Yesterday was the first budget from our newly formed coalition government. It can’t have been easy negotiating policy with two parties who have very different views on various aspects of social and economic policy.
I listened carefully at lunchtime to a list of cost cutting measures intended to help the country out of it’s massive debt. There is no doubt that the deficit must be cut, that expenditure must be cut and that in order for the country to get back on its feet we are going to have to brace ourselves for a period of austerity. Obviously I am not qualified or sufficiently intelligent to give a detailed breakdown of the minutiae of the budget, but there are a few things that interested me, mainly because either they will effect me directly or I have some experience of them. This is a budget that could really hit lower income families and single parents.
It’s absolutely wrong that people earning as much as £80,000 a year were still entitled to a degree of Working Tax Credit and it’s right that it should be limited to families who really need the help.
It’s great that the Personal Tax Allowance has been increased to £7,475
Child Benefit should be means tested as well, as it is preposterous that wealthy families should get money from the government when they can fully support their children. If this was the case, maybe it wouldn’t be necessary to freeze Child Benefit for the next three years.
Benefits may rise in line with consumer prices but restricting Housing Benefit to £400 a month will see many families in genuine hardship. In Market Harborough District for example, the Social Housing waiting list is four and half years long and one’s only option is private renting. In the unlikely event of a family finding a house for £400 a month, actually moving house costs a fortune and there is limited help available to cover the agent’s fees, deposit and a month’s rent in advance. There is the added problem that a private landlord can ask a tenant to leave with a couple of month’s notice and if the family has been there less than a year, then it is unlikely that they will have paid off the government loans and will therefore not be eligible for any more help. This could have catastrophic consequences for vulnerable families.
They have announced that single parents will be obliged to seek work as soon as their youngest child starts school. This is fine if either you have a job which pays enough to cover child care costs and/or you have family living nearby who can help out on a regular basis. The reality is that I don’t know a single family with young children where either both parents or the single parent go out to work, who don’t have the grandparents taking up the slack. Help towards childcare costs is available for a period of time, but even with Tax Credits, this still means that most single people will be significantly worse off and I don’t understand why the government is happy to contribute towards someone else looking after your child when, for most single parent families, (and I would argue, most families) it would provide more stability and security for the children to have a parent at home.
Now don’t get me wrong, I think we are extremely fortunate to live in a society where the vulnerable and the poor are supported by The State. Income Support, Child Tax Credit and Child Benefit provide just enough money to live on, particularly if one is good at housekeeping, although there is little left over for after school clubs, or other enrichment activities for children and certainly not enough to run a car which can crucial in a rural area.
But the needs of single parent families and the needs of single unemployed people are radically different. Some of the solutions may be the same, for example education or re-training but the ethics and reasons for getting them back to work are far more complex.
Poverty is catching. Children brought up in poverty are going to have completely different expectations of life and themselves than their wealthier counterparts. A child brought up in a family who has never worked may not see a job as a cultural or economic necessity. We also have to live with the fact that there is a proportion of the population who is unemployable and that there are families who, no matter what incentives are offered, will still be crappy parents with crappy values, launching crappy children into the world. But there are others, for whom life may have taken an unexpected turn, who just need a bit of help, a bit more preparation and training for returning to work – when it is economically practicable, sensible and, above all, right for the children for them to do so.
I would be very interested to hear how and if The Budget has affected you.
Wartime Housewife 
I don’t think The Budget will affect us that much. I was worried that child benefit would be cut or stopped for children over 13 (just when they start eating you out of house and home!). A freeze on child benefit I can cope with. As a mother of 3 it represents a sizeable chunk of cash. However, I do regard it is my personal pocket money which is proof that our family does not actually need it and good reason to make it means tested.
Interesting thoughts WH, thank you.
As I understand it, the cost of means-testing child benefit would be prohibitive, which is why they went for the easier option of simply freezing it. I would imagine that the aim is to freeze it for so long that people get used to a paltry level, ready for when they want to scrap it completely.
The issues about childcare and single parents are very very true. I do wonder, though, if this might gradually cut down on the incidence of voluntary single parenting, because it becomes uneconomic. I don’t believe all single mothers became pregnant in order to get a house, as the Daily Mail seems to believe, but on the other hand far too many couples break up because it is easy to do so and “the social” which pick up the slack.
