Autumn statement 2023: Sector leaders criticise lack of measures for struggling families
Fiona Simpson
Wednesday, November 22, 2023
Sector leaders have criticised the Chancellor of the Exchequer’s decision to reduce National Insurance payments and increase the National Living Wage over measures to support families “at the sharp end of the cost-of-living crisis”.
Laying out his latest budget in the House of Commons, Jeremy Hunt announced a reduction of Employee National Insurance contributions by two percentage points from 12 per cent to 10 per cent for 27 million workers who meet the contribution threshold.
Hunt also revealed a National Living Wage increase for 18- to 25-year-olds – including an expansion of the highest rates to those aged 21.
The National Living Wage will increase from £10.42 to £11.44 in April next year with the age threshold being reduced to 21 for the first time.
Young people aged 18 to 21 will also see a boost with the National Living Wage increasing by £1.11 to £8.60 per hour.
Further measures impacting the most vulnerable families included a 6.7 per cent increase in universal credit and disability benefits in line with September’s inflation rate, rather than October’s lower rate.
Tougher schemes for people searching for work, including the implementation of mandatory work placements for the long-term unemployed with threats to cut benefits if they do not engage within six months, were also announced.
However, sector leaders have criticised a lack of immediate support for families struggling with the cost-of-living crisis.
Paul Carberry, chief executive at Action for Children, said: “The increases to benefits will provide some welcome help for families struggling with rising costs and rents. It is disappointing, though, that the Chancellor has chosen to spend a huge amount of money on a national insurance tax cut, which largely benefits the better off, rather than targeted help for the low income families he himself says are at the sharp end of the cost of living crisis.
“The Chancellor talks about making work pay but our research shows that almost two million children in poverty live in families where their parents face at least one significant barrier to work, such as a disability, being a carer or being a lone parent trying to balance work with looking after a young child.
“The government’s plans to move people into work must address these very real issues in order to provide the help that will make the most difference for parents wanting to work.”
Meanwhile, the early years sector is among those warning that unless the increase is offset by increased investment, employers will struggle to implement the increase.
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said that the sector will be “disproportionately affected by the wider age range moving into the higher pay bracket” due to a high proportion of younger employees.
“Although this new minimum wage rate will support millions of low-paid workers during a difficult time, it is not going to be painless for employers to implement.
“From April 2024, early education and care providers will be expected to deliver additional funded places for two-year-olds. Unless the government increases the funding rates for all children to include this hike in minimum wages, the expansion policy will be completely undeliverable.
“The early years sector employs a large percentage of young people, so will be disproportionately affected by the wider age range moving into the higher pay bracket. Nursery employers will also need to boost wages of more qualified and experienced staff to keep those pay differentials in place,” she said.
Hunt also announced plans for a £50m investment over two years to increase the numbers of apprenticeships in areas like engineering, however, made no further new announcements for education or the early years, instead reiterating plans announced in October's Conservative Party Conference for an Advanced British Standard to replace A-levels.
He also reiterated plans put forward in last year’s autumn statement, which are already being rolled out, to expand funded childcare hours to children as young as nine months by 2025.
Critics also highlighted a lack of further investment in the implementation of recommendations accepted by government from the Independent Review of Children’s Social Care.
Cathy Ashley, chief executive of Family Rights Group, said: “There is a lack of ambition and forward thinking throughout this autumn atatement. The Independent Review of Children’s Social Care was clear – failing to invest in children’s social care now, means outcomes for many children and families will remain stubbornly poor and by this time next decade there will be approaching 100,000 children by 2032 at an extra cost of £5bn.
“To avert this, the review recommended an investment of around £2bn over five years. This represents a fraction of the £13bn of fiscal headroom that the Chancellor had when putting together this autumn statement, and would improve thousands of children and young lives while saving billions for overstretched local councils. Failure to invest is shortsighted in the extreme.”
In her response to Hunt’s speech, shadow chancellor of the exchequer Rachel Reeves told MPS: “Despite all the promises today and working people are still worse off.”
