Budget 2013: Clear indication of further welfare cuts to come
Lowest paid will only gain £17 a year through raising tax threshold
Citizens Advice criticises Budget that ‘gives with one hand and takes away with the other’
Gillian Guy, Chief Executive at national charity Citizens Advice said:
“This Budget was a desperate attempt to raise the hopes of a nation of people facing disappointing news on all fronts. There are some positive gestures, but many of the key policies won’t help those who need it most and there was a worrying sign that come June, the Chancellor will once again turn his attention to the welfare budget and wider public services and support that people increasingly rely upon.
“Raising the personal tax allowance looks good but will only help low earners if they get to keep all the money they gain. Current rules mean that as their income goes up, their benefit goes down, so what they are given with one hand is snatched away by the other.
“Increasing the tax threshold to £10,000 will deliver only £17 a year to the lowest paid – a measly 32p a week, less than the price of a loaf of bread. In comparison a couple both earning £30,000 – a total household income of £60,000 – will keep £224 a year or £4.30 a week.
“A simple adjustment in the benefits system could end the senseless situation that sees people on the minimum wage and eligible for housing benefit and council tax support, losing 85p in the pound of any money they gain through raising the tax threshold.
“Britain desperately needs a solution to its housing crisis but it needs one that is long-term and encompasses the rental and social housing markets. A quick giveaway could further inflate the housing bubble, making the lives of renters even harder.
“Childcare costs are crippling many working parents. Extra support announced yesterday is a step in the right direction, but making childcare cheaper by funding it directly would be the best way to help low paid parents fighting a losing battle to make work pay.
“The Chancellor also made a clear indication anticipating further restrictions on public spending which will include – and possibly come mainly from – the welfare budget. This budget has been squeezed dry and at the same time the Government is introducing the biggest shake-up of the benefits system since it was introduced. Any further cuts will be disastrous for millions of people and we look towards June’s Spending Review with trepidation.
“We wait to see if the Chancellor’s fiscal reforms, such as the new employers allowance, will help people who aspire but aren’t finding full-time jobs in this stagnant economy.”
Did you know?
- More than 30% of the people coming to Citizens Advice Bureaux in 2011/12 with benefit problems are in work (222,806).
- Forty percent of Citizens Advice clients are in work but they're still struggling to cope as they continue to be squeezed in this double-dip recession.
- Government raising the tax threshold to £10,000 gives the lowest paid £17 extra a year. While a couple on £60,000 get £224 a year.
- Bureaux helped 15,848 people last year (2011/12) with problems concerning Child Tax Credit and 1,866 of them had specific problems concerning childcare.
- Pensions are on people’s minds – in 2012 bureaux dealt with 21,718 problems, focusing on state pensions.
- In the last 12 months, 91,684 people sought online advice about pensions.
- 9,660 people got online guidance about state pensions from adviceguide.org.uk in the last 12 months (780 people a month).
Notes to editors:
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- 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.
- To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
- Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014 service statistics see our quarterly publication Advice trends
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.