Christians Against Poverty Autumn Budget reaction

This Autumn Budget was a crucial opportunity for the Government to do more to help people on low incomes across the UK. Disposable incomes are no higher in October 2024 than at the end of 2019, with the poorest third of people seeing the greatest proportionate fall in living standards. 

We have no doubt that the Government has some really hard financial decisions to make in terms of where to cut, save, adjust and spend. Labour say they were elected ​‘first and foremost’ to sort out the public finances. CAP also has some specific policy asks that if met would most impact our clients. How well did today’s budget hit these?

Here’s what Christians Against Poverty were hoping to see.

We wanted the Government to bring more clarity to their commitment to ensure the legal minimum wage becomes more like a real living wage that pays reference to the true cost of living.

It was announced that the government would be accepting the Low Pay Commission’s recommendation to increase the National Minimum Wage for 18–20 year olds. This reduces the gap between earnings for different ages and brings it closer to the National Living Wage, a policy we have been calling for.

There was also some support for helping people into work, a commitment to not increase employee National Insurance, or income tax, and an end to the freeze to the personal tax thresholds in 2028. This means people will get to keep more of the money they earn.

They also made reference to support for parents in making paternity and parental leave available from day one of employment.

Although the increase in the National Minimum Wage was really positive, there was no reference to its connection to the true cost of living. This is important particularly because the Real Living Wage has recently been increased.

We wanted the Government to acknowledge that social security rates are not currently high enough to cover the costs of essentials, and in turn put in measures to ensure the levels are increased.

There was commitment to increase working age benefits by current CPI rate — 1.7%. This will mean a small increase in income for work age people.

The earnings limit for carers allowance was increased to the amount of National Minimum Wage at 16 hours. This means the amount someone is allowed to earn before they lose their entitlement to the benefit is higher.

The maximum amount which can be deducted from Universal Credit is to be reduced from 25% to 15%. This will allow those with debt deductions to keep more of the benefits they are entitled to.

Although an uprating of benefits was welcomed, there was no commitment to review how this is approached in the future. Currently, there is a significant lag between the decision and the outworking, which can be frustrating when rates change significantly. This is particularly pertinent this time round, and CPI is predicted to be higher over the next few months.

There was no mention of any other benefit-related changes that would have made a big impact, such as removal of the 2 child limit or an increase or removal of the benefit cap (which has only been increased once since its introduction in 2016).

We wanted the Government to provide support for those struggling with escalating costs and building up unmanageable debt.

There was mention of the extension of the Household Support Fund, for a further year from April 2025. This is a much-needed boost to local councils, and enables the money to go to those who need it most. The founding also includes Discretionary Housing Payments, which are key for helping those who cannot afford their rent for a variety of reasons.

The bus fare cap (currently £2, rising to £3 from January 2025) is being extended for a year, acknowledging the need for affordable public transport.

There was no help for energy costs, either direct cash or supplier funds. Considering the recent increase in the price cap over winter, this was disappointing, and we would love to see funding for a Help to Repay scheme and support for the high cost of energy over winter.

We wanted the Government to commit to and suggest strategies to address poverty in the UK.

There was funding committed for homelessness, which we know can significantly impact and be impacted by debt situations.

There was also increased funding for the provision of breakfast clubs to enable all children to have a nutritious start to the day.

We would have liked to have seen additional support for projects that more directly affect debt, such as increased funding for debt advice or new legislative powers given to the Enforcement Conduct Board to stop negative practices in debt collection.

There were also no further details on the Work Capability Assessment review and possible changes, which will be a significant fear to lots of disabled people.

Overall, there were some welcome policy announcements but for many who face the reality that their income is not high enough to cover the costs of essentials, their situation is still looking dire. More needs to be done to provide support for people in financial difficulty and to tackle poverty in all of its forms, once and for all.