Fixing the foundations includes ending poverty

Victoria Winckler, Director of the Bevan Foundation, says the Autumn budget has neglected the poorest in society – the Welsh government must not follow suit. 

The Autumn Budget 2024 has been swiftly dubbed a ‘tax and spend’ budget – hardly surprisingly since taxes went up by the largest amount in 30 years and £70 bn in public spending was announced.  The UK Government’s rationale was to get public finances on a firmer footing, begin to repair public services, and kickstart economic growth – ‘fixing the foundations’ as we heard rather a lot.

But the UK’s foundations are not just its finances, nor its infrastructure, nor even its public services, important though these are. The foundations include its people – people who live on incomes below the poverty threshold as well as investors and entrepreneurs – and people in poverty were conspicuous by their absence. 

Some welcome news

The budget did have offer some welcome news to people on low incomes.  As the Bevan Foundation’s analysis shows, the increase in minimum wages will benefit more than one in ten people in work in Wales. The increase in state pensions, limiting the impact of benefit deductions and raising the earnings threshold for carers will also ease the pressure on low-income families.

Much left undone

But these changes pale into insignificance against what has been left unchanged: children being denied social security benefits simply because they’ve been unlucky enough to have two siblings already; private renters struggling because in DWP-land rents haven’t gone up whereas in every city, town and village they have soared; and sick and disabled people wondering when their share of a £3bn cut in benefits will hit.

Tough decisions

Most analysts recognise that the UK’s government ‘faced a genuinely difficult inheritance’ and that tough decisions needed to be taken to raise revenue and get a sluggish economy moving. But future economic growth – and there’s some doubt about whether that will occur – does not necessarily do anything to reduce poverty. It is entirely possible that most if not all economic gains go to shareholders or to high earners, without a single penny reaching low-paid workers or people who rely on benefits because they are too sick to work. 

Like all budgets, this budget was about choices. And here’s what has been chosen.

For the same cost as freezing fuel duty – around £3 billion – the Chancellor could have lifted the two-child limit on Universal Credit – around £2.5 billion – and had change left over to lift the Local Housing Allowance rate to the 50^th percentile.  The interests of Mondeo man have trumped those of the UK’s poorest children. 

The Welsh budget must be different

I have previously suggested that where the UK Labour government goes, the Welsh government is likely to follow.  With the Welsh budget another 6 weeks or so away, let’s see how different the Welsh budget is from its UK counterpart. The extra £1.7 billion to spend eases the pressure, giving the Welsh government wriggle room to do things differently.  Yes, public services desperately need funding and so too is there an urgent need for investment in infrastructure. But the foundations of Wales are its people, and one in seven of us cannot even afford everyday essentials like heating and food.  The Welsh government must fix this foundation as well as the others, and invest in ending poverty too.