Budget 2021: JRF responds to the Chancellor’s speech

Today’s Budget and Spending Review is a positive step for low-income families in work, according to the Joseph Rowntree Foundation (JRF), but it will not benefit those who cannot work, such as disabled people and carers.

The Chancellor Rishi Sunak announced over £6m of funding for the Department for Work and Pensions (DWP) to help people earn more and gain skills over the next three years, as well as a total increase of skills funding by £3.8bn compared to 2019-20, an increase in the national Living Wage to £9.50, and a cut to the Universal Credit taper rate.

Katie Schmuecker, deputy director of policy and partnerships at JRF, said: ‘This is a tale of two Budgets for families on low incomes. For those in work, the change to the taper rate and work allowance, alongside the National Living Wage increase, are very positive steps, allowing low-paid workers to keep more of what they earn. Together these measures improve our social security system for working families and demonstrates a serious intent to turn the tide on the pre-pandemic trend of rising in-work poverty.

‘But the reality is that millions of people who are unable to work or looking for work will not benefit from these changes. The Chancellor’s decision to ignore them today as the cost of living rises risks deepening poverty among this group, who now have the lowest main rate of out-of-work support in real terms since around 1990.

‘Among the people in our society who cannot work are cancer patients, people with disabilities and those caring for young children or elderly parents. Their energy bills and weekly shop are going up like everyone else’s and they face immediate hardship, hunger and and debt in the months ahead. The Chancellor had an opportunity to support families on the lowest incomes to weather the storm ahead, and he did not take it.’

In related news, in today’s Budget and Spending Review, Rishi Sunak has announced funding to build affordable homes, improve skills and wages, and level up transport.

Photo by Michael Longmire