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Bishops give guarded welcome to Chancellor’s autumn budget

17 November 2022


The Chancellor, Jeremy Hunt, meets pupils at St Jude’s Church of England Primary School in south London after delivering his autumn statement to Parliament earlier on Thursday

The Chancellor, Jeremy Hunt, meets pupils at St Jude’s Church of England Primary School in south London after delivering his autumn statement to Parli...

IT WILL be a hard winter for many, bishops have warned, after the Chancellor of the Exchequer, Jeremy Hunt, acknowledged on Wednesday that the country was entering a recession.

The Bishop of St Albans, Dr Alan Smith, and the Bishop of Durham, the Rt Revd Paul Butler, broadly welcomed the measures announced by Mr Hunt in his autumn budget, which included tax increases and spending cuts as well as some investment in public services and support for vulnerable people.

In particular, the bishops welcomed the Government’s decision to increase benefits in line with inflation. Earlier, doubts had been expressed about this, to the alarm of many charities working with the poor (News, 13 October).

The chief executive of the Children’s Society, Mark Russell, said that he felt “incredible relief” that the Government had made the decision to increase benefit payments, though he added that “far more targeted support for children” was needed, including an increase to child benefit.

The food charity Feed the Future went further, saying that Mr Hunt had “ignored the chorus of demands to protect children’s health” by expanding the provision of free school meals.

Christians Against Poverty (CAP) said that the budget had avoided the “worst-case” scenario, but it represented a “missed opportunity” to address the cost-of-living crisis. Gareth McNab, CAP’s director of external affairs, said that the charity’s debt advisors were in “unchartered territory, with increasing numbers of clients whose budgets simply cannot be made to add up”.

He said that he was reassured by the extension of the energy price guarantee for a further six months from April, albeit at a rate that will allow the average bill to rise to £3000 a year. He also welcomed additional support for the most vulnerable — with £900 promised for households on means-tested benefits; but he noted that such households would receive “£300 less in cost-of-living payments next year compared to this year”.

Bishop Butler and Dr Smith highlighted the part that churches were playing “across the country”, as the demand for foodbanks and other services, such as warm refuges, continued to rise. “It is heart-breaking to hear of people who just a year ago were donating to foodbanks but are now using them themselves,” the bishops said in a joint statement issued on Thursday afternoon.

Christian Aid’s chief of UK advocacy, Sophie Powell, said that the Government was trying to “balance the books on the back of people in poverty”. She criticised the Chancellor for not restoring the overseas aid budget to 0.7 per cent of GDP as had been pledged (News, 20 May).

The sister agency CAFOD was also critical, describing the decision as a “mistake”, since it meant that “the root causes of global injustice — which contributes to migration — will remain unresolved.” The UK’s soft power would also be affected by the Government “breaking its promise to the world”.

Mr Hunt told the House of Commons on Wednesday that he had not abandoned the ambition to raise spending on aid, but insisted that it was not possible in the current economic climate.

Dr Smith and Bishop Butler ended their statement with a pledge to “continue to hold the Government to its commitment” to return to former spending levels.

It was Mr Hunt’s first budget since taking over from Kwasi Kwarteng last month, forced out of office by market turmoil in reaction to his announcement of sweeping tax cuts (News, 23 September). Mr Hunt said that his priorities were “stability, growth, and public services”.

Forecasts predict that the economy will shrink by 1.4 per cent next year. In his statement to the Commons, Mr Hunt said that the recession was “made in Russia”, blaming the economic crisis on the war in Ukraine along with the effects of the pandemic.

Among the measures announced in the budget were a reduction in the higher rate of income tax, with the threshold sliding from £150,000 to £125,140. Various tax-free allowances have been frozen, which, when combined with high levels of inflation — 11.1 per cent in the year to October, the Office of National Statistics revealed on Tuesday — effectively amount to tax increases.

He also increased the minimum Living Wage by 9.7 per cent, from £9.50 per hour to £10.42 per hour, which employers are bound by law to pay. Earlier this week, the Archbishop of York had called for more employers to join the real Living Wage, which is currently set at £10.90 per hour.

The Shadow Chancellor, Labour MP Rachel Reeves, criticised Mr Hunt and said that the freeze on the personal allowance would cost the average worker £600.

She accused the Chancellor of seeking to deflect responsibility for the economic downturn from his own party. “Because of this Government’s mistakes, we are being held back,” she said. “The Chancellor and Prime Minister are trying to convince us that Britain faces problems that are nothing to do with them.”

Mr Hunt none the less announced some increases in public spending on Wednesday, including additional funding for the NHS and education. He ruled out a move to charge VAT on independent school fees, a policy supported by the Labour Party, saying that, while it would raise money, it would drive tens of thousands of students from the private sector into the state system, and so would not be practical.

The Government’s stated aim of increasing the sustainability and self-sufficiency of Britain’s energy supply would be met by the commissioning of a new nuclear power plant, Mr Hunt said. Ms Reeves criticised him for ignoring options such as onshore wind farms. The Government’s windfall tax on energy firms was also too low, she said: “For every pound of windfall tax left on the table, people are faced with higher prices on their bills.”

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