Spring Statement 2022: A failure to prioritise support to those who need it most

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Spring Statement 2022 document © Photo by HM Treasury on Flickr

Last week, the Work Foundation set out three tests to help judge whether the measures within the Spring Statement would be sufficient to support working people through the cost of living crisis. Indeed, the Chancellor himself set his goal as being to “protect the economic security” of people across the country.

However our initial analysis reveals that, with the Office for Budget Responsibility reporting that households are likely to experience the largest drop in disposable income since 1956, the Spring Statement is unlikely to support those who need it most as inflation continues to soar.

1. Does the Spring Statement provide additional support to the workers and job seekers most in need?

The Chancellor had previously announced a package to deal with next month’s rise in the energy price cap, with about four-in-five households set to receive £150 via the Council Tax system in April, and all billpayers due to get a £200 Energy Bills Rebate due this Autumn (but to be repaid in years to come).

While today’s announcement that the Household Support Fund will increase to £1 billion is welcome, it is disappointing that the Chancellor did not adopt a more ambitious policy announcements to support low-income households, some of who are having to choose whether to heat or eat. While local council welfare support payments are appropriate for dealing with one-off or unexpected bills, they cannot provide sustainable support over the many months that people are likely to need it. Furthermore, some people may not be aware that they could be eligible for a grant, and the application process may present barriers for those who are most in need.

The priority for the Spring Statement should have been ensuring Universal Credit would rise in line with predicted inflation, to protect those most vulnerable to rising food, clothing and energy prices, many of whom are already in work.

As things stand, Universal Credit will be uprated by just 3.1% in April 2022, falling well behind Bank of England expectations of an 8% rate of inflation. In the absence of this, many more working families are likely to face hardship over the months to come. With the global uncertainty created by the war in Ukraine continuing to impact living costs in the UK, it would not be surprising if the Chancellor needs to announce further measures in the coming weeks and months.

2. Has the Chancellor announced further measures to support working families?

While a raising of the National Insurance Contribution threshold will provide a boost to low and medium income earners - saving the average employee over £330 in the year from July – in total the measures announced today are unlikely to provide economic security to the millions already struggling to make ends meet in 2022.

After all, the planned tax rise in National Insurance contributions is still going ahead, and a reduction in fuel duty on petrol and diesel by 5p per litre for the next year is likely to benefit the highest income households most in cash terms, as they are more likely to own their own cars to drive a high mileage. The promise of tax cuts to come in 2024 will do little to reassure low and middle income workers who are already facing the prospect of a real terms pay cut in 2022.

3. Has the Chancellor announced a ‘Plan for Participation’ to support those in economic inactivity back into work following the pandemic?

Although the Chancellor focused on the “strong jobs performance” and how the UK lags international competitors in adult technical skills, he did not announce new measures to tackle the 359,000 working age people (16-64) who have exited the labour market since November-January 2019/20

The absence of new measures to support those in economic inactivity back into work is disappointing, not least because employers across the country are struggling to recruit, with vacancies reaching 1.3 million in March 2022.

The majority of these people are over 50 years old, and further investment in tailored employment support for older workers looking to return to the labour market is urgently needed.


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