‘The Treasury is taking with one hand to give away with the other’. Think tanks react to the Spring Statement

23 Mar

Centre for Policy Studies

Raising National Insurance thresholds to match Income Tax welcome

“The Centre for Policy Studies warmly welcomed the Chancellor’s landmark decision to raise National Insurance thresholds to the same level as income tax, in response to the cost of living crisis.

“This policy, the Universal Working Income, was suggested by the Centre for Policy Studies in its landmark 2018 paper Make Work Pay, and was adopted by the Conservatives in their 2019 manifesto. At the time, we calculated it would take 2.4 million people out of tax altogether.

“The CPS had recently argued that increasing NI thresholds was the best way to offset the effects of the Government’s increase in National Insurance for those on low and average incomes – but welcomed the Chancellor’s decision to go much further.”

Adam Smith Institute

Chancellor is ‘gas-lighting’ voters over his tax plans

“The big announcement today will undoubtedly be the 1p cut to the basic rate of income tax. Such a cut won’t go into effect until 2024 and Brits need relief now. It’s a cynical ploy to cut tax just in time for the next election, while at the same time hiking tax on workers through National Insurance. In terms of intergenerational inequality, lowering income tax while increasing NIC shifts the tax burden from the old to the young.

“In an ideal world, the Chancellor would have scrapped the planned National Insurance Contribution rise, although it is encouraging to see that he plans to raise the NIC threshold in line with income tax thresholds.”

TaxPayers’ Alliance

The Treasury is taking with one hand to give away with the other.

“Cutting income tax down the line will be easily offset by the upcoming national insurance hike and freezing income tax thresholds, leaving taxpayers out of pocket overall. If the government wants to give taxpayers and businesses a respite from rises, they’d do well to simply scrap the health and social care levy.”

“The alignment of income tax and national insurance is a welcome step to simplifying the tax system. The chancellor should take this chance to combine the two into a single income tax and offer a really radical reform of the tax code.”

Centre for Social Justice

The reality is this cost of living crisis is just getting started

“Today we needed to see a strategy for those struggling the most. Universal Credit remains the best weapon in Government’s arsenal to get support directly to those who will be worst hit by the spike in energy prices, while also helping claimants into work.

“Building on the profoundly welcome cut to the taper rate at the Autumn Budget, the Government should further harness the flexibility within UC to help those furthest from the labour market by investing more in the system in response to rising energy costs and the wider cost of living.”

Bright Blue

Since the Chancellor seems to be allergic to welfare, he is hamstringing himself by refusing to do what would help best

“This is the confused Chancellor. He is desperate to burnish his Hayekian credentials to his colleagues, but he has been consistently Keynesian in his response to two major crises during his short tenure, using a mixture of public spending and now tax cuts to stimulate the economy through troubled times. Public debt, tax levels and inflation will remain historically very high for the foreseeable future, much higher than what fiscally hawkish economists would advise.

The fairest way of helping households struggling with a range of costs, especially fuel and energy, is through broad subsidies such as Universal Credit or broad taxes such as VAT, National insurance or Income Tax.”

Policy Exchange

It is not surprising that the Chancellor is trying to hold on to fiscal rules

“Indeed, the Chancellor’s focus on security in this Spring Statement reveals the tension at the heart of a new culture of enterprise in these difficult economic times. In the long-term, it is the creative destruction, innovation and churn that create a resilient economy. But in the short-term, you need resilient businesses who aren’t laden with debt service costs or input squeezes to make those long-term investments. You need consumer confidence, protected by Government spending in difficult times, to power private business.

“In this Statement, the Chancellor is making the judgement that, ultimately, a moderate intervention will suffice for now, to get through the current challenges, and that too much protection, too much ‘security’ will ultimately cover up weaknesses and hamper the dynamic economy the Chancellor is so eager to create. This is perhaps the biggest call of all, and we should all hope he is right.”

Institute of Economic Affairs

This was a mitigation mini-Budget, not a radical one

“The reduction in fuel duty will make a small difference to households. The decision to raise the National Insurance threshold means workers on an average wage will see their contributions fall, despite the planned 2.5 percentage point rise going ahead. The pledge to reduce the basic rate of income tax is welcome.

“But the UK will spend £83bn on debt interest this year – almost double our entire defence budget. The Chancellor will not achieve economic ‘security’ without a commitment to drastically bringing down our tax bill and reducing government spending, which has spiralled out of control. Only then will he boost our anaemic growth forecasts.”

Onward

Time is running out if the Chancellor wants his economic plan to be felt before the next election

“Today’s statement was a firefighter’s statement. The Chancellor has warned about inflation since he entered the Treasury and today his warnings were realised. The 5p cut to fuel duty and the rising threshold for National Insurance contributions offer considerable protection against spiralling inflation, especially for those on the lowest incomes – and, from 2024, he ensured that voters will keep an extra penny from every pound they earn.

“Critics will say he should have scrapped the planned National Insurance rise. But doing so would have meant finding £12 billion elsewhere for the NHS and social care, or explaining to voters why they must wait months for operations in the run up to a general election. Ultimately this left him with no easy choices.

“But while voters recognise that the Chancellor is fighting fires on all fronts, he cannot lose sight of why the Government was elected back in 2019 – to level up opportunity across the UK. Today’s statement had positive language on capital investment, R&D and apprenticeships, but scant detail and no decisions until the Autumn.”

Conservative Environment Network

Today’s Spring Statement will help people cope with rising household bills 

“Scrapping VAT for insulation will help people upgrade their homes and reduce their energy bills. This quick and simple tax cut will help families with soaring gas prices. The Chancellor should also look to expand existing energy efficiency schemes to help fuel poor households insulate their homes.

