Budget plea for Government to ease the strain on struggling families

The Joseph Rowntree Foundation (JRF) has called on Phillip Hammond to use today’s financial announcements to take action on things like rising prices, low wages and changing benefits which together are hitting many families hard.

Katie Schmuecker, the JRF’s head of policy and research, said: “Phillip Hammond’s first budget is a chance for the Government to support families who are struggling as rising costs, low pay and changes in benefits eat into household budgets."

She added: “There are three ways the Chancellor could ease the pressure on low income families: first, the Chancellor could remove the freeze on working-age benefits so their value keeps pace with rising prices; second, Universal Credit could be reformed so that low-income working families, particularly lone parents, can keep more of what they earn; finally, the Industrial Strategy needs to take into account low-paid industries such as retail, care and hospitality so that workers in these sectors can progress ensuring work does become a route out of poverty.”

The calls come as social care workers in the area have spoken about the situation facing their sector.

Mike Padgham of the Independent Care Group said he and other care providers had seen their hopes risen and dashed by Government announcements many times, but there were still things Phillip Hammond could do to help.

He said: “One of the problems is we have been excited so many times, and we have been let down.

“We need more attention on social care, and that means more money, but the Chancellor has said this is not going to be a spending spree.”

Instead of putting all responsibility onto local authorities, the Government needs to step in and find other ways of raising money for social care - perhaps through National Insurance - but without putting more pressure on those on low incomes who can least afford to pay, he said.

Another measure which would make a huge difference to providers like him is VAT, Mr Padgham added.

Social care companies, unlike the NHS, currently have to pay VAT on goods or services they buy.

Giving them VAT exemption would instantly lower costs, and make it easier for companies to invest in their workforces and their facilities, he said.

“The Government keep asking for solutions - here’s one we have been discussing for at least two decades.”

VAT also features in the hopes of hoteliers, who will be watching the budget as their business face a “triple whammy” of increasing business rates, the Living Wage and the introduction of auto-enrolment pensions.

Graham Usher, manager of the Monk Bar hotel and chairman of York Hoteliers Association said the future looks difficult for many small hotels, but bringing VAT into line with the rest of Europe would help.

He said: “Across most of Europe the VAT rate for tourism is five per cent, and we could do with a VAT tax break in this country. Food in supermarkets has a zero VAT rating because it is ‘cold’, but we have to charge VAT at 20 per cent, which is ridiculous.

“The Chancellor needs to recognize the importance of our industry to the economy, and instead of increasing the financial burden, he needs to lessen it.”