Mayor accuses Government of ushering in ‘Austerity 2.0’

• £55bn cuts and tax increases in Autumn Statement will disproportionately impact least well-off
• Mayor’s call for free schools meals and rents freeze ignored
• Sadiq believes benefits increase should occur immediately, not in April
• Mayor criticises flawed windfall tax and says loopholes must be closed
• Lack of support for businesses, particularly those in retail, hospitality and leisure sectors

The Mayor of London, Sadiq Khan has accused the Government of ushering in ‘Austerity 2.0’ and failing to address the needs of struggling families in today’s Autumn Statement.

As the country grapples with the worst cost of living crisis in a generation, a situation made worse by September’s failed ‘Mini-Budget’, Sadiq believes the Government is still not taking the basic steps required to help those who need the most support.

While the Mayor recognises the need to take urgent steps to stabilise the public finances and reassure the markets, he is extremely worried that the £55bn of cuts to services and tax increases announced today will disproportionately impact the least well-off.

Sadiq has repeatedly called on successive Prime Ministers and Chancellors to make a real difference to millions of Londoners by providing free school meals to all primary school children and introducing a ‘Lifeline Tariff’ which will allow a minimum floor of domestic energy use before charges begin for the most vulnerable people in London.

Once again, these calls were ignored today, with the Chancellor also refusing to give the Mayor the power to freeze spiralling private rents in London, which could save tenants £3,000 over two years.

The Mayor has welcomed the Chancellor’s decisions to increase the minimum wage, uprate benefits in line with inflation and to give those on means-tested benefits, such as Universal Credit, cost of living payments. However, Sadiq believes rather than waiting until April 2023, the benefits increase should be introduced immediately to help low-income people manage high costs this winter.

After massively scaling back the Energy Price Guarantee in the aftermath of the Mini Budget, there was further bad news for households today who will now see their bills increase from an average of £2,500 to as much as £3,100 from April.

The Mayor has also criticised the Government’s flawed windfall tax scheme as he believes major oil and gas companies will be able to use a loophole to avoid paying the tax. Sadiq instead wants to see a genuine windfall tax that would see billions of pounds of profit handed back to the taxpayer.

The Mayor of London, Sadiq Khan, said:

“In the middle of the worst cost of living crisis in a generation, the Chancellor has today ushered in ‘Austerity 2.0’ – which will further damage our public services and impact the least well off in society.  

“As inflation and interest rates continue to soar, many Londoners struggling desperately to make ends meet will be left bitterly disappointed. They are having to pay the price for the mistakes this Government has made.

“The policies announced today will only result in more families facing further tough choices between heating and eating this winter – and with inflation already so high it cannot be right that those on benefits will need to wait until April to see an increase in their payments.

“It should not have been this way. The Chancellor should have come forward with some simple measures that would have made a difference – such as providing free school meals to all primary school children and giving me the power to freeze private rents.”

The Mayor also believes that there was insufficient support today for small businesses, particularly those in sectors which are still recovering from the pandemic and are particularly at risk as households cut discretionary spending to cope with the cost-of-living crisis.

The Chancellor has also held the threshold at which businesses must register to pay VAT at £85,000 until 2026, instead of raising it in line with inflation. This could see thousands more small businesses in the capital forced into paying VAT.

The Mayor was also calling for the Chancellor to reintroduce tax free shopping for tourists. This is something Sadiq had successfully lobbied for alongside key London business groups but was shelved following the Mini Budget. It would provide a much-needed boost to London’s retail and hospitality sectors at a time they need it most and help to make London and the UK a more attractive place for international tourists to visit, bringing in far more money to the Treasury than it costs.