In the short term, a fuel duty cut will soften the blow of rocketing oil prices, helping motorists and cutting the cost of transporting goods across the country. But the crisis underlines the need urgently review the UK’s road taxes.

As people switch to electric vehicles, which will reduce the UK’s dependence on expensive oil imports, road taxes like fuel duty will need to be replaced. This is an opportunity to deliver a fairer deal for motorists and cut congestion while raising revenue for excellent public services.”

Joseph Rowntree Foundation

Chancellor has abandoned many to the threat of destitution, not economic security

“The Chancellor has acted recklessly in pressing ahead with a second real-terms cut to benefits in six months, while prioritising people on middle and higher incomes.

“Changes to National Insurance won’t help those who aren’t working or can’t work due to disability, illness or caring responsibilities, and exposes them to an increased risk of becoming destitute. This means they will face regularly going without absolute essentials such as food, energy and basic hygiene products.

“We can’t build a strong or secure economy by weakening the incomes of the poorest. With benefits reaching their lowest level in real terms since 1985, the Chancellor had ample opportunity with his increased headroom to uprate them in line with inflation to protect those most at risk.”

Institute for Fiscal Studies

If he wants to be remembered as a tax reforming chancellor, so far he is headed in the wrong direction

“There are two paradoxes at the heart of today’s statement. The Chancellor has managed to announce tax cuts without reducing the planned tax take from previous plans. And by saying nothing about spending, he is reducing the real-terms generosity of his plans for spending on public services. That’s what inflation does.

“The cuts to income tax and National Insurance are effectively paid for by increasing revenues as a result of fiscal drag. The freezing of the income tax personal allowance and higher rate threshold turn out to be much bigger tax rises than first intended. As a result, almost all workers will be paying more tax on their earnings in 2025 than they would have been paying without this parliament’s reforms to income tax and NICs, despite the tax cutting measures announced today.

“And by keeping to previously announced cash plans for public spending Mr Sunak is being considerably less generous to public services than he intended when he set out his spending plans in the Autumn.”

Joe Shalam: Sunak must mount a three-pronged attack to skewer the loan sharks

22 Mar

Joe Shalam is Policy Director at the Centre for Social Justice.

Politics has always been a game of nicknames. One need only look at the number of ‘Captain Hindsight’ references in Hansard to see that – ten already this year.

At PMQs last month, Sir Keir Starmer trieds a new one, branding Rishi Sunak ‘the loan shark Chancellor’ after his £9.1bn cost-of-living announcement. Watching on a year into the first major study of illegal moneylending in England in a decade, I couldn’t help but wince.

At the Centre for Social Justice (CSJ) we have known for a while, informed through the whispers of our regional network of local poverty-fighting charities, about the debts owed by their clients to suspicious ‘friends’ or shadowy local figures.

Shrouded in taboo – and the complex emotions felt by borrowers in discovering that the person they had turned to was, in fact, not a friend at all – hidden debt of this kind can cause untold misery to individuals, families, and sometimes entire communities.

But the scale of the problem of illegal money lending today is far worse than we had previously imagined. In a new report published this week, Swimming with Sharks, the CSJ reveals that there could be up to 1.08 million people currently borrowing from an illegal lender (commonly known as loan sharks) in England. While by its very nature it is difficult to produce high confidence estimates of the scale of hidden debt, this is over 700,000 more people than those identified in the last official study.

Digging through the largest sample of known victims of illegal lending compiled to date, it becomes clear that the stereotypical image of muscle-bound brutes patrolling estates with baseball bates rarely matches the reality.

There is, in fact, a vast gradient of perpetrator – from ostensibly benign members of the community who lend ‘on the side’ while pestering their ‘customers’ into shouldering more debt, to loan sharks embedded in organised crime groups and drug gangs.

Yet listening to the stories of victims we have been struck by the sinister psychological methods of coercion brought upon them by lenders of all types, 55 per cent of whom borrowers tragically considered friends. Children given selection boxes at Christmas as a display of the lender’s control. Explicit photos held as ‘securities’. Threats to destroy marriages by informing unsuspecting spouses of their ‘nasty secret’.

All the while, lenders are employing new methods to reach vulnerable people 24 hours a day via social media, one convicted loan shark even paying an ‘influencer’ to entice victims.

It also becomes clear looking at the data of known victims that, while no one is safe from exploitation, it is overwhelmingly the most disadvantaged among us who are affected. Two thirds of victims were already indebted and earning below £20,000. Savings were absent for all but one in ten.

With 45 per cent of victims using the cash for everyday expenses and household bills, the combination of mounting pressures on household budgets, low financial resilience, and increasingly limited credit options is liable to produce a perfect storm in which people are driven towards exploitation.

This week the Chancellor will announce further measures to buffer the squeeze on living standards. Using the additional income tax revenue collected last year to lift the threshold for National Insurance would benefit many lower earners, although Universal Credit (UC) should also be employed to funnel additional financial support directly to those most in need.

The dynamism built into UC should be used to uprate benefits by inflation more responsively in-year (and in line with future energy bill spikes). Cutting the maximum UC debt deduction claimants can receive and remitting old tax credit debts (caused by errors made during the Brown era) would also help those on the lowest incomes through the turbulence.

Fiscal measures, however, will only take us so far. We must urgently renew the fight against illegal money lending, appreciating its complexity as a social and cultural, as well as an economic, phenomenon. The Government has already made welcome commitments to address economic crime, but we propose a three-pronged attack to ensure that tackling illegal lending is at the forefront of this agenda.

