THE BLOG

Hammond's Budget: A Miserable Offer To Low Income Families

01/12/2017 11:26 GMT

Last week’s budget was a do-little effort from a government which, like the Conservative/Liberal Democrat coalition before it, has effectively and brutally dismantled Labour successes in ending child poverty and in homelessness reduction. It was a miserable offer to low income families, doing little to deal with the government’s self-inflicted policy failures.

Rough sleeping and Temporary Accommodation

One of the most obvious and stark examples of these failures is the growth we’ve seen in rough sleeping and people living in temporary accommodation. The number of households in temporary accommodation in Greater Manchester has more than tripled since 2010. That’s an appalling situation for families unable to settle and put down roots in the community, it’s especially damaging for children whose education faces disruption, and it’s shockingly expensive for the taxpayer. But, while he did announce money for a rough sleeping pilot in Manchester, to help those already on the streets, there was little beyond a consultation on longer tenancies in the private rented sector, to prevent people from becoming homeless in the first place.

While I do applaud the chancellor’s aim of halving rough sleeping by 2022 and eliminating it by 2027, even halving it over the next 5 years would still not bring the number down to the position in 2010 when Labour left office. This is also not a new pledge but simply a repetition of the Conservatives election manifesto commitment suggesting this government are running out of ideas. In the North West, rough sleeping has tripled – it’s risen ten-fold in Manchester city centre as a direct result of the actions of Tory policies.

Andy Burnham has taken a lead in tackling this, but without concerted and sustained support from the party that caused the problem, and as cuts to social security continue, and work increasingly doesn’t pay enough to maintain a decent standard of living, growing in-work poverty will push more working families and individuals into perilous positions.

Child Poverty

So it was also disappointing that there was so little in the budget in the way of efforts to address the effects of benefits and tax changes that threaten to reverse all the progress Labour made in cutting child poverty. Cuts to universal credit - which originally promised to lift 350,000 children out of poverty - are now predicted to push a million children into poverty, and 900,000 into severe poverty, by the end of the decade.

Families with children lose most from universal credit cuts. A couple with children stand to lose almost £1000 a year; single parents lose £2380, according to the Child Poverty Action Group. Working families stand to lose £420 a year on average from cuts to Universal Credit. The Resolution Foundation says the poorest third of households are set for an average loss of £715 a year by the end of the parliament.

I’m pleased the secretary of state for work and pensions made some additional announcements on Thursday that will help those on universal credit: cutting the waiting time by one week, delaying the introduction of the so-called ‘2-child’ policy, and allowing a run-on for existing claimants of housing benefit. But the bigger problem with universal credit is the cuts to the taper and work allowance, which mean you keep less of your earnings as your pay starts to increase – hardly a great work incentive. And all this sits alongside freezes and cuts to other benefits for children, which the IFS predicts will contribute to the rates of children in relative poverty projected to climb beyond their 1996 peak by 2021-22. There was no sign the chancellor intends to do anything about that.

Paying the bills

There wasn’t much help for families battling the rising cost of living either. Rising inflation and the fall in the value of the pound have rocketed the price of essential items like food and clothing, but there was no sign of the promised cap on energy bills, and in particular, nothing to help disabled people who face additional costs (such as for equipment, extra laundry or turning up the heating because they have to spend more time at home), and are at particular risk of poverty. As we approach the winter months, many will be worrying about the bills – but they too got nothing from the chancellor.

If anyone expected the budget to bring an early Christmas present to those on the lowest incomes, they’ll have been sorely disappointed by Wednesday’s Scrooge budget.

Article first published onGM Poverty Action’s website on the 29th November 2017