A Budget for big earners and big owners - JRF

Responding to the Chancellor’s Budget, Paul Kissack, Chief Executive of the Joseph Rowntree Foundation said:

“This was a Budget for big earners and big owners. Prioritising capital gains tax cuts for owners of multiple properties is an insult to almost four million people facing destitution in the UK today.

“The Chancellor stood up at the despatch box today and announced a short term patch up of his government’s own failed systems. He was right to extend the household support fund, which has given essential help for some families at difficult times. But extending a temporary support scheme for a paltry six months doesn’t equate to fixing the fundamental problem that made its existence necessary.

“The Government is right to acknowledge that deductions from Universal Credit which leave 97% of low income families affected by these loans having to go without essentials are driving hardship in this country. They are right to take action on this dire situation, but they must now commit to a fundamental change in our social security system which guarantees that people can always afford the essentials.

“Cutting national insurance gives you an eye catching headline but doesn’t fill the gap for the millions in our country experiencing deepening poverty. For the people struggling to afford the rent or the weekly shop, or having to visit a food bank, that widening gulf is all too real”.

Findings from JRF’s pre-Budget analysis:

• The cost of essentials was ranked the number 1 concern by the public (64%), and 90% of the public thought that government had at least some responsibility for these prices.
• 73% of the public thought that government had complete responsibility for funding the NHS and 57% thought the same for other public services.
•  When excluding those who own their home outright, more people rank housing as a top concern than the NHS
• The NHS and other public services were in the top three areas the public is most worried about, alongside essentials. Worries about income from investments and the tax paid on them ranked firmly at the bottom of the public’s concern

Notes to Editors

1. Around 900k families on UC are repaying a Budgeting Advance - around 40% of families with a deduction. The average deduction from UC for Budgeting Advance is £41 a month. So, extending the repayment period from 12 months to 24 months should reduce the average deduction each family faces by around £20 a month.

2. Polling is from a UK representative sample of 4,737 people carried out by YouGov on 1-5 February 2024. More details here.

3. More details on levels of destitution in the UK here.
4. The Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials. Developed in line with public attitude insights and focus groups, this policy would ensure everyone has a protected minimum amount of support in Universal Credit to afford essentials. It would enshrine in legislation:
5. a legal minimum in Universal Credit: the standard allowance would need to at least meet this amount, and deductions (such as debt repayments to government, or as a result of the benefit cap) would not be allowed to reduce support below this level;
6. an independent process to regularly recommend the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household items) for the adults in a household (excluding rent and council tax).