First, we need to clamp down hard on lenders. Achieving this will be largely determined by the scope of the key statutory authority, the Illegal Money Lending Team England, to identify victims and prosecute suspects. The team has shown it can deliver on a limited budget, but it must be equipped now to scale up operations given the context we are in. Simultaneously, the Government should also use the newly inked Online Safety Bill to address the new frontier for illegal lending: social media.

Second, we must better protect the most vulnerable through a generational national awareness campaign of both the dangers and support available, stretching every sinew of debt advisers, councils, police, housing providers and work coaches to bring hidden debt to the surface.

Finally, we must provide the alternative. The Government should strip away the red tape stuck in place from the 1970s and liberate credit unions to become bigger and bolder, reaching thousands more of those at risk. We must also raise underlying levels of financial resilience in Britain by increasing the uptake of the excellent but under-utilised Help to Save scheme introduced by the Economic Secretary to the Treasury, John Glen.

While banter in the House of Commons should always remain fair game, illegal lending cannot. We must see it for the very real threat and danger it represents to our communities.

And with illegal lenders licking their lips at the desperation set to accompany the emerging cost of living crisis, we must act now to help the thousands in England who are swimming with sharks.

Cristina Odone: The government engaging with parents is crucial in improving early years education

16 Mar

Cristina Odone heads the Family Policy Unit at the Centre for Social Justice.

Children arriving to school in nappies, unable to eat with a spoon, properly articulate simple words, or even play. Even before the pandemic struck, schools were struggling with children lacking basic skills.

Covid-19 accelerated this. On average, 50 percent of children were not ready to start school in 2021 – as opposed to 1 in 3 pre-pandemic. The new YouGov survey of almost a thousand primary school staff, carried out for the Kindred2 foundation, exposes a terrible truth: a government unwilling to help our youngest.

The Government cannot fail to have learned that the first 1001 days shape a child’s brain. Andrea Leadsom consulted experts throughout 2021 to produce her Early Years Healthy Development Review report, highlighting the need to invest in early years. Robert Halfon MP, Chair of the Education Select Committee, is calling for the same. The Royal Foundation, with the Duchess of Cambridge, travelled to Denmark to report on their critical early years education programme. The Education Endowment Foundation has been preaching since 2011 that what happens at home at this time promotes children’s cognitive development. 

These efforts focus not on pastel-coloured nurseries and cuddly toys, but neuroscience: a child’s brain is formed during their first two years, particularly through communication with their primary carer. Developmental progress at 22 months serves as an accurate predictor of educational attainment at 26. Consequently, messing up then impacts a child’s life: 40% of the attainment gap evident in GCSE outcomes at 16 are established before children starting school.

Preventing this disaster doesn’t need the Government to establish kibbutz-style nurseries or Stalinist creches. It does not need to step into the family home, but should focus on parents. What happens at home counts four times as much as a formal setting in affecting a child’s cognitive development. A Government wanting to promote toddlers’ progress needs to engage with their parents, prioritising equipping them with the know-how to care for their children. Yet ministers remain reluctant about intervening.

Parents of toddlers feel short-changed. Those working to pay the bills sense that they should not leave their child with a babysitter slumped in front of her Ipad; and that nurseries, over-subscribed and over-priced (UK childcare is the third most expensive in the world) should offer more than finger painting and mud fights. They suspect their children should be encouraged to speak better, listen more, and exercise self-control. But they are unsure how to achieve this, and would welcome guidance.

We need policies to supply it.  Many schools already have family liaison officers, who prove indispensable in linking hard-to-reach families to their child’s school. Crucially, they can deliver parenting classes. Parents can learn how to stimulate their child’s development and regulate their behaviour. They can appreciate the need for give-and-take and understand the brain’s basics. Feeling better-equipped, they become confident. This lubricates their relationships with their children but also with their spouses, parents, and others.

These programmes are popular, as Matt Buttery, CEO of the Triple P programme has highlighted “It would be a mistake for the Government to assume parents (and voters) want to be left to raise their children. Our online offering, Triple P Online, received a three-fold increase in enrolments during the pandemic…parents are eager to learn strategies and skills.”

Training family liaison officers is a few hundred pounds: a daunting sum for primary schools already feeling financially squeezed. The government would not have to pay, but they could nudge schools into allocating their budget to cover this investment. The Pupil Premium, received by schools with very vulnerable children, would be one source.

Family hubs, a concept the CSJ introduced in 2007, are already integral to the Government’s vision for supporting parents, and the Chancellor has pledged £500 million to promote them. They provide accessible settings for classes and – as Robert Halfon MP has called for – support for local parents struggling with bringing up Baby. But roll out should be accelerated and budget-holders steered towards investing in the early years. 

Childcare must also shift focus. The present system fails to support the most needy. It should deliver free early education for the under-twos in low income households, and not worry about subsidising a few hours (15 per week) of babysitting for well-off 3-4 year olds. Presently, take-up of free childcare is higher among higher income families; only 67% of low income parents are aware of their entitlements. After streamlining this system, the Government should spend more communicating its offer.

Spending on early years is an investment. Failure to do so affects us all. When half the children in a classroom do not have basic skills, they compromise everyone’s learning. As one teacher surveyed by Kindred2 reported, if she is constantly leaving the classroom accompanying a six year old in nappies to the lavatory, how does that affect their classmates’ learning? Every extra hour of instruction accounts for significant improvement in academic performance.

But the impact is long-term, too. It is scary that half of our Reception-age children are ill-prepared to learn, and continue to be so for GCSE and A Levels. Poor educational outcomes are associated with everything from permanent absences (as the CSJ’s Lost but not Forgotten report showed last month), through mental health issues to homelessness and gang membership. The government must learn about the way the brain works – parents’, as well as children’s. 

