JRF responds to the Budget 2015

Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, said:

“The Chancellor was right to acknowledge that the British public has paid a high price for the economic downturn, with people on the lowest incomes hit the hardest. There was little in today’s Budget to enable those on the lowest incomes to be part of an economic recovery. Without action to tackle the root causes of low pay, the quality of work and the housing crisis, there’s a risk that people and places in poverty will be shut out of economic growth.”

Work

“Raising the minimum wage is good news for workers, and boosting apprentices’ pay while making it cheaper to employ under-21s will help young people starting out in their careers. The abolition of Class Two National Insurance will make the system fairer, giving a boost to those on lower incomes, but we would still hope to see a safety net put in place for self-employed people who are struggling to make ends meet.

“The changes to the Income Tax threshold will do nothing to help the lowest paid. The bottom 17% of earners have already been lifted out of Income Tax, meaning that they will see no benefit from any further rises. Only £1 in every seven spent on raising the Income Tax threshold further will find its way into the pockets of the bottom half of earners.

Housing

“The new first-time buyer’s ISA will give savers a step-up onto the housing ladder, but will do little to support people on limited incomes who are struggling to save at all. Addressing the chronic shortage of genuinely affordable homes while taking steps to increase quality and security in the Private Rented Sector is the only way to make prices more affordable.

Switching housing subsidies to increase the supply of homes which are affordable to people on low incomes would help to bring prices down and would lower the Housing Benefit bill in the long-term.

Public services

“Many local councils have been able to use efficiency savings to protect public services from the impact of budget reductions. The capacity to make further reductions without impacting on front-line services is now running out. Our recent research has shown that the most deprived councils have seen reductions of £182 more per head than the most affluent.

Extending the timetable for reductions to local government budgets would give councils time to redevelop services, increase partnership working and do preventative work, allowing them to deliver services more cheaply while still protecting residents.”