloomy assessment of the turbulence and uncertainty the economy faces as a result of the historic vote to quit the EU.

There have been dire predictions of a £100billion hole in the government's finances by 2020 due to lower growth and tax revenues. 

Mr Hammond signalled there will be extra infrastructure spending on roads yesterday as ministers seek to give UK plc an injection of activity and boost long-term productivity.

Among today's key developments ahead of Wednesday's Autumn Statement are:

• Theresa May has warned business leaders to clean up their act and help to rebuild trust in capitalism. In return, she is promising to continue business tax cuts. 
• Mrs May's speech to the CBI today was an attempt to set the mood ahead of Philip Hammond's first big speech on Wednesday.
• The Autumn Statement is expected to be dominated by sharply cut growth forecasts as business uncertainty over Brexit feeds into the economy in the next five years.
• Despite the difficulties, Mr Hammond is poised to announced help for the 'Just About Managings', dubbed JAMs, via spending on roads, high personal tax allowances and possibly frozen petrol duty. 
• Labour has demanded the Government borrow money for a massive new programme of infrastructure spending.  

He made clear there will be measures to assist the JAMs, who he admitted 'work hard and by and large do not feel that they are sharing in the prosperity that economic growth is bringing to the country'.

But a study published in the Guardian suggests cuts to Universal Credit and a four-year benefit rate freeze, combined with higher inflation and rising rents will leave such families £2,500 a year worse-off by 2020.

The Chancellor is facing a difference economic landscape from predecessor George Osborne (statistics as of November 18, 2016)

The research by the consultancy Policy in Practice said the combined impact will squeeze low income families out of £48.90 a week by the end of the decade.

Shadow chancellor John McDonnell has urged Mr Hammond to reverse the UC cuts alongside reductions in disability benefits that will leave some claimants £30 a week worse off.

Mr Hammond is poised to announce £1.3 billion for improvements on Britain's roads among a raft of infrastructure investment - although unlike Mr Osborne he will leave it to individual ministers to announce the individual projects.

Despite abandoning the former Chancellor's plan for a budget surplus by 2020, Mr Hammond is set to unveil a new 'flexible' fiscal framework with a rolling target for eliminating the deficit.

Other measures in the package will include banning pension cold calls which can leave people open to scams which trick them out of their life savings and is reportedly expected to approve another freeze in fuel duty until April 2018.

Mr Hammond could also crack down on staff perks like gym memberships and mobile phone contracts which are offered to workers willing to forgo part of their salaries in return in an effort to boost tax revenues, according to reports.

The Chancellor, pictured on the Andrew Marr show yesterday, is expected to announce a cradckdown on tax-free job perks alongside boosted spending on infrastructure

Mr Hammond admitted Britain still has an 'eye-wateringly large debt' and cautioned those expecting giveaways that the economy is facing a 'sharp challenge' as it starts the EU divorce process. 

But he pledged to ensure Britain's economy remains 'match-fit for the opportunities and the challenges that will lie ahead'.

Pro-Brexit Tory MPs hit out at Mr Hammond for continuing the Treasury's doom and gloom approach to Brexit, warning that it was self-harming and pointed out that its forecasts on Brexit had so far failed to materialise. 

Former justice minister and Tory MP Dominic Raab, a member of the Vote Leave campaign, told Mr Hammond: 'Let's not have this endless pessimism'.  

The Chancellor has already ditched Mr Osborne's goal of generating a budget surplus by 2020 but warned those hoping he will borrow large sums of money to invest in productive infrastructure that he remains highly constrained by the need to bring down the deficit.

'This economy does need investment but it also needs us to maintain credibility with markets,' Mr Hammond told ITV's Peston On Sunday.

The SNP today urged Mr Hammond to use his statement to 'ditch austerity' after a Policy in Practice study found 187,000 households had been left worse off by welfare changes since 2010.

Mr Hammond will have the benefit of a continued boom in the job's market when he makes his speech on Wednesday. Last week's unemployment data show the number of people out of work was at an 11-year low (pictured) 

Dr Eilidh Whiteford MP, SNP Social Justice spokesperson, said: 'This study confirms what families across the country already know to be true - that the Tories' failed austerity agenda has cut living standards and is leaving working families struggling to get by.