Robert Halfon: The Government’s education recovery funding has created another North-South divide

9 Feb

Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

Almost £5 billion has been spent on education recovery by the Government. This spending is welcome, but I worry this funding is not reaching the most vulnerable children in our communities.

The National Tutoring Programme (NTP), currently contracted to Randstad, has the potential to be one of the great interventions made to date to support young people’s recovery from the impact of the pandemic. And yet, despite significant investment, it is falling far short of its targets and it’s not going far enough or happening quickly enough.

Over 524,000 children were supposed to start tutoring this year but only eight per cent have actually begun.

The Education Policy Institute has found there has been a marked disparity in the take-up of the NTP between the North and the South. In the South, upwards of 96 per cent of schools were engaging with the programme compared to just 50 per cent of schools in the North. Recently, headteachers and tutoring groups described to us the inaccessibility of the hub and the lack of quality assurance about the tutors on offer.

Perhaps most importantly of all, the Department for Education’s own annual report, published in December, evidenced that the risk of the catch-up programme failing to recover lost learning is critical or very likely.

The Government must look again at the contract with Randstad and seriously consider enacting the break clause. If Randstad cannot up its game, it is time to say goodbye.

The ghost children

A recent report published by the Centre for Social Justice, Lost but not forgotten, highlighted that 758 schools across the country are missing almost an entire class worth of children. Indeed, around 500 children are missing in about half of all local authorities and over 13,000 children in critical exam years are likely to be severely absent.

The effects of persistent absence go well beyond just academic progress. It also means these children are at risk for safeguarding concerns such as domestic abuse or county line gangs. The tragic cases of Arthur Labinjo-Hughes and Star Hobson are an all too poignant reminder of this risk.

The Department’s recent announcements to tackle the postcode lottery of avoidable absence are a positive start, but more urgent action is needed. Prioritisation must be given to collecting real-time data about who and where these children are and the Government should use the underspend from the NTP to fund an additional two thousand attendance advisers to work on the ground to help find these children and get them safely back into school.

Charles Dickens wrote of: “so many things forgotten, and so many more which might have been repaired”.

If we are to save the Oliver Twist generation of “ghost children”, we must act now. If we do nothing, we will be haunted by them forever.

The exam conundrum

I welcome the Government’s plan to move back to regular examinations. Given that so many children missed school over the course of the pandemic due to school closures, it is understandable that Ofqual has decided to give pupils advanced information about some aspects of the topics that will be assessed to help support their revision.

But there are two elephants in the room. The first being that essentially, all students will now be running a 50m sprint, instead of a 100m race, yet they will all be starting from the same point. This may seem fair, but for disadvantaged pupils who learned the least during the pandemic, they will now be pitted directly against their better-off peers who were able to continue their learning at home.

The Government’s reply to this will be that the catch-up programme is designed to alleviate this problem, but as described above, despite the 524,000 target set by the NTP, it is currently only reaching eight per cent of pupils.

The second elephant, also referenced to above, is that according to the Centre for Social Justice, we know that over 13,000 children in exam years have not returned to school for the most part. So a system has been created where advantaged pupils will feel the benefit of the advanced notice, but their worse-off peers will struggle. Furthermore, we risk ignoring the 13,000 pupils in A-Level and GCSE year groups who have not returned to school at all.

Mental health

This week is Children’s Mental Health Week – a timely reminder about the need to address the challenges surrounding children’s mental health.

The statistics we are confronted with are pretty grim.

Just last year, 17.4 per cent of children aged 6-16 are reported to have a probable mental health disorder (up from 11.6 per cent in 2017). Eating disorders among young girls have risen by 46 per cent. The number of young people being referred to Child and Adolescent Mental Health Services have been steadily rising to 538,564 in 2020, representing an increase of 35 per cent from 2019, and 60 per cent from 2018.

The Government must rocket boost its proposals to put mental health professionals in every school. But interventions to support mental health must not be seen as crutches, but should be designed to teach resilience to prevent more serious escalation.

Work must also be done to tackle the wrecking ball of social media on young people’s mental health.

In 2021, 16.7 per cent of 11 to 16 year olds using social media agreed that the number of likes, comments and shares they received had an impact on their mood. Half agreed that they spent more time on social media than they meant to and one in three girls said they were unhappy with their personal appearance by the age of fourteen.

Companies like TikTok, which, whilst providing some entertaining, are sadly acting as a trojan horse for sexualised content and negative body image thereby perpetuating eating disorders which have increased by 400 per cent among young girls during lockdown. As with other social media platforms, TikTok algorithms are like “crack for kids”.

We know that half of all mental health problems manifest by the age of 14, and 75 per cent by the age of 24. With the clear links between using social media platforms and poor mental health, why are the tech giants not stepping up to do more?

The Treasury should introduce a two per cent levy on the estimated £4.8 billion of profits generated by the big firms. This levy could generate a funding pot of around £100 million which could be distributed to schools to improve mental health support and to provide digital skills training to help support children’s resilience online.

Given the scale of the mental health challenges facing our young people, action has to be taken now to prevent it becoming an epidemic.

Cristina Odone: The state must act urgently to support and encourage motherhood

7 Feb

Cristina Odone heads the Family Policy Unit at the Centre for Social Justice.

That chronicler of the nation’s progress, the Office of National Statistics, has dropped a bombshell: half of women born in 1990 (the most recent cohort to reach age 30 years) remained childless by their 30th birthday.

