The Spring Statement: what does it mean for families?

What will the Spring Statement mean for working families?

Rising Costs

 

What did the Spring Statement mean for your family? If you earn just over the current NICs threshold and below around £37K you should be either slightly better off or about the same after 1st April when the health and social care levy comes in in terms of tax, at least. But if you earn under the current threshold you won’t be any better off. If you don’t earn at all, of course, there was nothing, except a doubling of emergency funds for local authorities. The household support fund is for people in England experiencing immediate financial hardship. You can only make one application and get vouchers for up to £500 for households with one child and up to £600 for households with two children or more to fund things like food and heating. The process is controlled by local authorities and the application process and eligibility criteria differ for  different local councils.

The problem is that many more people will be thrown into abject poverty due to very fast rising prices and the fact that most people’s wages are not keeping up – 1.3 million, including half a million children, according to the Resolution Foundation. Prices are rising at such a rate that the 5p per litre reduction in fuel duty will be wiped out in days.

There was no mention of Universal Credit in the statement – which was temporarily increased during the pandemic, only to be cut back again and which has not been rising in line with inflation. Benefits – and pension payments – are going up by just 3.1% while inflation is already at 6.2%.

Childcare was once again absent from the statement too, with a report earlier in the week by Coram Family and Childcare showing costs for three and four years old rose by 3.5% since last year. Those costs are likely to increase further as costs increase and many nurseries are struggling to keep afloat and some are closing. The survey found great variation across the country both in price and childcare availability. In the East of England, for instance, only 29% of local authorities reported having enough childcare for children under two, while the figure was 100% for the North East.

Worryingly, full-time places seem to have been hard hit – only 59% of local authorities report having enough childcare available for parents working full time, down from 68% last year. Lack of places will affect parents’ ability to work, or to work full time.   Also badly affected is care for children with special educational needs and after school care. All of this means many more parents could be increasingly reliant on Universal Credit.

There’s only so much a one-off payment from the household support fund can cover, particularly in places where there is greater demand.

All aspects of basic infrastructure link up. We know too, for instance, of the pandemic impact on children’s mental health. But there was no mention of schools in the Spring Statement. Yet many parents are struggling just to get their children to go to school. That too impacts their ability to work.

It’s a simple question of doing the maths. Many families are worried sick that the sums just don’t add up. We know from countless research reports before the pandemic that many were in debt and living from month to month. Yet there is a lot of wealth in this country. It urgently needs to be shared better so that the most vulnerable are not further squeezed. According to French international bank BNP Paribas’ sustainable economic barometer,  there is a danger of “social unrest, protest and extremism” in Britain because the country’s economy is one of the most fragile in Europe and its population is seriously exposed to the cost of living crisis. Its score “indicates a reduced capacity to facilitate social mobility and is a strong indicator of future socio-economic protest and instability”, said BNP Paribas. How did we allow this to happen?



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