'As a result of Tory cuts it is now more difficult than ever for ordinary families to cover their rent, bills, and afford everyday basics - many families are working hard but struggle to put aside money at the end of the month.

'The Tory claim to be on the side of the 'just about managings' is ludicrous - nothing could be further from the truth when UK government policies are leaving families poorer and making life harder for the majority.' 

The people don't trust you any more! Theresa May warns business leaders to clean up their act and embrace Brexit or face the wrath of the public

Theresa May (pictured at the CBI conference today) used her speech to demand they embrace 'change' after the Brexit vote 

Theresa May delivered a stark message to business leaders today that the public does not 'trust' them any more and they must embrace the 'change' demanded in the historic EU referendum.

The Prime Minister urged companies to work with her saying that they all had to 'rise to meet this moment'.

She said bad behaviour by a 'limited few' had besmirched the reputation of the whole business community and pledged reforms. 

But she also held out an olive branch by declaring her determination to slash corporation tax to attract firms to the UK.    

The gauntlet was laid down in a speech to the CBI conference this morning, ahead of the crucial Autumn Statement later this week.

Mrs May said the behaviour of a few business had let down the majority, and said the government would be setting out proposals for reform.

She said the result in June showed that 'change is in the air' and everyone had to respond.

'We all know that in recent years the reputation of business as a whole has been bruised. Trust in business runs at just 35 per cent among those in the lowest income brackets,' Mrs May said.

'The behaviour of a limited few has damaged the reputation of the many. And fair or not, it is clear that something has to change.

'For when a small minority of businesses and business figures appear to game the system and work to a different set of rules, we have to recognise that the social contract between business and society fails – and the reputation of business as a whole is undermined.'

Addressing the conference, Mrs May said the behaviour of a 'few' in business had undermined public trust and insisted there had to be reforms to show capitalism can work 

Mrs May hailed the many strengths of the UK economy, saying it was 'world class' in a huge variety of areas. 

She also insisted there had been 'massive votes of confidence' in Britain since the referendum result, with businesses choosing to keep investing here. 

But Mrs May said there were also 'long term structural challenges' that have to be addressed during the Brexit process, including a lack of focus on improving infrastructure and boosting opportunities for young people. 

'Let us join together and show that we can rise to meet this moment. Let us respond to the public's demand for change,' she said.

'Let us restore their faith and prove that capitalism can deliver them a better future.'

The PM restated her commitment to the Conservative 'core beliefs' in 'free markets, capitalism and business' after some company bosses complained about a negative tone towards enterprise.

Theresa May has declared her determination to cut corporation tax to a historic low

US president-elect Donald Trump has promised to cut the American corporation tax rate to 15 per cent, meaning the Government could face pressure to slash further

She said the government would ensure Britain has the lowest corporate tax rate in the G20 group of nations. Currently 20 per cent, it is due to fall to 17 per cent by 2020.

US president-elect Donald Trump has promised to cut the American rate to 15 per cent, meaning ministers could face pressure to slash further. Mrs May will promise an extra £2billion a year for cutting edge research and development by 2020 and announce a review of tax breaks for hi-tech firms.

'We will review the support we give innovative firms through the tax system because my aim is not simply for the UK to have the lowest corporate tax rate in the G20 but also one that is profoundly pro-innovation,' she said.

However, Mrs May will also urge firms to show they are 'playing by the same rules as everyone else' by paying tax and reining in corporate behaviour that alienates the public.

The Prime Minister described the June 23 Brexit vote as a 'true national moment' and a 'once-in-a-generation chance to shape a new future for our nation – the chance to build a stronger, fairer country'.

She promised to 'change the way our country works – and the people for whom it works – for ever'.

'Stop this endless pessimism!' Philip Hammond blasted after he warns of rising inflation, slower growth and 'eye-watering debt' in latest doom-laden Brexit warning

Britain will be struck with rising inflation and slower growth next year that will leave major holes in public spending, warned Philip Hammond, pictured on ITV's Peston on Sunday show this morning 

Britain will be struck with rising inflation and slower growth next year that will leave major holes in public spending, Chancellor Philip Hammond warned today. 