Mothering, the role that for millennia inspired painters, poets and musicians, church teachings and dynastic ambitions, no longer appeals to today’s young women.

Can we blame them? We have turned motherhood into an expensive and low status occupation, when young women seek either a rewarding, high status career or the chance to withdraw altogether from the job market, in order to raise their own children. 

Three quarters of mothers work, but 20-something single women point out that the gender pay gap is actually the motherhood pay gap: as Oxford University’s Ellen Pasternak shows, until they have children women earn the same as their male colleagues; once the children come into the picture, though, their mother’s earnings dip – and stay that way.

Most mothers who come back to work come back part time,  paying a penalty for doing so: while the full time gender pay gap is of some seven per cent, it is more than double that for part time workers.

Childcare remains costly, patchy and so complicated that a recent Centre for Social Justice survey found only a little over half of low income parents knew how to navigate this system.

And as for status..m mothers used to be compared to the Madonna; today, they rank somewhere between a Deliveroo driver, always on call, and a supermarket shelf-stacker, trying to make things look good even when they are not.

Poor pay, no help, and little respect. Add to this grim combination the responsibility for feeding, clothing, sheltering, and schooling someone over the next 20 years, and you can see why so many regard raising children a niche pastime, best left to those who can hire nannies and tutors before packing off the progeny to boarding school.

We can’t be sure how their renunciation will affect young women in the long term: regret, or relief? A sense of loss or liberation? But whatever the impact on them, their failure to breed affects us all.

Within the next 20 years there will be ten million more pensioners. Already, the average age in this country exceeds 40; and the Office for Budget Responsibility projects total public spending excluding interest payments to increase from 33.6 per cent to 37.8 per cent of GDP between 2019/20 and 2064/65 equivalent to £79 billion – due mainly to the ageing population.

At the Treasury and the Department of Health, they are trying to work out how we can afford to grow old when we have no young carers (whether unpaid children or salaried adult social care workers) to rely upon. AI might come in handy, but in our dotage we long for human connection, not the cold touch of a robot.

How can we act now to spare ourselves this dismal future? Happily, we are not the first country to face collapsing birthrates, so we can learn from others’ successes. Free-market champion Estonia, for example, started paying women to have babies in 2004. On top of a child benefit of 60 euros a month per child, the state pays a “mother’s salary” so working women who take time off after giving birth get their entire monthly income for up to 15 months; the unemployed woman gets £200 a month.  

Incentivising breeding smacks of social engineering to Tories. But we may need to turn a deaf ear to the alarm bells, because the Estonian approach led to a baby boom. The government there is looking at other incentives too: everything from subsidies for nannies to linking pension payments to the number of children raised.

What would a British natalist agenda look like? Returning to a proper child benefit scheme would be a first step. Introduced in 1979, the once-adequate benefit has grown stingier and stingier: since 2009 child benefit for a first child has only been increased by three per cent in cash terms, whereas prices have risen by 24 per cent – a loss of £350 a year for a family with two dependent children.

Improving childcare would be key, too. Research is unequivocal that proper childcare can erase educational gaps long termGiven that disadvantaged pupils in primary school are 9.3 months of learning behind their peers (the gap has increased for the first time since 2007, according to the Education Policy Institute) good childcare is critical for a social justice agenda — and for those mothers who opt to stay in employment.

There is an important group of mothers, however, who would prefer to raise their own children. Miriam Cates MP has been championing their cause, arguing for a change in our tax system: taxing individuals, rather than households, punishes single earner families – sometimes to the tune of an extra 50% on two earner couples.

Promoting population growth would prove a huge undertaking, shaping public services and influencing every piece of legislation. It would also call for a co-ordinated response between departments: an ageing population affects every policy. But if women continue to opt out of motherhood, we may have very little choice.

Cristina Odone: We must do more to protect the thousands who suffer domestic abuse, but have no recourse to justice

14 Dec

Cristina Odone is Head of Family Policy at the Centre for Social Justice.

Kate Griffiths MP’s husband raped her in her sleep, physically assaulted when she was pregnant, and exercised coercive control even post their separation. He was a Government Minister at the time.

Andrew Griffiths denies these allegations – but their exposure has driven home the crucial point about domestic abuse: it happens behind closed doors, and it happens to anyone, perpetrated by anyone. And it happens frequently – far more than we would like to think: according to the Crime Survey of England and Wales (CSEW) an estimated 1.6 million women aged 16 to 74 years experienced domestic abuse in the year ending March 2020.

Griffiths, who succeeded her husband as (Conservative) MP for Burton, agreed that her abuse should become public knowledge because, according to her lawyer Charlotte Proudman on yesterday’s Woman’s Hour, she felt that “as a powerful woman and an MP, she wanted to give voice” to women who live with this abuse.

I do not mean in any way to detract from Griffiths’s trauma by saying that she was one of the luckier survivors of this heinous crime. Thousands of women (and men) suffer her same plight, but have no recourse to justice or indeed to support to recover from their experience because of their “insecure” immigration status. They came into this country with a limited right to remain, and their abuser knows it. If the victim dares to blow the whistle, their abuser will have her deported. And she is not only their victim, she has No Recourse to Public Funds (NRPF). No access to counselling for her trauma, or medical attention, or safe housing.

The risk of deportation for these victims – and the NRPF condition can apply to modern slaves too — is all too real. Currently essential public services (e.g. DHSC, DfE, DVLA, DWP, HMRC) and even homelessness outreach services collect information and share it with Home Office immigration enforcement teams, all too often without the victim’s knowledge or permission.

The NRPF status turns police, GPs, teachers even social workers – the very group who should be supporting these vulnerable victims — into informants.

