CPAG’s response to the Autumn Statement announcements
CPAG’s Autumn Statement briefing covers:
- Local housing allowance
- National insurance
- The minimum wage
- Changes affecting self-employed people
- Changes to the work capability assessment
- Employment support, conditionality and sanctions
- Tackling fraud and error in the benefit system
The chancellor has done the bare minimum that is needed to prevent faster rises in child poverty. There are 4.2 million children living in poverty in the UK today. Ensuring benefits catch up with inflation, and increasing local housing allowance (LHA), will come as welcome news to the millions of families on the lowest incomes who have been left worried sick as speculation about benefit cuts and freezes played out in the news. Increasing these benefits should never have been in doubt, and we urge the government to ensure benefit uprating is placed on a statutory footing to avoid this process being repeated in future years.
Analysis from the Office for Budget Responsibility, published alongside the Autumn Statement yesterday, shows that living standards, as measured by real household disposable income per person, are forecast to be 3½ per cent lower in 2024-25 than their pre-pandemic levels. This represents the largest reduction in real living standards since ONS records began in the 1950s.
This reality is being felt by low-income families up and down the country. The chancellor was keen to tell us that work is the most effective way to raise living standards for families, but 71 per cent of children in poverty live in working families. Help with moving into work and to work more is only one part of a package of measures that are needed to support low-income families who are facing increased pressure on their household budgets now. Furthermore, the ‘back to work’ package announced in the Statement will do little to meaningfully support parents and carers back into work, instead it will heap more pressure on to low-income families already struggling – many of whom are managing complex health conditions or disabilities alongside raising a family.
The government could have made a different choice yesterday, to tackle rising levels of child poverty in the UK and invest in our children. Disappointingly, it did not make that choice. Instead of tax cuts that will boost the incomes of richer households, the government could have increased child benefit, expanded free school meals, and abolished the two-child limit and the benefit cap. This would have immediately lifted a million children out of poverty as well as ensuring that all families are provided with a basic level of support to help with the costs of raising a child.