Hammond hears inequality but is deaf to calls for looser financial policy

OLIVIER HOSLET

British Chancellor of the Exchequer Philip Hammond looks on during the European Finance Ministers Council meeting in Brussels, Belgium, 23 May 2017.

Hammond hears inequality but is deaf to calls for looser financial policy


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The UK’s finance minister, Philip Hammond, defended the need for the UK to live “within its means,” while admitting that the election result shows the British people were weary of austerity politics.

“We are not deaf,” he told the BBC.

Be that as it may, On Sunday Mr. Hammond did not want to hear about calls for a looser fiscal policy, based on higher levels of borrowing. He reiterated that the Conservatives did not commit neither to keeping taxation nor maintaining public expenditure at current levels, recalling his demand for “flexibility” in view of Brexit negotiations. Tax hikes and spending cuts are still on the table,

Tax hikes and spending cuts are still on the table, especially as Hammond underscored that the Conservative government intends to eliminate public deficit “by the middle of the next Parliament.” Hammond’s only concession was focusing on increasing the “productivity” of the public sector, which presumably means doing more with the same resources, rather than cuts and taxes.

Meanwhile, a report by the Resolution Foundation released on Sunday suggests that inequality in the UK is rising, but that has more to do with home ownership than income. While income inequality appears to be at its lowest level since 1980, the share of homeowners is shrinking

Property inequality was reduced from 1990 to the mid-2000s, but the trend is reversed over the last decade, fueling wealth disparity between rich and poor and, significantly, young and old. The top 1% of adults (488,000 people) own 14% of the nation’s real estate, while 15% (7.3 million people) own nothing and/or are in debt.

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