We hope to shed light on the plight of the thousands of victims of NRPF with our new report, Out from the Shadows. Co-authored with the charity Justice and Care, our report addresses the disparities in the treatment of victims of domestic abuse as well as modern slavery whose shared experiences expose a system that allows some women (and men) to languish at the bottom of a hierarchy of victims.

What can we do to right this wrong? In Out from the Shadows we recommend the establishment of an information fire wall between immigration authorities and police, social workers, GPs, and other services to end the data-sharing that makes victims with insecure immigration status so scared of reporting their abuse.

Victims are more likely to cooperate with the police and report crime when they do not risk deportation. In this way, more perpetrators and traffickers would be apprehended, reducing costs as well as the number of potential victims; and fewer survivors would develop serious needs or slip back into exploitation and trafficking.

Research carried out by the CSJ and Justice and Care found that in pilot projects where victims of modern slavery enjoyed Government protection, they all assisted a criminal investigation. Surely, supporting the victims of these crimes so that they feel able to expose criminals and their gangs is in our enlightened self-interest?

We also recommend that the Chancellor establish an annual central NRPF safeguarding fund for local authorities to bid into, based on the need in their area. The fund would cover safe and appropriate accommodation, basic subsistence, advice regarding individual entitlements and rights, specialist support and advocacy, children’s free school meals, and secondary health services. This fund would support data-gathering too, prompting LAs to conduct better/more comprehensive mapping exercises.

At a round table hosted by the CSJ which drew together Nicole Jacobs, the Domestic Abuse Commissioner, and specialist groups and local charities in the sector, we heard that funding should reach directly front-line services. These crucial services routinely are disadvantaged by local commissioning structures. In order to bypass these structures, the fund could be held or administered by PCCs or Mayors rather than local authorities; or distributed directly by the Ministry of Justice, which has extensive experience of commissioning victim support services.

Last week Rachel Maclean, the Home Office Minister, went some way to assure victims of modern slavery who receive a positive conclusive grounds decision and are in need of tailored support will receive appropriate individualised support for a minimum of 12 months.” This is a step in the right direction. We hope Government will take another one, supporting victims of domestic abuse as well as modern slaves. Kate Griffiths, MP: here is a cause to champion.

Three cheers for small charities, and for the Centre for Social Justice

8 Dec

The nationalisation of many of our country’s most famous charities, and their consequent loss of the power of independent initiative as they decline into mere adjuncts of the central bureaucracy, is one of the saddest stories of our time.

What is one to do, if one becomes rich and wishes to turn philanthropist? For it is pointless to write cheques to these huge but lifeless organisations, nowadays funded by the state.

To this conundrum the Centre for Social Justice offers an answer. On Monday night it launched the CSJ Foundation, set up to support hundreds of small, grassroots charities, ten of which received awards.

There is something faintly incongruous about sitting down to a delightful dinner, in the lofty, pillared magnificence of St John’s Smith Square, a stone’s throw from the Houses of Parliament, in order to learn from elegant and prosperous people how to fight poverty.

But any sense of incongruity was forgotten as one heard the testimony of the small charities. I was sitting at the same table as Anna Smith, Chief Executive of One25, in Bristol, which was set up 26 years ago and provides a nightly van service for women trapped in street sex work: a cup of tea, somewhere safe to talk or to sleep.

Smith observed that many people wrongly imagine these street workers to be like Julia Roberts in Pretty Woman, leading an almost glamorous existence as they earn a bit of extra money.

In reality, these women are often homeless, often have mental health problems, are often addicted to drugs, are often raped and beaten up, often lose custody of their children, are ashamed of what has become of them and feel they are beyond any hope of escape.

As part of the award, the CSJ made a short film about One25 which, Smith said, “really encapsulates what we do”, so is useful in explaining this to people.

Doug Barrowman, of the CSJ Foundation, remarked in his speech that 85 per cent of charitable giving goes to only 4.4 per cent of charities by number.

How, he wondered, can a prospective donor, following in the footsteps of “the greats who came before, the likes of Carnegie, Cadbury and Peabody”, evaluate charities?

Tim Montgomerie, who in 2005 founded ConHome, the year before founded with Iain Duncan Smith and Philippa Stroud the CSJ, which has since worked to tackle the root causes of poverty, learning from the work done by hundreds of small charities and urging the government of the day to apply those lessons.

Duncan Smith spoke last. He said that “in every difficult area I found a charity that had solved the problem”, and went on: “We are here to change lives, not to observe them.”

The tone of politics is often rancorous. This event was not like that. In place of partisanship one saw a disinterested desire to help those least able to help themselves.

That is not a very newsworthy endeavour, but across the length and breadth of the kingdom, small charities are striving with slender means but with dedication and understanding to help those the state is too vast and insensitive to know how to help.

Theresa May: The pandemic has shown how urgently we need to fix the housing crisis

1 Dec

Theresa May is Member of Parliament for Maidenhead.

Of the many lessons the pandemic has taught us, one is surely the importance of home. As Covid forced us away from our favourite haunts and meeting places, our homes took on a new meaning altogether – becoming classrooms, workplaces and fortresses against the virus almost overnight.

Yet the varying experiences of lockdown over the last year and a half reflect concerning disparities in England’s housing stock today.

For example, the instruction to ‘stay at home’ in March 2020 meant something entirely different for the 820,000 households living in cramped, overcrowded conditions. The closure of outside spaces disproportionately affected the one in eight who lack access even to a shared garden. And the thousands of children locked down in one-bedroom flats alongside parents and siblings undoubtedly found the move to online learning all the more challenging.

