Centre for Research in Social Policy

School of Social, Political and Geographical Sciences


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Budget comment by Professor Donald Hirsch, Centre for Research in Social Policy, Loughborough University

Cuts in welfare were at the heart of the then Chancellor’s agenda coming into the present Parliament; two years later, not a single new measure affecting benefits was announced in this Budget. Any new welfare savings have been formally ruled out in this Parliament, with the proviso that if spending breaks a new cap, further cuts will be made after 2021.

Yet if you think this represents a pause in welfare cuts, think again. Those announced by George Osborne continue to feed through: next month alone will see the introduction, for every new family on low earnings or out of work, cuts in tax credits or Universal Credit of £10.45 per week, plus in larger families, £53.30 for each child after the second one.  And for all working age people getting benefits or credits, Mr Osborne’s freeze in their level continues, allowing their real value to be eroded by inflation.

For low income households, all this represents a now familiar trend in living standards. The Office for Budget Responsibility’s forecasts released today are significantly gloomier than in 2015.  The graph shows the result: steady improvement in the value of pensions, stagnant real earnings and falling real benefits – affecting millions of families both in and out of work who rely on declining state help.



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