Budget good for tackling poverty says Citizens Advice

12-03-2008

Citizens Advice today welcomed the Chancellor’s budget announcements to increase the incomes for families and pensioners in 2008/09 and says that proposals promise to put more money in the pockets of many people on the lowest incomes.

Child and fuel poverty

Citizens Advice particularly welcomes the news that the increase in Child Benefit to £20 a week for the first child will now start in April 2009. In addition the increase to Child Tax Credit by £50 a year in real terms also from April 2009 and the announcement that from October 2009 Child Benefit will be disregarded when calculating housing and council tax benefit are also good news. Together with the announcement that from next year pensioner households will see winter fuel payments increased by £50 per annum for those aged over 60 and £100 for those aged over 80, this package of proposals promises to assist many people on the lowest incomes.

Citizens Advice also gave a positive response to the Chancellors commitment to lead discussion with the energy industry designed to get a better deal for the 5 million households who use pre-payment meters to pay for their fuel. As things currently stand these households, generally on lower incomes or with fuel debts to repay, pay £145 more per year simply to use this payment method. The difference in prices paid by these customers compared to those paying by direct debit or online is far too great.

The charity urged the Government to ensure that these measures are accompanied by initiatives to help people to claim all of their entitlements.

Policy director Teresa Perchard said

“It is great to hear that more money will find its way into the pockets of the poorest in our society. To make the most of these announcements though the Government needs to do better to help people who are eligible for benefits to claim them – £2.5bn a year currently goes unclaimed by pensioners alone and many working households on low incomes who are getting tax credits are just not claiming help with housing or council tax costs. Often this is because the systems are not properly integrated – one government department deals with tax credits and local councils deal with housing and council tax benefit – or staff on the frontline in government services just do not tell people about all their entitlements. The measure of the Governments programme to ‘transform’ public services should be that fewer people miss out on claiming their entitlements in future”

She added:

“It is very important to see action on fuel costs in this Budget and the Chancellor’s commitment to lead discussions with the industry with the aim of securing an increase in their expenditure on social responsibility activities (from £50m this year to £150m) is welcome. However, we hope that this substantial increase in expenditure by companies is not funded by consumers who are already struggling to pay their fuel bills. The number of fuel debt enquiries we have helped with in the last year has rocketed so it is important that greater investment in social measures does not make this worse for some consumers’

Housing benefit

Citizens Advice also appreciates the announcement that there would be a comprehensive review of the housing benefit system. This provides a real opportunity to get a fairer system and the charity would hope to see a better deal for young people who currently find that the amount they receive from housing benefit, under the ‘single room rent’ rules is totally inadequate to enable them to obtain somewhere decent to live.

Incapacity benefit

Citizens Advice was however anxious about the announcement that from 2010 all long term recipients of Incapacity Benefit will be asked to undertake a Work Capability Assessment. This assessment is as yet untested on a wide scale, as it relates to the new Employment Support Allowance, currently scheduled for introduction in October 2008. It would seem premature to make this commitment before the new ESA system is up and running and is found to genuinely help people with disabilities seek and retain employment.

Saving Gateway

Citizens Advice is pleased that the Saving Gateway will be introduced nationally. This is an important scheme which both encourages and assists those on lower incomes to save.

Notes to editors on Citizens Advice

1. The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales www.citizensadvice.org.uk
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. Most Citizens Advice service staff are trained volunteers, working at over 3,300 locations across England and Wales.
4. Advice and information www.adviceguide.org.uk
5. Volunteer hotline 08451 264264 (local rate)
6. Citizens Advice Guide to your rights, second edition: January 2008 - over 600 pages of practical, independent CAB advice. An invaluable resource for any bookshelf - available from all good bookshops; price £11.99; ISBN: 9780141034089
7. Follow Citizens Advice on Twitter: twitter.com/CitizensAdvice
8. Subscribe to Citizens Advice press releases via RSS news feed: www.citizensadvice.org.uk/pressoffice