In short, our vulnerability to the social impact of Covid – and indeed the virus itself – was unavoidably shaped by the places in which we live. Yet the truth we must face up to now as politicians is that, while the pandemic shone a spotlight on many of the injustices in housing, these are not new. Building back better must include staring difficult problems in the face.

As Prime Minster, I made it my personal mission to address the inequity in our housing market. We knew we simply could not carry on in the same direction – and I am proud of what we achieved.

We put generational reforms in motion to improve housing security for renters. We tightened up the planning system to ensure developers meet their obligations to deliver more affordable homes. And we abolished outdated restrictions on local authorities to help build the new generation of council homes we desperately need.

It has been encouraging to see the Government advance on these reforms, including through the increased allocation for new social rent in the £11.5 billion Affordable Homes Programme, and the forthcoming Renters Reform Bill.

But let’s be clear. The dysfunction in our housing system is deep-rooted, having developed over multiple decades and under governments of all stripes. Addressing it fully remains one of the fundamental public policy challenges of our time.

And so it is welcome that the Centre for Social Justice has set out to develop a new vision for truly affordable housing in England. Because, as the CSJ expose in an important interim report published this week, there remains today a ‘hidden housing crisis’ that is exacting a huge toll on our nation’s collective health, wellbeing and finances.

Millions of renters are seeing the gains of work undermined by exorbitant housing costs, with over two-thirds of private renters in the bottom two income quintiles seeing more than 30 per cent of their disposable income eaten away by rent.

According to one recent study, it is estimated that nearly two million couples have delayed or chosen not to start a family because of their housing situation. Some 124,000 children will go to sleep tonight in temporary accommodation, facing significantly hampered educational prospects as a result.

Taxpayers are now picking up the bill for decades of too few truly affordable homes being built. Next year, housing benefit expenditure is forecast to exceed £30 billion – and then to double again in the 30 years thereafter as more (and older) households see the more expensive private rented sector as their only option.

We must put this right.

For as I argued while in Downing Street, the focus on helping the ‘just about homeowners’ onto the ladder – vital though this is – has at times distracted from what should be our overwhelming priority as Conservatives: ensuring that everyone has a decent, affordable and secure home in which to live, work and build strong families.

Of course, this argument is not a new one. The Conservative manifesto of 1951, on which Winston Churchill sought his second term in office, was resounding: “Housing is the first of the social services . . . [t]herefore a Conservative and Unionist Government will give housing a priority second only to national defence”.

He was elected on a platform which recognised housing as “one of the keys to increased productivity.” Overcrowded and unsuitable homes were rightly identified as the enemy of work, family life, health, and education.

Margaret Thatcher, similarly, saw the immense potential of social housing as a springboard into home ownership. Indeed, what is often forgotten about the introduction of the Right to Buy is that, in the early years of the policy between 1980–85, more than 250,000 new social homes were built to replenish the stock – giving thousands more families a path to realising the dream of ownership.

Rediscovering our tradition of truly affordable housebuilding for the 2020s is what is needed if we are to address the social, economic and fiscal costs of the hidden housing crisis. Moreover, as polling evidence presented by the CSJ suggests, this would be in tune with the views and desires of the new electorate as it has realigned in the years following the Referendum.

So now I call on Conservatives to let us make it our shared mission, once again, to fix this hidden housing crisis as a central plank of our levelling up agenda. And even as we hope to have put the worst of the pandemic behind us, we must never forget just how much home matters.

Gavin Rice: There are better ways to invest in Universal Credit than the £20 uplift

26 Oct

Gavin Rice is Policy Director at The Centre for Social Justice.

It’s only when history comes to be written that unsung heroes emerge.

Edmund Hillary may be remembered as the first person to climb Everest, but it was Tenzing Norgay who carried his bags. We have all heard of Neil Armstrong and Buzz Aldrin, but how many know that Michael Collins orbited the Moon alone for 21.5 hours while his colleagues made history?

Likewise, while the cause celebre of the pandemic has been Rishi Sunak’s salary-saving, budget-busting furlough scheme, the quiet saviour of the lockdown has been Universal Credit.

In the first two weeks of the pandemic, Universal Credit (UC) processed one million new cases. At the peak of demand the number receiving this lifeline benefit more than doubled, from 2.9 million cases before the pandemic to a high of over six million – an increase of over 100 per cent. In September there were still 5.8 million claimants, more than was ever originally envisaged, and after the end of furlough last month there will be more to come. Through the economic maelstrom of the last 18 months, 96 per cent of payments were made on time.

Not that Chancellor will be talking about that when he reveals his Autumn Budget on Wednesday. His decision to end the £20 per week uplift in October led to six former Secretaries of State for Work and Pensions, and 50 Conservative backbenchers, to call publicly for its retention.

UC was designed by the Centre for Social Justice (CSJ) with two main goals: reducing the complexity of the old, “legacy” system by rolling six overlapping benefits into one, and eliminating financial disincentives to work.

Before UC, welfare claimants could find themselves no better off even when taking on work, since their benefits would be withdrawn. In some cases 100 per cent of someone’s earnings could be lost in withdrawal, removing any incentive to work more. UC slashed these barriers via the “taper”, meaning work would always pay.

Inefficiencies were eradicated by means testing on a household basis. UC produced a data-rich system, with clear information about each household’s income available centrally to the DWP. And conditionality was introduced, meaning claimants would be obliged to look for work if they were able. Work coaches helped hundreds of thousands to stand on their own two feet.

