Opinion: The Spring Statement failed the working poor

Our writer claims the Tigger-like Chancellor has completely let down people who are in work but in poverty.

The Spring Statement failed to help the people that the Government claims are a priority.

Worse, it barely even mentioned them.

It was never going to be a particularly exciting financial event, but I had hoped it would take some steps to support the poorest, who face a daily struggle to get by.

A record 60% of the people in poverty in the UK live in a household where at least one adult is in work, according to a study published last year by Cardiff University.

It found that the risk of poverty for working families has grown by a quarter in the last 10 years alone.

The Spring Statement delivered to the House yesterday was not intended to be a major fiscal moment of the kind favoured by George Osborne, but rather a subdued statement of our nation’s finances and direction.

I do understand that it was not intended to launch any major changes to British economic policy.

But it could have been an opportunity to make changes that would have helped the country’s poorest, to show them that they are a priority and that the Government does care about their lives.

Instead, it was completely missed.

Now read: We missed out on £10k because we didn’t know it was ours

The just-about-managing

I know that people go into politics in order to help people, yes even the politicians I disagree with. But this Government has repeatedly promised to help the working poor only to repeatedly let them down.

And this latest statement is just the latest missed opportunity to do more for the so-called just-about-managings (JAMs).

When Theresa May stood outside Downing Street in 2016 and made her first speech as Prime Minister, she made the following pledge: “If you’re one of those families, if you’re just managing, I want to address you directly.

“I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle. The Government I lead will be driven not by the interests of the privileged few, but by yours.”

That is an admirable goal but very little has been done to actually support those trapped in working poverty in the UK.

It should be a spending priority and yet the Spring Statement once again missed the chance to make good on the Government’s goals.

Little light at the end of the tunnel

Working poverty is a real problem in the UK and no amount of cheery optimism from the chancellor can disguise the fact that many people are struggling to cope in the current financial climate.

The Office for Budget Responsibility (OBR) has forecast that average earnings will in real terms still be below their 2008 level by 2023.

That means we will have endured a decade and a half of weak wage growth, despite high inflation, frozen working-age benefits and cuts to tax credits.

People have become steadily poorer and those on the breadline risk dropping under it.

Now read: Beware the product-testing scam

“We know low-income families have faced huge sacrifices as part of efforts to tackle the deficit,” says Campbell Robb, chief executive of the independent Joseph Rowntree Foundation (JRF).

“Cuts to tax credits alone – which ease the constraints low pay places on families – have left a working couple on the National Living Wage with two kids £600 a year worse off since 2010.”

The Cardiff University study showed that in-work poverty was disproportionately concentrated on people and families living in private rented accommodation.

That’s likely down to the twin pressures of rising rents and a cap on housing benefit.

Dr Hick, one of the study authors, warned: “Our research finds that housing costs are becoming an increasingly important factor in determining poverty rates amongst working families.

“If policy does not do more to tackle rising housing costs directly, then it seems likely that these will eat up gains made elsewhere – for example, in terms of the planned increases in the minimum wage.”

Yet nothing was done or proposed or announced in today’s statement that would help those households.

So what should Hammond have done?

It's not as if there aren’t ideas for improving the lives of those in working poverty.

The JRF’S Campbell Robb suggests: “We share a moral responsibility to ensure that everyone in our country has a decent standard of living and the same chances in life.

"The Chancellor had the opportunity to loosen the constraints of poverty by allowing struggling families to keep more of what they earn under Universal Credit.

“We urge him to put things right for struggling families by restoring work allowances in Universal Credit. This would boost living standards for three million families and prevent 340,000 people being swept into poverty.”

And the Cardiff University study suggested that affordable childcare for families with children would make a real difference to helping families with children take up additional paid employment.

It also called for cuts to tax credits to be reversed to ensure that low-income households have support, and also for steps to be taken to tackle high housing costs – particularly within the private sector.

Such steps would help ensure that poverty doesn’t wreck the life chances of children in low-income families. It would keep many people from falling below the poverty line and it would assist workers in being able to earn more and provide a better standard of life for their families.

Instead, we got jokes about Eeyore and pretty much no real change for the JAMs – not even plans to consult on changes that could be brought about in the Autumn Budget.

That’s why I say that the Spring Statement failed the working poor and, in doing so, failed to support the Government’s stated goal of helping hard-working families help themselves.

Now read: The financial security gender gap

What do you think? Did the Spring Statement fail to deliver or was it exactly what it was meant to be: an update on the nation’s finances? Have your say using the comments below.