He said Brexit is causing an 'unprecedented level of uncertainty' amid reports his Autumn Statement on Wednesday will reveal a £100billion black hole in public the finances.

Today Mr Hammond admitted Britain still has an 'eye-wateringly large debt' and cautioned those expecting giveaways that the economy is facing a 'sharp challenge' as it starts the EU divorce process. 

But he pledged to ensure Britain's economy remains 'match-fit for the opportunities and the challenges that will lie ahead'.

Pro-Brexit Tory MPs hit out at Mr Hammond for continuing the Treasury's doom and gloom approach to Brexit, warning that it was self-harming and pointed out that its forecasts on Brexit had so far failed to materialise. 

Former justice minister and Tory MP Dominic Raab, a member of the Vote Leave campaign, told Mr Hammond: 'Let's not have this endless pessimism'. 

Mr Hammond risked causing further anger with his party's increasingly influential group of Brexiteers after signalling that he wants Britain to continue attracting EU workers. 

And he slapped down Tory colleagues who have written to the Prime Minister demanding her to commit to a 'hard Brexit', telling them to stop 'undermining our negotiation'.  

After Philip Hammond issued further doom-laden warnings about the impact of Brexit, former justice minister and Tory MP Dominic Raab, pictured on Sky News today, told the Chancellor: 'Let's not have this endless pessimism'

The Chancellor has already ditched Mr Osborne's goal of generating a budget surplus by 2020 but warned those hoping he will borrow large sums of money to invest in productive infrastructure that he remains highly constrained by the need to bring down the deficit.

LABOUR VOWS TO REVERSE MIDDLE CLASS TAX CUTS AND WELFARE SAVINGS

John McDonnell told the Andrew Marr Show today that Labour would reverse the Tory government's tax cuts for middle-earners

Labour would reverse middle class tax cuts and reinstate all Tory reforms to welfare spending, Shadow Chancellor John McDonnell said today. 

Mr Hammond is expected to raise the 40p income tax threshold from £43,000 to £50,000. 

But Mr McDonnell told the Andrew Marr Show: 'We would halt the tax cuts to the rich and to the corporations and we would reverse some of them. 

'We would tackle seriously tax evasion and tax avoidance. In that way we would have the resources to invest in our public services.

'If you had a fair taxation system, you weren't giving tax giveaways to corporate operations and to the rich, if you seriously tackle tax evasion and avoidance, if you grew the economy, we'd be able to afford our public services.'

Asked if he would reverse the Government's welfare cuts, Mr McDonnell said: 'Yes'. 

He also defended Labour's plans to borrow £500billion to invest in the economy it wins power, insisting it 'not huge in comparison to what was happening in the 2000s. 

'[It's] not unusual for what was happening before under past governments,' he told Pienaar's Politics on BBC Radio 5 Live.  

'This economy does need investment but it also needs us to maintain credibility with markets,' Mr Hammond told ITV's Peston On Sunday.

'We have a very large debt, we have a very large deficit and anybody who tells you that we can borrow without limit and to do all the good things of course we'd all like to do is not telling you the truth.

'We are highly constrained in how we can approach this and we must do it cautiously and appropriately.'  

Mr Hammond warned consumers that the weak pound would hike prices in the shops. 'It's clear that inflation is back and that is hopefully a temporary phenomenon as the effect of Sterling's decline feeds through the economy,' he said. 

Earlier he warned of economic trouble ahead as he sought to set the tone for Wednesday's mini-budget.  

He told the Andrew Marr Show: 'Many of those forecasts are pointing to a slowing of economic growth next year and a sharp challenge for the public finances. 

'There are a range of reasons for that and we've got to make sure that what we do is responsible, that everything we do is compatible with building resilience in our economy as we go into a period where there will be some uncertainty around the negotiation over our exit from the EU and focus on making sure that our economy is match-fit for the opportunities and the challenges that will lie ahead.'

Mr Hammond added: 'We have to maintain our credibility - we have eye-wateringly large debt, we still have a significant deficit in this country and we have to prepare the economy for the period that lies ahead.