Like Sue, I won’t be hugely affected by the Budget, for which I am grateful. My thoughts go out to those who will.
I think it quite likely that this will bring rents down, in fact, although your point about the costs of moving is well made.
I was a single parent with no family nearby, and had to pay for all child care myself – it was tough, but I did it. I won’t say that the state makes it too easy … there’s no way I could begin to see how to live on what they pay out, but I’m not sure “society” should be paying for families with a lot of kids who won’t work; I do think benefits should be capped in those situations.
There needs to be some sort of sliding scale with the work/benefits balance so that if someone can get a job, they are still helped rather than having everything cut off because they’ve earned a fiver more than their benefit level allows.
Damn – I sound like a Daily Mail reader, and actually I’m a woolly lentil knitting liberal.
Hi WH
I just wanted to point out that housing benefit has reduced to a maximum of £400 per week, not per month. I still think this is rather a lot I’m afraid.
Donna
Welcome Donna and thanks for pointing that out – it does rather change the complexion on things. Out of interest were you meaning that you think £400 a month is a lot?
Not as tough a budget as I expected, I would sooner take all the bad medicine in one go so I hope we don’t have a ‘budget from hell’ part 2!
The housing benefit is £400 a week, not a month, so I don’t think it will affect as many people.
In the short term the budget probably won’t make that much difference to me – but then it’s the usual thing that if you have enough (which I do, at the moment) then these types of cuts are annoying, but if you are close to the edge financially then they are potentially crippling.
I think I’m having my pay frozen for two years, which makes very little difference – it’s been more or less frozen for the last two years anyway. My – slightly notional – pension is going to be reduced and I’m going to have to pay more into it. I think we’re losing the child tax credits. Obviously everything is going to cost more.
In the longer term, of course, the outlook for anyone employed in the public sector is fairly bleak.
The particular measures you highlight – the cap on housing benefit and the requirement for single mothers to look for work when their youngest child starts school – strike me as simply vindictive and symptomatic of an ignorance of what it is like to live like this.
I’m very doubtful, incidentally, that cuts on anything like this scale are “unavoidable”, or are likely to produce the results that G.O. (or whoever is advising him) appears to think they will. I’m no economist, but here is certainly no unanimity on this point, as we are sometimes led to believe.
Thank you to everyone who pointed out that Housing Benefit has been capped at £400 a week – this is what comes of blogging late at night and trying to read small print in a gloomy room!
There have to be questions asked about why someone on a low income goes on to have so many children that they require a house costing £1,600 per month, but that REALLY is a subject I’m not prepared to tackle.
Hello
Thanks for the welcome (I’m an avid reader!). I meant that £400 per week is still rather high in my opinion. Apparently these measures are to stamp out ‘mansion benefit’ where some families have claimed up to £140000 per year. Thats an eye-watering £11k+ per month! Like you I think it’s not an easy subject to tackle but think these new measures ar at least a step in the right direction.
Hello there.
imho there needs to be a way of separating out those who “need a helping hand” as you so rightly put it, and those who magically produce another baby as soon as their youngest child reaches the age when Income Support ends. However, that would take us into the realms of civil servants being given the right to make value judgements – not the kind of world I would want to be a part of!
The solution is probably out there, just a bit too far out of my reach, I’m afraid!
I agree Project50, and it’s not a job I would want to take on either. It must be a heck of a task for those who have to deal with all the claims amd a remarkable job is done in the circumstances. Our benefits system is flawed because it is run by people, for people, but I would rather a few people slip under the net in the interests of the common weal.
I saw that a banker in the city was “relieved” that the bank levy wasn’t as high as they expected and that the budget wouldn’t impact on his life. Good, I’m so pleased the poor bankers are OK, it’s a small price to pay to send non voluntary single mothers back to work when their last child goes to school, to freeze Child Benefit (most of which is paid to the mothers) to cut the Maternity Health Grant altogether. City Boys are OK, single mums are the easy target. I so could get my feminst cap on now, but I will resist the urge! Male politics for a male economy blah blah rant!