The days and weeks before budgets or autumn statements are always rife with speculation and rumours. Journalists, policy wonks and charities feverishly try to work out what might be coming. We attempt to distinguish between the measures being briefed out in advance: which will be abandoned—or increased in a flourish—on the day, and which are just wishful thinking or attempts from within government to push the chancellor in one direction or another. It’s sometimes easy to forget that there are millions of people in the country for whom government announcements are not theoretical or merely intellectually interesting—they will determine whether they will be able to afford to eat properly, to pay the bills, to buy their children shoes that fit and stave off homelessness.
This year, the stakes were especially high. Between April and September, food banks in the Trussell Trust network had to provide 1.5m food parcels—more than ever before and 16 per cent higher than the same period last year. That’s especially worrying since last year had previously been the worst on record, with a 37 per cent rise on the previous one. And we know that the people who come to food banks are only the tip of the iceberg. Millions more people face hunger but haven’t yet turned to food banks for help. In fact, the majority of people on Universal Credit can’t afford essentials, including sufficient food. The level of benefits has fallen so low that over the summer health leaders wrote to the prime minister to say that the situation poses a grave risk to the nation’s health.
Against this backdrop, we kept hearing that the chancellor might implement a real-term cut to benefits. The idea that the dire situation we are already facing might be made even worse by reducing the incomes of some of the poorest people in the country felt unimaginable, and yet all too possible.
It was an enormous relief to find that the rumours were not borne out. The chancellor confirmed that benefits will rise next April in the usual way, by the September inflation level (6.7 per cent). He went further—increasing Local Housing Allowance (which many people on low incomes rely on to help pay rent) so that it will once again cover the cheapest 30 per cent of rents in every area. Local Housing Allowance has been frozen since 2020, while rents have soared, and this gap has been a major driver of rising homelessness, increased hunger and people being forced to turn to food banks to survive. Together these two measures will cost the government around £4.3bn a year—£1.3bn for the Local Housing Allowance rise, plus an estimated £3bn, which they would have saved if they had gone ahead with rumoured plans to uprate benefits with the lower October inflation figure rather than the September one—a significant investment at a time when there are immense pressures on the public finances.
This is very welcome news, but the lead up to the autumn statement showed once again the vital importance of the government embedding an essentials guarantee into the social security system, so decisions about uprating can be made with reference to the realities of people’s lives and the costs they face, rather than having an annual debate shaped by the politics of the day.
These were the big headlines in the autumn statement, along with a bigger than expected cut to national insurance for both employees and the self-employed, and a major package of cuts to business taxes. Under the surface, however, there were measures which are less visible but highly significant, and some importance omissions.
The “Back to Work” plan was announced last week, with the details and spending confirmed in the autumn statement. There is much to welcome about this plan, which is focused on the rising numbers of people out of the labour market due to ill health or disability and on those who are unemployed for long periods. The government intends to invest around £1.3bn on employment and mental health support over the next five years. However, alongside this there were worrying moves to ramp up sanctions and tighten access to disability benefits. Planned changes to the changes to the Work Capability Assessment risk significantly reducing incomes and increasing hardship among disabled people, damaging their health further and making it more difficult for them to find work. The government has made some changes to these plans following a recent consultation, but most remain in place. We are very concerned that the proposed changes won’t achieve the goal of helping people into work, and will push more disabled people into destitution.
Disabled people and long-term sick people who make new claims for UC will find it harder to be assessed as having limited capacity for work or work-related activities. They will therefore lose £390 a month and be subject to a harsh conditionality and sanctions regime. The changes don’t appear to be taking effect until 2025 (after the next election) but if they continue as planned, the Office of Budget Responsibility estimates that it will mean 371,000 fewer people being protected from sanctions and receiving the higher level of benefits by 2028-29. It also estimates that the changes will only result in 10,000 people moving into work.
There were also several worrying omissions from the speech:
- There was no mention of raising the level of the “benefit cap”, meaning more households may face their benefits being capped (especially in high-rent areas) before they are able to access further support with their rent.
- The chancellor did not confirm that Local Housing Allowance will now continue to rise to keep pace with rents, leaving the possibility that it will be frozen again after this year, reigniting the spiral of homelessness and hunger that we have seen in recent years.
- The Household Support Fund was conspicuous by its absence. Since October 2021, this fund, delivered through local authorities, has been an important lifeline for people facing hardship, hunger, and unexpected costs. We have strongly welcomed the investment the government has made over the past two years. However, funding is currently due to run out next March. The government urgently needs to clarify the future of the fund. Without any further investment committed, there will be a gap in the level of support available to people facing financial hardship that neither local government, nor charities, will be able to fill.
Taken as a whole, the autumn statement allows us to breathe a (qualified) sigh of relief. Benefits will not be cut and many renters will get more help. We should not underestimate how much work it took by those in government as well as those outside it to achieve this outcome.
However, the announcements today will not fix the underlying problems that have led to record numbers of people facing hunger and having to turn to food banks. Even with the increase for inflation, Universal Credit will not meet the costs of the essentials. People on the lowest incomes are still facing impossible situations, with a rising tide of hunger and debt pulling more people under every year. We need to take a step back and build a shared vision of a better society. One where everyone can rely on a social security system that will protect them from hardship and enable them to thrive. Where work pays enough to live on and provides security, dignity and purpose. Where the housing market delivers homes—affordable, healthy and secure. A society where no one has to rely on a food bank just to get by.