'I want to make sure that the economy is watertight, that we have enough headroom to deal with any unexpected challenges over the next couple of years and most importantly, that we're ready to seize the opportunities of leaving the European Union.'

A government source said the aim of this Wednesday's Autumn Statement - the first of Mrs May and Mr Hammond's tenures - would be to 'ensure that everyone feels the benefits of economic growth'.  

Middle class earners will have to pay hundreds of pounds more in tax as Hammond plans raid on free gym membership, health checks and other job perks

Middle class earners are set to be hit by a new tax raid on job perks such as free gym membership, health checks and mobile phone contracts, it was revealed today. 

Chancellor Philip Hammond will use Wednesday's Autumn Statement to tighten up the rules surrounding popular 'salary sacrifice' schemes in which employees receive non-cash benefits in exchange for a cut in their pay.   

The schemes mean employees receive the perks tax-free, while big companies do not have to pay national insurance.

Chancellor Philip Hammond, pictured left on today's Andrew Marr Show along with John McDonnell, will use Wednesday's Autumn Statement to tighten up the rules surrounding popular 'salary sacrifice' schemes in which employees receive non-cash benefits in exchange for a cut in their pay

Campaigners say the majority of people who benefit are basic rate taxpayers – who have endured years of meagre pay rises – rather than executives.

But the Treasury fears salary sacrifice schemes have become too popular and that it is losing out on tax revenue as a result. 

The Chancellor's plans, revealed in today's Sunday Telegraph, have been quickly criticised as 'stealth tax', with firms claiming the axing of free medical checks is detrimental to the country's health.

Millions of employees could be saddled with losses in the hundreds of pounds, with many estimated to pay out £140 a more for phone contracts, for example.

A Whitehall source told the newspaper that cycle to work schemes and pension contributions would be safeguarded from the crackdown.

Salary sacrifice was never an official Government policy, but has grown up ad hoc over the past 20 years as a result of employers looking for ways to cut their NI bill and co-opting their workers into the process.

Low and middle-earners save the 12 per cent that they would otherwise pay in NI on the income they have 'sacrificed'.

It's not so beneficial for higher earners, because once wages go over the upper earnings limit, NI on income above this threshold is just 2 per cent.

Employers save some 13.8 per cent in NI on the sacrificed income for any worker on £8,000-plus a year. There is no cut-off point limiting their NI contributions for higher earners.

Bigger employers are most likely to go to the trouble of setting up salary sacrifice schemes, because the more staff are involved the more they reduce their potential NI bill.

Salary sacrifice schemes operated in something of a legal grey area for a long time, but HMRC recognised the practice some years ago and effectively let employers get on with it.

Theresa May clips Chancellor Philip Hammond's wings as she orders him to spend £1billion on the roads and warns he shouldn't try to emulate George Osborne 

Theresa May, pictured attending Church in her Maidenhead constituency with husband Philip yesterday, has won a power struggle with Philip Hammond by ordering him to take a 'hands-off' approach to other ministers

Prime Minister Theresa May has won a power struggle with Chancellor Philip Hammond by ordering him to take a 'hands-off' approach to other Ministers and stop trying to emulate his predecessor George Osborne.

Following weeks of heated exchanges between No 10 and the Treasury over the contents of Wednesday's Autumn Statement, Mr Hammond is preparing to announce a £1.3 billion boost for roads and help for the JAMs – the struggling families who are Just About Managing.

Mr Hammond will also formally ditch Mr Osborne's austerity targets as he embarks on a drive to spend his way through the economic disruption caused by Brexit. But while Mr Osborne used to force other Ministers to give him their most eye-catching policy plans to announce as 'rabbits out of hats' in major Commons setpieces, Government sources pointedly said last night that Mr Hammond had agreed to stick to his 'core job' of balancing the books.

It comes amid growing irritation in Mr Hammond's team over the amount of economic policy being generated by Mrs May and her advisers, who are determined to shift more of the balance of power back to Downing Street after the end of the Osborne era. The Chancellor will publicly claim that he supports his wings being clipped – because in his previous Cabinet jobs he had himself been irritated by Mr Osborne's interference.

