If Theresa May and her chancellor of the exchequer, Philip Hammond, don't already regret adopting the phrase "just about managing" to describe households struggling to make ends meet, they almost certainly soon will.
As well as having a distinctly patronising tone to it, the acronym – Jams – lends itself to the sort of headlines the May administration could well have done without ahead of its first major economic statement to parliament today, the first since Britain’s shock Brexit vote.
It was on the steps of Downing Street, in her first address as prime minister, that May spoke of those who “just about manage”. They had a job, she said, but didn’t always have job security. They were making ends meet, but worried about the cost of living.
There's no precise definition of Jams, but they're a similar group to the "hard-working families" so frequently referred to by former Tory chancellor George Osborne or the "squeezed middle" that so concerned former Labour leader Ed Miliband.
The Resolution Foundation reckons some six million working-age households, made up of 10 million adults, fall into the "just managing" category. Many of these will have voted to leave the European Union in the June referendum.
Giveaways
So when Hammond delivers his autumn statement shortly after 12.30pm on Wednesday, he and his prime minister will be keen to let the Jams know that they want to help. The problem is, the chancellor’s hands are so tied by the nation’s “eye-wateringly large” – his own words – debt that he is in no position for giveaways and is unlikely even to be able to offer much in the way of jam tomorrow.
The difficulty of handing out sweeteners to the Jams was underlined yesterday in the latest figures on public finances. Although the deficit for October was much lower than expected, at £4.8 billion (€5.6 billion) against forecasts of about £6 billion (€7 billion), it takes the deficit for the first seven months of the financial year to £48.6 billion (€56.8 billion).
That means the target of £55.5 billion (€64.8 billion) for the full year, set by the independent Office for Budget Responsibility (OBR), will be overshot by a big margin. The OBR set its targets in the March budget and, although the economy has fared far better than expected since the Brexit referendum, Hammond has made it clear that Osborne’s ambition to run a surplus by 2020 is dead in the water.
Most forecasters expect the government will be forced to borrow an additional £100 billion (€117 billion) over the next five years, figures the OBR is expected to confirm today alongside the chancellor’s statement.
The OBR will also slash its forecasts for economic growth, and is likely to revise its forecast for GDP in 2017 down from 2.2 per cent to between 1.25 per cent and 1.5 per cent. It will also warn of higher inflation because of the slump in the value of the pound and will raise its cost-of-living forecast for next year from 1.6 per cent to nearer 3 per cent.
Safe pair of hands
Hammond is regarded as a safe pair of hands but not perhaps the most scintillating performer in Westminster, hence his nickname “Spreadsheet Phil”. So a relatively low-key speech is expected, particularly because, as became traditional under his predecessor, George Osborne, many of the measures to be announced today have already been leaked or pre-announced.
Alongside the gloomy economic update, there will be promises of increased spending on infrastructure and also on research and development. We also know that Hammond will pledge to pour more than £1 billion (€1.17 billion) into improving Britain’s woefully slow broadband. Full-fibre will become available to another two million households, enabling them to download an entire box set in less than 60 seconds.
For affordable housing, there will be a £1.4 billion (€1.6 billion) cash injection to help build 40,000 new homes. There will also be support for Generation Rent as letting agents’ fees are banned, a move that’s expected to help more than four million households in private rental housing.
Other measures include an increase in the National Living Wage and improvements to the Universal Credit system.
A clampdown is expected on workplace perks, with Hammond likely to restrict the benefits offered by salary sacrifice schemes, whereby employees give up part of their pay in return for benefits, from company cars to gym membership.
It is possible that this may be the last autumn statement in its current form, as Hammond is known to be keen to return it to its original role of simple fiscal forecast rather than the effective second annual budget it has turned into in recent years.
If Spreadsheet Phil’s performance turns out to be as dull as expected on Wednesday, that would certainly be a crowd-pleaser.
Fiona Walsh is business editor of theguardian.com
