Our priorities for the Budget

As the Government prepares for its first Budget this week, senior researcher Ben Glover sets out our priorities for the Chancellor, from supporting the vulnerable in the wake of the Coronavirus crisis to addressing wider economic and social challenges:

Protecting the vulnerable over the coming months 

Alongside safeguarding the macroeconomy, the Chancellor’s main priority this Budget must be ensuring that society’s most vulnerable are protected from any Coronavirus-related economic harm.

Low income self-employed people 

It is welcome that the government has announced that statutory sick pay will be paid from the first day of illness. But this is no help to the millions of workers not on a typical employment contract: self-employed people working in the gig economy, for example. As Demos research last year showed, the financial lives of this group are often characterised by low pay, high income volatility and poor access to good credit. To ensure the Coronavirus doesn’t push precarious workers over the edge, the Chancellor should launch an emergency sick pay fund for the low paid self-employed.

Benefit claimants

The virus also places pressure on benefit claimants, who can be sanctioned for missing appointments with the DWP. The government has signalled that claimants won’t be sanctioned if they have informed the DWP in advance that they can’t attend a meeting. But because many claimants have so little faith in the department, there is a risk that people may risk a trip to the Jobcentre for fear of being sanctioned. Better for the DWP to get ahead of the curve and suspend sanctions altogether. 

Communities in high need of credit

Any economic shock as a result of the virus is also likely to place pressure on areas of high credit need: low income places where people are already struggling to keep up with their bills. Our Good Credit Index last year found that post-industrial towns – many of them in the Tories’ new ‘Blue Wall’ – show particularly high levels of credit need. To ensure people in these communities can access affordable credit in the face of an income shock, the Chancellor should fund local welfare schemes to provide emergency financial support to those in need.

Whilst its right that tomorrow’s Budget will likely focus on responding to Coronavirus, there is also the need to ensure that progress is made on the wider, long term challenges facing modern Britain.

We suggest:

  • A new skills agendaBritain needs a bold new skills agenda to address its weak productivity growth and to prepare for a new age of job automation. This must give everyone across the UK the opportunity to unlock higher pay and change careers in the face of industrial change. As Demos called for last month in The Learning Curve, the government should start by introducing a ‘right to train’: five days’ paid learning leave for all employees. Currently employees only have the right to request unpaid training leave, creating a potential poverty trap for those on low incomes who are unable to take the training required to raise their wages or upskill. This change seeks to put that right.

 

  • Building more, building betterThe Government is right to recognise that the planning system needs an overhaul:  Demos research last year found that our planning system has been captured by those most opposed to new homes (particularly older homeowners), slowing down housebuilding. This can only be overcome by a new approach to planning that ensures all voices are heard in local housebuilding decisions, particularly young renters. Tomorrow the Chancellor should confirm the Government’s intention to overhaul our approach to housebuilding by, in the words of the Housing Minister last week, putting “people at the heart of the planning system”. Alongside measures to increase the supply of housing, the quality of new homes must urgently be improved. This includes ensuring that its new Future Homes Standard, announced in last year’s Spring Statement, reintroduces the zero-carbon homes standard, as suggested in our report last year.

 

  • Fixing social careSeveral months on from Boris Johnson pledging to “fix the crisis in social care once and for all”, there is little sign of a plan to achieve this. Whilst it is welcome that the Health Secretary Matt Hancock has reached out to other parties, there is a need for the government to set out an intended direction of travel for this problem to be fixed anytime soon. What’s more, our national debate continues to ignore those that are bearing the brunt of the social care crisis: Britain’s millions of unpaid carers. At a bare minimum the government should give them the recognition they deserve by increasing Carer’s Allowance to at least Jobseeker’s Allowance, as Demos has previously called for.