Budgets are defined as much by what’s missing as by what’s in them, and Jeremy Hunt’s Spring Statement had some gaping holes in it when it came to children and families. No Chancellor can please everyone, there are always winners and losers, but given the scale of the cost-of-living crisis, bold action is needed.
There were welcome measures, from extending the Household Support Fund by six months to reducing debt repayments. The childcare reforms feel like we are incrementally reaching a better system, though there is still much to be ironed out in terms of investment. Mostly though, this was a Budget that tinkered round the edges.
The appalling fact remains that four million children are in poverty – that's 9 children in an average school class of 30. This means poor living conditions, not enough or inadequate food, fewer clothes, and less heating for the country’s youngest. It means books and paper might be scarce at home, children might be sharing beds and getting little sleep.
WHAT THE CHANCELLOR COULD HAVE DONE
To make a positive change for children the Chancellor could have committed to Save the Children’s policy of a “child lock”. This would raise benefits in line with inflation or average earnings, whichever of the two is higher, annually. This could help families when the economy is growing. In time, other areas of UK Government spending on children, such as education or child mental health or education, could be “locked” to make sure rises are always keeping pace with the economic climate.
Scrapping the cruel sibling tax, also known as the two child limit to benefits, would lift 250,000 children out of poverty, for a fraction of the cost of the tax cuts announced in the Budget. Child benefit, which is around £25 per week for an eldest child, will be paid in full to eligible parents paid earning up to £60,000 a year by 2026. This will draw thousands of children into the system for the first time and put more money in families’ pockets.
THOSE ON LOWEST INCOMES WERE OVERLOOKED
But for those on the lowest incomes, they were overlooked. Inflation might be decreasing but it is still high and rising. Food inflation was 7% in Jan 2024 and household inflation which was 5% in December, is still higher than the standard CPI inflation (4.2%). Parents on low incomes are set to make barely any gains from the 2p National Insurance cut.
The average annual benefit will be between £3 and £20 for the bottom 20% of households; £344 for an average household; £912 -1006 for the top 20% of households. Families on the lowest incomes have been given cost-of-living payments but they are still suffering deeply from the economic crisis. National Insurance cuts will cost the Treasury £10bn and make no perceptible difference to child poverty rates.
According to the Resolution Foundation, real wages are only expected to reach 2008 levels in 2026, and public services are looking at a 2.3% cut according to OBR. This will likely have a huge impact on local councils who are already struggling with cutbacks since 2023 and will lead to more councils closing vital services for families.
The current UK Government doesn’t have many chances left now before the next election to try support those living in poverty. The UK will have the first parliament in modern history to see a fall in living standards. This is a choice, not a necessity. For all the economic challenges, politicians can and must do more to ease the pressure of the cost-of-living crisis and enable children and families to thrive.
