Spring Budget 2024: What do Jeremy Hunt’s announcements mean for low incomes?
Above: Watch Chancellor Jeremy Hunt’s budget in full. Credit: Sky News.
On Wednesday 6th March, Chancellor Jeremy Hunt announced his Spring 2024 budget. Following the Autumn 2023 budget, decisions announced included a welcome extension of the Household Support Fund (HSF), longer repayment periods for people on benefits taking out emergency budgeting loans from the government, and a cut to National Insurance payments by 2p.
As the cost-of-living crisis persists, the Household Support Fund is a lifeline for so many families struggling to afford even the essentials. Reliance on the third sector and local authorities has had to increase to compensate for support not granted by central government, and decisions such as the six-month extension of the HSF are welcome but do not go for enough to combat the worsening situation that millions of households across the country are finding themselves in. In Liverpool alone, 330,000 residents have been helped with food, fuel, and emergency costs since the fund’s launch in 2021.
In addition to the HSF’s six-month extension, Jeremy Hunt also announced a 2p cut in National Insurance payments. His reduction as announced in the Autumn statement was brought into effect in January, bringing payments down from 12% to 6% following this subsequent reduction. This will reportedly benefit 27 million workers, with the Treasury stating that the average worker on a salary of £35,400 will save over £900 per year as a result.
Despite this, the Office for Budget Responsibility (OBR) have shown that incomes are likely to remain lower than their level at the 2019 general election by the end of this parliament. The Resolution Foundation have stated that “anyone earning up to £19,000 will still be worse off than if the personal allowance had been increased in line with inflation”, with the “biggest earners” being those “with salaries over £50,000”.
Also, there has been an extension to the repayment period for those on Universal Credit who have needed emergency support from the government. Beforehand, this period stood at 12 months but has now been doubled to 2 years. Martin Lewis ‘Money Saving Expert’ responded to this announcement saying: “This is a welcome move. It lessens the burden on some of the payback of lowest incomes”.
Debt Relief Order (DRO) fees – previously £90 for those struggling with debt in the UK – have been scrapped from the 6th April. Last year it was reported that the number of people taking out a DRO across England and Wales increased to a record high in the third quarter of 2023, surging 49% compared to the same period the year prior.
Whilst areas of household funds seem to have benefitted from these budget announcements, the OBR said that Hunt’s plans “meant that funding for non-ringfenced government departments – including local government and prison services – was on track to fall by 2.3% per year”. The Resolution Foundation has reported that the UK is facing a record low for living standards, stating that the budget is based on cuts to “already faltering public services”.