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Budget 2011 – our thoughts, your concerns

Woman on phone

Set in the context of welfare benefit cuts, rising unemployment and inflation, this Budget did little to remedy the hardship of some of the poorest and most vulnerable people in society.

That was the message from Gillian Guy, Chief Executive, Citizens Advice as she gave evidence on Monday to the Treasury Committee Inquiry into the Budget 2011.

By far the biggest concern for the majority of people is the proposed cuts to welfare benefits announced in last year’s Budget and the Comprehensive Spending Review. Altogether the cuts totalled £7 billion with many starting to take effect soon.

Last Thursday and Friday, five advisers from Brent CAB and Barnet CAB teamed up with the Daily Mirror to answer a dedicated helpline for people concerned about how the budget will affect them. The overwhelming majority of calls were from people worried about the proposed cuts to disability benefits announced last year, in particular disability living allowance and employment and support allowance (ESA).

“People were really scared about losing money they depend on.”
Maureen Arthur
Welfare Benefits Caseworker
Barnet CAB

Another example of the proposed benefit cuts is the extension of the shared room rent to single people under the age of 35 (up from 25). It was announced in the Budget that this proposal, which will cost approximately 88,000 people an average of £45 a week in housing benefit, is being brought forward from April 2012 to January 2012.  

Our Fair welfare campaign work is focusing on proposed changes to ESA and housing benefit. To find out how you can help us put a stop to these cuts, see:

Below is a selection of budget announcements that caught our attention based on previous and current campaign work. For a full list of budget announcements, see:

Help with housing costs

The extension of the Support for Mortgage Interest (SMI) scheme for a further year is a positive step towards helping people to stay in their homes. In our opinion, this support for people on a means-tested benefit should have been made permanent. We would also liked to have seen an increase in the standard rate of interest used so that people don’t have to struggle to make up any shortfall themselves.  

Income tax

While we welcome the reductions in personal taxation that will lift around 500,000 people out of liability for tax, they are unlikely to help the majority of our clients whose incomes are already below the tax threshold. For working households on a low income, for every pound they gain from not having to pay tax, they will lose 85p of any housing benefit they are entitled to.

This Budget will do little to stem the increasing demand for advice – during 2009/10 bureaux across England and Wales advised 2 million people on 7.1 million issues, an increase of 18 per cent on the previous year. And with public spending cuts set to squeeze the availability of advice services, there are tough times ahead for everyone.

Further information

Watch the Treasury Committee Inquiry into the Budget 2011