Posted: 21 November 2016

The Chancellor’s first Autumn Statement should set a new direction

What is the Autumn Statement? 

Once a year, in the Spring, the Chancellor goes to Parliament to set out the Government’s spending commitments for the coming year in the Budget announcement. Years like 2016 however are a great demonstration of why, every Autumn, the Chancellor makes a second speech; the Autumn Statement. With ever shifting economic forecasts and unpredictable growth patterns, Chancellors use the Autumn Statement to update Parliament on the health of the economy, outline any adjustments they need to make and sometimes slip in some big announcements to please voters.

New Government, new plan?

This Autumn Statement will be Theresa May’s Government’s first. After six years of austerity and in uncertain economic times both the Prime Minister and the Chancellor have hinted that they want to change direction and start spending more money. Yet, they have also repeatedly said that the country needs to live within its means. We are definitely getting mixed messages and no-one quite knows what to expect.

Focus on children

With so much going on in the world we would urge the Chancellor to focus on children. Austerity has hit children hard. Welfare reform, often thought to affect adults has actually affected more children. Families on low incomes, many in work, are really struggling; and things may get worse with living costs set to rise. There are three simple things the Chancellor could do to improve children’s lives.

End the four year benefit freeze

Payments families receive, for example Job Seekers Allowance and Child Benefit, are currently frozen and will not rise before 2020. We estimate that 7.5 million children are affected by the freeze and that 4.9 million of these children are living in families where their parents or carers are working. All of these children will be 12% worse off by 2020 and face significant reductions to their family’s budget. It’s crucial that benefits are linked to the cost of living which is why we want the Chancellor to end the four year benefit freeze.

Make work pay

The Government’s introduction of Universal Credit, where one monthly payment replaces multiple different benefits was heralded as a system that would encourage families into work by ensuring that families would always get more money if they had a job. Austerity has hit this policy hard. Cuts to how much money families will get if they move into work mean the incentives that once existed are not as strong as they once were. This is a particular problem for families because of the need to pay for childcare whilst they are working. With two thirds of children living in families where at least one parent is working it is crucial the Government reverses the cuts to Universal Credit to ensure that work always pays.

Give families space to breathe

Since we began our Debt Trap campaign in 2014 we have consistently highlighted the damaging effect that problem debt has on children’s lives. Just last week we released new figures showing that families with children are more than twice as likely to face problem debt than those without children. There are 2.4 million children living in problem debt in England and Wales and our research has found that problem debt is linked to poor mental health and low wellbeing for children. This is why we are campaigning for a ‘breathing space’ scheme which would give parents the time they need to get their finances in order and enable them to pay back what they owe in a manageable way that does not put their children’s health at risk. 

What can you do?

For live reaction to the Autumn Statement follow us on twitter @childsocpol. If you want to join our campaign for a breathing space sign our petition to help us put more pressure on the Government.


By Richard Crellin - Policy team

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The Debt Trap: Exposing the impact of problem debt on children

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