How will announcements made in the Budget affect migrants and disadvantaged Britons?

By Emma McClelland - 17 March 2023

Every year, the Chancellor of the Exchequer makes an announcement in the House of Commons, discussing the state of the economy and the government's plans for taxes and public spending. This annual statement, known as the Budget, has implications for all of us - with the potential to make our lives easier - or much, much harder. 

On Wednesday 15 March, Jeremy Hunt, the current Chancellor, made his Budget announcement against a backdrop of still-high inflation and a cost-of-living crisis that shows few signs of abating. While there were some surprisingly promising measures that will make a tangible difference to people's lives, we were still concerned by some of the things he said - and the things he failed to say. 

"We have one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare"

The government has clearly listened to multiple voices calling for reform of the UK's childcare system. We were pleased to hear that parents eligible for help through Universal Credit will now be given childcare funding upfront, and that the amount they can claim for childcare costs will increase to £951 for one child and over £1000 for two. It is unclear whether this will be sufficient, considering the steep increase in the cost of childcare, which is £2,000 a year higher than it was in 2010, according to analysis from the Trades Union Congress (TUC), but it is certainly a step in the right direction. 

We were also delighted to hear that the Chancellor has extended the 30-hour provision of free childcare each week, not just for 3-and-4 year-olds but "for every single child over the age of 9 months". The only downside is that this reform is being introduced in stages, so not all eligible parents of under fives will have access to it until September 2025. 

While the above measures are welcome, we would have liked to see the government follow the lead of the Mayor of London who has announced free school meals for all primary school children next year. This is a one-off emergency measure, and the Mayor has repeatedly called for the government to make meals available as research shows that hundreds of thousands of children live in poverty but do not receive them due to the government's restrictive eligibility criteria. Children of migrant families are disproportionately affected as many have limited access to support or are in precarious employment situations. 

"I recognise that even though wholesale energy prices have been falling, there is still enormous pressure on family finances"

Thankfully, it appears that the government has been successfully persuaded (well done, Martin Lewis) to delay the planned increase in the level of the Energy Price Guarantee (EPG) by three months. This will be a great relief to households. We were also surprised and pleased to hear the Chancellor's commitment to bringing the charges of those on pre-payment meters in line with comparable direct debit charges, ending "the energy premium paid by our poorest households". However, as pointed out by The Guardian's Frances Ryan, the Chancellor has rejected pleas to create a social tariff "to help the poorest and disabled pay energy bills", which means - come Winter, when usage increases - many people are likely to find themselves struggling once again.

"Sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer"

When it came to social welfare, we were concerned to hear the rhetoric used by the Chancellor as he promised to crackdown on welfare recipients. This came hot on the heels of a recent Guardian article revealing that the DWP has been ordered to release "sensitive" research into whether fining benefit claimants is effective in getting them to take a job or work more hours (evidence strongly suggests it is not). To quote sanctions expert David Webster: "It's important the policy is evidence-based. A lot of benefit conditionality is based on assumptions that claimants are lazy. The evidence does not support that."

It is also interesting that, in contrast, the government has lifted the annual pension allowance to £60,000 and removed the lifetime allowance altogether. As a policy, this provides substantial tax breaks to people who have very high levels of pension wealth. As Labour leader Sir Keir Starmer commented, it could be viewed as a tax break for "the richest 1%" that, although ostensibly offered to support the NHS by retaining doctors, indicates the "wrong priorities", especially against the backdrop of crackdowns on welfare recipients, one of society's poorest demographics. 

We also echo the concerns of other charities, including The Trussell Trust and The Joseph Rowntree Foundation, that the basic rate of Universal Credit doesn't afford people enough to buy essentials, including food and utilities. Research conducted by these organisations shows that 66% of people think the basic rate of Universal Credit is too low. According to the Joseph Rowntree Foundation: "Even with the pledged uprating of benefits, the basic rate of Universal Credit (UC) is £35-a-week short of covering the essentials for a single person, and £66 short for a couple."

What wasn't mentioned…

Conspicuous by its absence was the UK's housing crisis. We are one of many voices calling on the government to reset Local Housing Allowance rates. We believe the government should prioritise the tackling of housing as a national issue, something we emphasised in a recent research paper. The UK needs to build more houses, including social housing. And housing remains particularly inaccessible for benefit recipients.

While there is something to be said about the role of inflation and the cost of living more generally, a simple and immediate solution is to review how LHA rates are set. Most benefit claimants today know that the notion that benefits will cover even the cheapest 30% of housing costs is a matter of fiction. 

In summary, while we welcome many of the announcements made by the Chancellor this week, we still see a long way to go when it comes to levelling the playing field for our beneficiaries, many of whom require, at some time or another, Universal Credit or other benefits to keep them afloat. Others lack the ability to access these forms of support due to restrictive eligibility requirements, including immigration status, and will only gain modest benefits from the Chancellor's promised measures. There was also little for public sector workers, low-earners, or for those struggling to access housing - those our team hears from and supports every day.

Perhaps we should be thankful for the carrots within this particular pile of sticks, but - taken on their own - without a more in-depth overhaul of some of society's key systems, they are unlikely to satiate. 

To support the Work Rights Centre team as we support migrant workers and disadvantaged Britons through the cost-of-living crisis, please consider making a donation or sharing this article.

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