Response to Chancellor’s Autumn Statement.
We welcomed the decision in the recent Autumn Financial Statement to maintain the previous commitment to uprate social security rates to the agreed measure of inflation, as well as the commitments to uprate pensions as expected. Keeping to existing uprating promises allows people to better plan.
We regret that there were no additional measures to deal with increased energy costs. We note that with last week’s energy price cap increase, the cost of heating is likely to be more expensive for households this winter than it was last year.
The government announced that national insurance rates for employees will be cut by 2% points from January 6th, 2024. We welcome this measure. We welcome that it has been brought forward from what would be a more usual April deadline for a tax change, as any modest uplift to people’s wage packets is going to be very needed in January.
We also welcomed the re-announcements of the increase to the National Living Wage from April, and the inclusion on 21- and 22-year-olds for the adult rate of the National Living Wage. We continue to call for the rate of the National Living Wage to be that of the Real Living Wage.
The plans to toughen the Work Capacity Assessment and any expansion of the benefits sanctions’ regime is a very real concern for us. We do not think this will increase the numbers of disabled people or people with local term illness’s rates of participation in the labour market. It will though make many vulnerable people much worse off. Instead, we think improvements to the support available, a more flexible benefit system, improvements to the occupational health and employer support arrangements would be more effective in supporting people re-enter or remain in the labour market. We also think that the current system of ‘fit notes’ (sick notes) needs significant overhaul, along with the financial support available for people temporarily unable to work due to sickness.
We are concerned that the funding for most government departments has not been increased to take into account inflation, meaning an effective cut to such important services as local councils.
We welcome the decision to increase the rates of the Local Housing Allowance ‘pegging’ so that an earlier reduction has been reversed. We note the announcement that this will be frozen in 2024/25. We think this ‘stop start’ approach to the support available to people meeting housing costs is very problematical and is a source of instability in an already dysfunctional private rented housing sector.
We continued to be concerned about the delays in meeting the previous promises to reform Section 21 (No fault evictions). The lack of security that private tenants face is a real injustice and has a significant adverse impact on family life for very many people. It also is a significant cause of homelessness and subsequent pressure on local authorities.
We are concerned to see that the Household Support Fund is ending. We think that although this is not perfect, it should be maintained (in fact it should be increased) until the government can bring forward more sustainable and effective arrangements to support local councils to deliver local welfare assistance schemes.
Tom Togher
November 2023.