Economic fruits must pass to the poor, Chancellor told

10 March 2017

PA

Balancing act: the Chancellor, Philip Hammond, delivers his Budget statement to MPs, on Wednesday

Balancing act: the Chancellor, Philip Hammond, delivers his Budget statement to MPs, on Wednesday

THE Bishop of Birmingham, the Rt Revd David Urquhart, has welcomed many of the measures announced in Wednesday’s Budget, but expressed concerns about in-work poverty and social care.

Bishop Urquhart, the convener of the Bishops in the House of Lords, said. “As we begin to con­sider what the UK outside the EU will look like, we need to commit to policies that will promote care for the environment, a bias for social justice, and a renewed focus on the most vulnerable.”

Bishop Urquhart acknowledged the dilemma faced by the Chancel­lor, Philip Hammond, “of balancing the need to reduce national debt and the deficit while ensuring there is proper targeted support and invest­ment where it is most needed”.

In a Budget that was significantly shorter than normal, made no mention of Brexit, and contained few surprises, Mr Hammond made the biggest changes by raising the National Insurance (NI) contribu­tions of the self-employed.

The current rate of nine per cent will increase to 11 per cent by 2019, raising a total of £145 million a year by 2022 and costing the average self-employed worker about 60 pence more a week.

The 2015 Conservative manifesto promised no increases to income tax, VAT, or NI, but the small print of the law passed that year to guaran­tee this did not cover Class 4 NI contributions from the self-employed.

There was also a package of £435 million to help companies hit by a rise in business rates, with particu­lar help for small firms and pubs.

Bishop Urquhart said that creat­ing a climate where businesses could thrive was essential to “insure us against shocks to the economy that EU withdrawal might yet bring”.

In a response to pressure from Conservative councils and back­bench­ers, the Chancellor announced that the Government would spend an additional £2 billion on social care over the next three years. Longer-term proposals on how to fund the social care system will be published later this year.

Bishop Urquhart said that addres­sing the “crisis in social-care funding” had to be a priority and although Mr Hammond’s measures were “encouraging”, the whole sys­tem needed to be placed on a more sustainable footing.

There was good news for the economy, as the forecast for growth this year was raised to two per cent, up from 1.4 per cent, and borrowing was predicted to be lower than expected, at £52 billion. 

Bishop Urquhart said that any fruits from an economic upturn should be passed on to the poor, who were struggling to cope with freezes in benefits plus a rising cost of living. “I welcome the continuing rise in employment levels but re­­main concerned about levels of in-­work poverty,” he said.

More bishops are expected to respond to the Budget when it is debated in the Lords next week.

The planned rise in the minimum wage to £7.50 an hour will begin on 1 April. This was welcomed by the Living Wage Foundation, although the organisation’s director, Kather­ine Chapman, said that this was still £1 an hour short of what it costs to live a “decent quality of life”, and £2 short for those in London.

The chief executive of the Chil­dren’s Society, Matthew Reed, said that Mr Hammond had “missed a crucial opportunity” to improve the lives of millions of children, with inflation outstripping frozen benefit payments. “The four-year freeze to family benefits; coupled with rising infla­tion, already means that parents’ incomes are buying less and less each month,” he said. “The Chan­cel­lor has offered them little to bridge that gap today.”

Christians Against Pov­erty, how­ever, welcomed the 30 hours of free childcare for three- and four-year-olds from September, and the increase in the minimum wage and a further rise in the personal tax allow­ance to £11,500.

 

'Heavy toll' of problem debt

by a staff reporter

MORE than 620,000 families in the UK spend more each month on debt payments than on food, new re­­search published by the Children’s Society suggests.

The charity based its calculations on a survey it commissioned of 2004 adults, carried out by the polling company Opinium, and data from the Office for National Statistics.

The Children’s Society estimates that, among families who are behind on paying back bills, 18 per cent of household income each month goes towards paying down debt arrears. It also estimates that 46 per cent have had to borrow money to meet a sudden, unexpected expenditure, such as a car or household-appliance breakdown.

Some families spend more than £1000 a month on debt bills alone, and two out of five families said that they would have to borrow more money to buy essentials if the cost of living increases further, the charity said.

It has called on the Government to introduce a 12-month “breathing space” for parents and young people in debt, free of debt collectors and mounting inter­est payments, to allow families to plan their finances and debt repay­ments.

One woman, Sarah, told the char­ity how she and her young son were made homeless after she fell into debt when her partner walked out.

She said: “A breathing-space from my outstanding bills and the con­stant letters and calls would have, at least, given me an emotional break from the worrying and struggling.”

The chief executive of the Chil­dren’s Society, Matthew Reed, said: “The stress and worry of falling into problem debt takes a heavy toll on both parents and children alike. We know that in some cases chil­dren are going without basics such as food, clothing, or heating, as well as suffering from worry, anxiety, and bullying as parents struggle to keep up with repayments.

”No family should have to struggle to afford food because of the cost of problem debt; but this is a day-to-day reality for far too many across the country, as they find themselves facing spiralling charges and under intense pressure from lenders.

“These families need better protection from the Government to help them back on their feet and in charge of their finances.”

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