SVP responds to the Chancellor’s Budget, March 3, 2021

By Elizabeth Palmer, CEO of the St Vincent de Paul Society (England and Wales)

Today’s Budget delivered by Chancellor Rishi Sunak represents one of the most important political statements of recent times and comes at a critical time for the nation. Last year, the UK economy shrank by 10%, the worst decline in 300 years. Predictions show that around a third of the population will be living below the minimum income standard this year. This Budget has the power to shape the strength and nature of the recovery from the Covid crisis and capitalise on the positivity created by the Prime Minister’s roadmap out of national lockdown.

The Government has to date introduced welcome measures such as the Coronavirus Job Retention Scheme (CJRS) and the uplift to Universal Credit. These temporary measures have ensured millions of households remain afloat at a time of deep crisis. The SVP applauds these initiatives, which demonstrated vision and ambition.

While we welcome the extension to the CJRS, today’s Budget is a missed opportunity to set out a progressive plan which would have given millions of households and businesses a support package capable of guiding the country out of the crisis with confidence.

The vaccine rollout has so far given us hope. This is the time for bold action to lift millions out of poverty and we are disappointed the Chancellor did not take this opportunity to deliver a compelling vision for a more levelled up and equal nation.

Summary of our response

• The limited extension of temporary measures to support households should be expanded and made permanent. A six-month extension to the temporary £20 Universal Credit uplift is not enough to support households as they struggle to get back on their feet. A permanent uplift should also be rolled out to people on legacy benefits.
• While we welcome the six-month extension to the CJRS, we urge the Government to ensure adequate investment in re-training and skills is provided as the CJRS is wound down.
• We welcome the Government’s commitment to levelling up the country. However, we are disappointed no details were shared on the new UK Shared Prosperity Fund (UKSPF). We urge the Government to share more details of the fund as soon as possible.
  The focus must now be on growth, not austerity. Overall, this is the time to increase spending rather than cutting back.

On our social security system

Our social security system needs to be strengthened so that it can truly unlock the potential of millions of people.

As a member of the Keep the Lifeline coalition, we are disappointed the Chancellor opted for a limited, six-month extension of the £20 uplift to Universal Credit. This is a missed opportunity to extend support to struggling families on Universal Credit by making the uplift permanent. We are equally disappointed there has been no announcement about extending the uplift to people on legacy benefits.

The temporary extension to the £20 Universal Credit uplift for only six months will undermine the road to recovery and will leave millions in limbo and at risk of falling into poverty. Cutting this lifeline in the autumn will push households into debt and will leave millions vulnerable at a time when the economic scenario is expected to be dire and unemployment is projected to be widespread. A six-month extension of the uplift also fails to meet the original objectives of the policy, which were to strengthen the safety net and protect incomes.

On employment support

The Coronavirus Job Retention Scheme kept nine million people in work at its peak last May. We welcome the announcement that this scheme will be extended until the end of September 2021, however support and investment in retraining and job creation must be the main priority for the Government.

We welcome the announcement of the new Levelling Up Fund. With unemployment levels estimated to be at 6.5% later in the year, it will be essential to introduce measures aimed at creating jobs as well as introducing new training and apprenticeship schemes. A generation of young people will need sustained support if their life chances are not to be blighted by the economic fallout out from the pandemic. We urge the Government to share details of its UK Shared Prosperity Fund as soon as possible.

While the Government’s levelling up agenda is an ambitious programme, to be successful it needs to ensure that:

• There is an end to austerity measures for local government, and instead increased spending is implemented to improve the quality of public service provision and standards of living.
• The new UK Shared Prosperity Fund is ring-fenced and not used to plug funding gaps in local government budgets which have been decimated over the last decade.

We need the Government to match the commitment of the millions of people who have bravely endured the restrictions and deprivations over the past year. It is only by empowering people financially, socially and spiritually that the nation can start to fully recover from the effects of the pandemic.