JRF responds to the Comprehensive Spending Review

Responding to today’s Autumn Statement and Comprehensive Spending Review, Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, said:

“We are of course pleased to see that George Osborne has responded to concerns about Tax Credit cuts and a lack of affordable housing in today’s speech. After taking steps to tackle low pay with the National Living Wage in the Summer Budget, it’s good to see that the Chancellor is now providing extra money for house building. However, focussing Government support only on homes for sale will do nothing to help anyone who is not able to save a deposit or get a mortgage. Even so-called ‘affordable’ home ownership is out of reach for low earning households – fewer than three per cent of new social tenants could afford a starter home or shared ownership property.

“Cancelling the Tax Credit cuts will be welcomed by low-income working families in the short-term. But many working families will still find themselves worse off due to upcoming reductions to Universal Credit. By 2020, families with children will be better off only if both parents work full time on the National Living Wage – something only a small minority of families can manage.

“While allowing up to £2 billion more for social care will help to ease the funding shortfall in some regions, choosing to do this through Council Tax will risk creating a two-tier system where good care is only available in wealthier areas or to those who can pay for it.

“To create a long-term, sustainable path towards a prosperous and poverty-free UK, businesses, employers and local leaders must work with central Government to tackle low wages, high costs and create more genuinely affordable housing to rent as well as own.”

JRF has analysed the impact of changes to Universal Credit, the National Living Wage and new childcare element on the living standards of families on low incomes to 2020.

Minimum income standards in 2020