OPFS response to UK Chancellor’s Autumn Statement 2023



On November 22nd, Jeremy Hunt announced his Autumn Statement, setting out tax and spending plans for the year ahead.

In response to the Chancellor’s Autumn Statement today, Marion Davis, OPFS Director of Policy, Strategy and Communications said:

“Social Security is not just a safety net; it should have a role in preventing poverty across the lifecycle and be seen as an investment in family health and wellbeing. Poverty grinds people down and means they are less not more likely to progress into and in paid work.

“We are pleased with the decision to raise working-age benefits by 6.7%, in line with the September CPI figure. However, we are extremely disappointed that the Autumn statement has not recognised and reversed the devastating impact of the two-child limit and benefit cap policies and the injustice whereby parents under 25 years receive less benefit just because they are young.

“People can’t continue trying to get by on social security benefits that are so far below the cost of the essentials of everyday life. We need an ‘Essentials Guarantee’ to be embedded into Universal Credit, so decisions about benefits can be made based on how much the essentials of life cost.

Increasing the Local Housing Allowance is welcome particularly for single parent families who for far too long have received a contribution to rent which doesn’t meet their actual housing costs, but more will be required if support in universal credit is to keep up with rising rents.  This will go some way to helping single parents renting at the least expensive end of the market, but during the current housing emergency, most property available to rent privately will remain unaffordable to low income households, forcing many single parent families to move to unsuitable accommodation.

The increase in the govt's legal minimum wage to £11.44 is good news but the rate is not the same as the independently calculated real Living Wage which is £12 so worth £1092 a year more to a full-time worker.

- Marion Davis,

The increase in the government’s legal minimum wage to £11.44  is good news but the rate is not the same as the independently calculated real Living Wage  which is £12  so worth £1092 a year more to a full-time worker. Moreover the Resolution Foundation  highlight that for minimum wage earners on means-tested benefits (particularly those with children), the legacy of prolonged high inflation, falls in support through the benefit system, such as the benefit cap , 2 child policy  and frozen tax thresholds will offset this increase in their pay.

The cut in national insurance will increase take-home pay for some, but not for those whose income is already too low to benefit from it, nor for those on low incomes for whom it simply reduces entitlement to universal credit.

We are also extremely worried about the impact of the recent changes to Universal Credit conditionality which will require lead carers with children aged 3 to 12 years to be available for up to 30 hours of work a week. This policy disproportionally impacts single parents, and those in lower income groups. Single parents face greater rates of unfair sanctions, and this policy is likely to increase it further.

Challenges must be tackled to deliver a fairer society for and with women, especially mothers, who experience multiple, systemic inequalities.

The Autumn Statement says “claimants will be required to accept a time-limited mandatory work placement or take part in other intensive activity … If a claimant refuses to accept these new conditions without good reason, their Universal Credit claim will be closed” This is draconian and moves our UK welfare to work approach into an intensification of a workfare model as opposed to a more human capital approach.

We have grave concerns about the impact of benefit conditionality and sanctions on the well-being and rights of children, who may suffer from hardship, destitution, stress, and stigma as a result of their parents or carers loss of income. Punitive benefit penalties should be scrapped.

Single parent families are major users of public services, we are extremely concerned about cuts which will come down the line to fund the tax cuts announced by the chancellor. The Resolution Foundation note that the spending power of unprotected departments will take a 16% cut over the next five years, “which would mean austerity-level cuts being implemented at a similar pace to those overseen by George Osborne in the early 2010s.” (Glasgow University estimates that 335,000 excess deaths were attributable to austerity between 2012-19.) The Institute for Government warn that “after a decade of budgetary constraint the Chancellor “has abdicated his responsibility for public service performance.”

For many of the parents who contact us in crisis, it is paying for energy to keep their family home warm that causes so much desperation. While raising benefits in line with inflation is positive, it does nothing to directly reduce energy bills. National Energy Action say that “an average household is now paying £800 more per year to heat and power their homes since the start of the energy crisis.” Yet, the Autumn Statement did nothing directly to help. It fails millions of the poorest children who live in cold, damp homes.

Neither has the government delivered on its promise to consult on a social tariff for the poorest energy consumers. There was also no news on energy efficiency which is the key to reducing energy bills.

In the longer term , beyond dealing with the immediate crisis facing families, we support the call by JRF and the Trussel trust for the UK Government to introduce an Essentials Guarantee   which would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials

OPFS is a member of the Scottish Government expert group which is developing proposals for a Minimum Income Guarantee   with representation from academia, the trade unions, poverty and equality organisations. The aim of a Minimum Income Guarantee is to provide everyone in Scotland with a minimum acceptable standard of living ensuring people have enough money for housing, food and essentials and access to universal services such as childcare to allow them to live a decent, dignified healthy and financially secure life. It has potential to deliver transformational change, reduce poverty and inequality.

Alongside this, it’s essential to redress the systemic inequalities embedded into our economic system, which must include the introduction of a progressive tax system and a just transition to meet our commitments to net zero.

Challenges must be tackled to deliver a fairer society for and with women, especially mothers, who experience multiple, systemic inequalities. These changes require political will, which the Budget Statement shows is in short supply.”