But the pandemic came like a bolt from the blue. The Chancellor and Thérèse Coffey, the Secretary of State for Work and Pensions, agreed an emergency increase of £20 to the Standard Allowance – the basic rate of UC given to all claimants. In this way they protected people’s incomes at a time of national crisis. Work search duties and sanctions were rightfully suspended.

More money in welfare isn’t everything, but the £20 increase followed a decade of cuts to benefits through the benefits freeze and benefits cap, which kept UC falling in real terms. That’s why the Centre for Social Justice supported keeping it, as a way of partially redressing these reductions.

But there is now a vital conversation to be had about the future of UC. There are many other ways the Government can invest in this vital national infrastructure other than the much-discussed £20.

First, it could cut the taper rate of UC down – the CSJ originally recommended a rate of 55p in the pound, rather than the current 63p. Softening the taper would eliminate the situation, flagged by Sir Keir Starmer, in which someone on UC who is working full time on minimum wage could face a withdrawal rate of 75 per cent, since they would be liable for income tax and national insurance. This would seriously benefit the 40 per cent of UC claimants who are in work.

Money saved by removing the £20 uplift could be put back into the Child Element to support households with children, thus helping families struggling with the cost of living at a time of high inflation and soaring energy prices.

The maximum amount of childcare covered by a UC award could be raised from 85 per cent to 100 per cent, as called for by the CSJ. And, at zero balance sheet cost to the Treasury, the maximum rate of monthly debt recovery for UC recipients eligible to repay arrears or historical benefit overpayments could be reduced from 25 per cent of their incomes down to 10 per cent.

But there could be much more to Universal Credit than that. The goal of levelling-up, reskilling for a low-carbon economy, increasing labour productivity, and relying less on low-skilled immigration will need a streamlined, time-tested state apparatus to drive it.

We have record numbers receiving benefits, yet also have a labour shortage. UC should provide the structure to link the welfare system to the jobs market. Why not ‘bake’ skills into claimant contracts?

The DWP should become a skills department, not just a deliverer of cash. Through partnership with employers and educational providers, UC should become the engine of opportunity.

No-one is going to sing about it. Wednesday’s budget will barely mention it. But just like Sherpa Tenzing and Michael Collins, Universal Credit will do the heavy lifting in this recovery.

Steve Baker: Wycombe’s food insecurity levels are a huge wake-up call. We must renew our vision of Conservative social justice.

3 Aug

Steve Baker is MP for Wycombe, and served as a Minister in the former Department for Exiting the European Union.

On the one hand, it is simple to tell just by walking down the streets of High Wycombe there are people who do not find life easy. It’s probably true of a town of any size across the country. On the other, what did come as a surprise is the Food Foundation’s report, splashed by The Guardian, showing Wycombe had the greatest food insecurity in the whole of the UK. This is not something to dismiss lightly, and we must take this as a clarion call to action. 

The Wycombe constituency has some of the poorest and the richest people in the country, sometimes only living a short distance away from each other. This brings its own challenges. When civil servants are creating public policy and look at Wycombe the overall demographic is one of affluence. It is easy to think that everything is all right. But the constituency contains some areas of true deprivation. People in these areas have worse health outcomes, worse education results, and all the other traditional markers of a hard life. Low pay is compounded with high housing costs which squeeze low-income household budgets to breaking point.

The Coronavirus lockdowns and restrictions have brought these areas into sharp focus. There was a huge strain on working parents on low incomes; they had to continue to work, home educate children and provide more food such as snacks and lunch which were normally provided at school. My caseworkers were speaking to parents with young children who had not yet received their free school meal vouchers, and this meant they were finding it hard to feed their family.

Many people had jobs, but some had no work or a severely reduced income as a result of the Covid lockdowns and restrictions and did not qualify for any of the Government support schemes due to the nature of their employment. These were people who had to ask for help to feed their families for the first time. 

It is clear the lockdown pushed some people to the edge. I do not want to rehash all the things I said about the need for lockdown restrictions to be lifted as soon as it was safe to do so, but these were exactly the sort of people I had in mind when I said it. It wasn’t merely about allowing people to go abroad on holiday; it was about allowing hard working people to manage their everyday lives.

Before I became an MP, I did work for the Centre for Social Justice and I have always had an interest in making sure the least affluent in society are lifted up. For a long time, I have said more money should go into UC; we spend an enormous amount on the welfare state and it should help the people who need it, but this clearly doesn’t always happen.

I have previously lobbied ministers about the five week wait for benefits to kick-in once a new application is made. I know the £20 a week extra on Universal Credit has been welcomed by those who rely on benefits and, ideally, it should be kept. But the amount paid in UC is only one aspect of supporting those most in need. We have not yet broken the cycles of poverty the CSJ identified before we came to power in 2010: it is time now to renew our vision of Conservative social justice.

Charities and public agencies need to work alongside those who use foodbanks regularly or are food insecure to offer life coaching and mentoring. Getting the balance right here will be key. I do not want an authoritarian approach to telling people what to do, but most of us could use a helping hand or sounding board every now and then.

Buckinghamshire Council is working on a project to bring together debt support and advice, helping people get back into employment and addressing local skill shortages and training opportunities, greater take-up of food voucher schemes and better support to access benefits to ensure income maximisation.

All these schemes will help but the best way of lifting people out of poverty, and the knock-on effect of food insecurity, is through work and higher paying jobs. The Government’s Plan For Jobs includes the Kickstart and Restart scheme, and gives support for apprenticeships, traineeships and doubling the number of work coaches to get people back on their feet and into work. 

That’s a great start, but I want long-term prosperity for every one of my constituents. We must unleash the wealth creating potential of our great United Kingdom to secure it.