Jeremy Corbyn has accused Philip Hammond of delivering a “broken-promise budget” that showed public spending cuts would continue despite Theresa May’s Tory conference pledge that the era of austerity was over.
The Labour leader told the Commons that the chancellor’s statement, peppered with spending announcements aimed at satisfying a variety of Conservative backbench campaigns, would fail to undo the damage already done by years of fiscal restraint.
He criticised the government for focusing on “ideological tax cuts” by bringing forward by a year a planned increase to the personal tax-free allowance and lifting the higher-rate tax threshold to £50,000. “This government is harsh on the weak and feeble on the strong,” he said.
Tory backbenchers, however, lapped up the budget, in which the chancellor also announced moderate funding increases for defence, social care, mental health and universal credit, addressing many of their outstanding issues of concern.
One former cabinet minister told the Guardian: “As long as the budget presses two or three buttons for Tory MPs then the government doesn’t really have anything to worry about. It will keep the backbenches in line for now.”
Ministers have privately raised concerns that the budget should bolster support for May among her MPs before any vote on a Brexit deal, which is likely to divide her restive party still further.
Corbyn said that rather than tackling “burning injustices” as May had pledged to do on the steps of Downing Street, her government had made them worse.
“Austerity is not over,” he told MPs. “Far from building a stronger economy, eight years of austerity has damaged our economy, delayed and weakened the recovery and endlessly postponed fixing the deficit.
“The prime minister pledged austerity is over. This is a broken-promise budget. What we’ve heard today are half measures and quick fixes while austerity grinds on. Far from people’s hard work and sacrifices having paid off … this government has frittered it away on ideological tax cuts to the richest in our society.
“This budget won’t undo the damage done by eight years of austerity and doesn’t begin to measure up to the scale of the job that needs to be done to rebuild Britain.”
The shadow chancellor, John McDonnell, tweeted: “We now have it confirmed that the pledge to end austerity was a broken promise, like the whole budget. It’s now clear austerity is not over, the cuts to social security will continue. No new money for day to day running of our schools, local police and nothing for local government.”
Austerity isn’t over. A broken promise Budget. https://t.co/RYq2Zf34vt
— John McDonnell MP (@johnmcdonnellMP) October 29, 2018
Government insiders have admitted that the series of spending announcements were, in part, intended to reassure Tory backbenchers who are anxious about the impacts of universal credit, Brexit and delivering on May’s pledge to end austerity.
Hammond is understood to share fears that the prime minister’s promise to step up public spending had been interpreted too literally, putting pressure on the Treasury to announce giveaways. He said only that austerity was “coming to an end”.
Ministers have been starkly aware of the need to keep backbenchers onside before difficult Commons votes on any Brexit deal. The former Brexit minister Steve Baker said: “We always expected the budget to contribute to the whipping for a deal.”
Dominic Grieve, a leading Tory remainer, said he thought Hammond had done enough. “It was an excellent budget and will keep people happy,” he said.
The former welfare secretary Iain Duncan Smith, who quit the cabinet over spending cuts, welcomed the extra £1.7bn for universal credit. “We wanted £2bn but he also means to revisit it at each fiscal event to ensure it is properly funded. We haven’t completely unravelled [the former chancellor George] Osborne’s malicious cuts to universal credit but we are getting there.”
Robert Halfon, the Tory MP for Harlow, who has along with South Cambridgeshire MP Heidi Allen called for a rethink of the troubled welfare scheme, said: “This was good on the whole. It showed that they were listening to strong lobbies.”
Johnny Mercer, who has campaigned for more defence funding, said the £1bn extra announced by Hammond was “good news” and meant the Ministry of Defence could deliver its plans “without the madness of the proposed in-year cuts”. Tom Tugendhat, another MP and former army officer, said: “Big win for the country.”
The Tory chief whip, Julian Smith, sitting on the government frontbench, appeared to repeatedly cock his head in the direction of Nigel Dodds, the DUP leader at Westminster, who previously threatened to vote against the budget if May crossed her Brexit red lines, when funding announcements for Northern Ireland were made.