What had originally been dubbed the Spring Forecast has definitely felt more like a Spring Statement. But what got announced today, and what does CAP think?
What had originally been dubbed the Spring Forecast has definitely felt more like a Spring Statement. With the Government’s fiscal headroom appearing to be closing ahead of today’s announcement, the Chancellor has had to find more savings in order to not go back on her promise not to increase tax on working people.
Here at Christians Against Poverty (CAP) we had been hoping that the Government would do more to support those on the lowest incomes. After years of rising costs and low incomes, many households are sitting on the brink. Yet, from what has been announced today, the future looks ever more bleak for low income households.
Good news and bad news
The good news is that the Office of Budget Responsibility (OBR) has announced that the Chancellor has restored headroom to the £10bn surplus the chancellor had in October.
However this has been at the expense of some of the UK’s most vulnerable households. New changes, announced today, have shown the Government making further cuts to welfare support for ill and disabled people. The Universal Health Element will be frozen for current claimants; and for new claimants will be reduced to £50/w and then frozen. This comes alongside the proposals to restrict eligibility for those receiving Personal Independence Payments (PIP), where most of the Government’s savings are coming from.
According to the Government’s own impact assessment, it is estimated that there will be an additional 250,000 people (including 50,000 children) in relative poverty after housing costs by the end of the 29/30 financial year as a result of the modelled changes to social security, compared to baseline projections.
Changes to Universal Credit
There was also some good news for Universal Credit recipients, that the Standard Allowance will increase from the 25/26 figure of £92 per week, to £106 per week for 29/30. But again, this has been reduced slightly from the initial announcement last week — showing that it really is more a task of balancing the books than supporting the most vulnerable.
There’s been continued emphasis on supporting people getting back into work, to the tune of £1 billion. This is needed, as many people who struggle to re-engage with the workforce would value additional support. However, the OBR have not been able to forecast any employment gain from the cuts/changes to incapacity and disability benefits.
Impact on real people
Over the last few days these announcements about cuts to welfare have left disabled people and those with long term health conditions worried about their future. We already know that disabled people, or those who live in a household with a disability, are disproportionately more likely to be in poverty. These are the very people who cannot easily find work to increase their income, people who should be protected by the State. There will be as many as 3.2 million families who will be hit by welfare cuts by 2030, government analysis shows.
Many of the announcements are still in their proposal stage, which means they are subject to change. Christians Against Poverty (CAP) will continue to feed in the views of clients and low income households, to illustrate the impact of these cuts on real, vulnerable people.