However, a senior source last night compared Mr Hammond's insistence to 'the scripted lines used by hostages in kidnap videos', adding: 'Hammond would like to be every bit as powerful as George was, it's just that Theresa won't let him'.

Mr Hammond has been shocked by projections that the turbulence caused by the Brexit vote will open up a £100 billion hole in the public finances by 2021.

But Mrs May has insisted that he should find the money to help the JAMs: the six million working families who struggle to pay the bills on incomes between £18,000 and £34,000.

Theresa May has won a power struggle with Philip Hammond, pictured on ITV's Peston on Sunday show, by ordering him to take a 'hands-off' approach to other ministers and stop trying to emulate his predecessor George Osborne

Crucially, they are the voters most likely to be floating Labour or Ukip supporters.

Among the measures being considered by the Chancellor to appease Mrs May are the cancellation of a 2p rise in fuel duty, help with childcare costs and a cut in air-passenger duty.

He is also considering reversing Osborne's cuts to Universal Credit which reduced the incomes of more than three million people by an average of more than £1,000 a year, which Downing Street believes disproportionately hit the JAMs.

Last night a Government source said that the aim of the Autumn Statement would be to 'ensure that everyone feels the benefits of economic growth', by pledging billions of pounds for public building projects.

A Treasury source said: 'Mr Hammond will take a different approach to the Autumn Statement by announcing top-level spending decisions rather than announcing full details of individual projects.

'He believes the Treasury should be focused on its core job of economic policy, managing the public finances, and not doing spending departments' jobs for them.'

Victory for Mail as pension cold-callers are hit with ban and threatened with £500,000 fines 

Rogue firms are to be banned from using cold calling to sell rip-off pension investments.

In a major victory for the Daily Mail, new laws will threaten offenders with fines of up to £500,000.

Pension firms will also be given powers to block outward transfers if they suspect a client is being cheated.

Rogue firms are to be banned from using cold calling to sell rip-off pension investments. Nick Sayer, director of B2C Data, (pictured) boasted he had access to the investments and pension pots of 'a million people'

The crackdown from Chancellor Philip Hammond comes after the Mail revealed almost 11million pensioners are targeted by unscrupulous cold callers every year.

Savers reported estimated losses of almost £19million to such scams in the 12 months to March.

Under the new regime, all calls where a business has no existing relationship with an individual will be forbidden. This includes scammers targeting those who inadvertently 'opt in' to receiving third-party communications.

There is no way to stop fraudsters making unsolicited calls to the elderly. But it is hoped those receiving calls will hang up in the knowledge that they are being contacted illegally. The rules will be enforced by the Information Commissioner's Office.

The Chancellor also wants to make it harder to set up fraudulent pension schemes.

A Treasury official said: 'Research shows that scammers could be behind as many as one in ten pension transfer requests and the new framework will cut off scams at the source. 

'With signs that pension fraud is on the increase, the Chancellor believes that introducing hard-hitting changes – to stop scams before they occur – is more important than ever.'

Campaigners say fraud has risen since George Osborne introduced freedoms in April 2015 allowing over-55s to withdraw thousands of pounds from their pensions pots. 

The scheme provides an alternative to buying an annuity on retirement – many of which deliver poor financial returns.

However there is mounting alarm that fraudsters are using the freedoms to trick people into parting with their life savings, most commonly by cold calling them with offers of 'once in a lifetime' investment opportunities.

In many cases the investment turns out to be non-existent and victims lose all or a significant proportion of their retirement savings. At least 2,000 frauds have been reported to the police.

A Daily Mail investigation found that private and highly sensitive details of the pension pots of millions of people were being sold to unscrupulous cold-calling firms.

Nick Sayer, director of one firm, B2C Data, boasted he had access to the investments and pension pots of 'a million people' – information that would be a godsend to scammers looking to target those planning to unlock their cash.

Baroness Altmann, a former pensions minister, said: 'It's so important to help people before they have been scammed. Once they have been scammed you don't get the money back.'

Yvonne Braun, of the Association of British Insurers, said: 'Pension scams and fraud are a huge problem. A lot of that is generated by cold calling, so we think that has quite a strong chance of cracking down on the problem. Cowboys should not be allowed anywhere near people's life savings.'