Jayne Dowle: Time to think of families just about managing

According to a new report by a respected think-tank, the Institute for Fiscal Studies, his Government is presiding over the biggest fall in our living standards for generations. In five years’ time, average family incomes will be just four per cent higher than at the time of the financial crisis a decade ago. In real terms, we will be just £5,000 a year better off. This is the slowest rate of growth in 60 years.

These predictions should be a huge blow to Theresa May’s pledge to make Britain a country which “works for everyone”. Her promise to help the millions of us who are “Just About Managing” or “JAMs” needs to offer more than a cute slogan. This Budget is a chance to put the Government’s power to work for those who work hard.

Can Mr Hammond do it? We shall see. However, if he is reading this, I would like him to hear a few home truths. There are some things he can control, and there are some things he cannot – or will not. His Government’s increase to the National Living Wage – to the princely sum of £7.50 an hour in April for over-25s – has been made much of. It is a step in the right direction, but anyone earning it will tell you that it’s still nowhere near enough.

The legislation is welcome. As is the rise in the level of earnings at which income tax is payable; the personal allowance is set to go up to £11,500 in the next year. What, though, of the predicted four per cent rise in some council tax bills? What of the unfettered hikes in the costs of gas and electricity? What about the increase in insurance premiums for homes, possessions and motor vehicles, imposed upon safe and legal drivers because of the irresponsible actions of others? What about the shocking rise in council tax – of almost five per cent in some areas – to pay for the spiralling costs of social care?

Will his Budget be prepared to take into account all of these demands on our own household budgets and make allowances for them? If it does, it will be a first for any government. No matter how many think-tank reports are presented to them, Ministers seem incapable of accepting that household incomes are under pressure like never before.

It is this constant rise in the cost of these most basic commodities and services which make it so hard for typical working families to manage. And this is not to even begin to mention the inequitable benefits system, under which we might file everything from carers’ allowance to student loans.

Of course, there are feckless unemployed families who have been that way for generations. However, these are outnumbered by the rest of us, who want to get on in life and look after their vulnerable relatives and children, but simply can’t afford to do it without support. I welcome any reform to cut down on the numbers of those who abuse the system, but urge Mr Hammond to look where his priorities should be.

Is it any wonder that the UK has one of the highest levels of personal debt in the world? In the overwhelming majority 
of cases this is not because families are splurging the cost 
of Caribbean cruises on the credit card. It’s because some months, they simply don’t have any other means of paying the mortgage.

The Resolution Foundation, another think-tank, produced a handy definition of a JAM family. Both adults are likely to be working, but the joint income probably won’t exceed £50,000. Almost every penny that is earned goes straight back out again; in most cases with less than one month’s wages put away as savings. A couple of decades ago, these families would probably own their own home. Now, thanks to frankly unaffordable house prices, even in our own region, they are probably renting; so with no equity or collateral.

It’s a life. And it’s a life that millions of people are living. Never before have the incoming and outgoings of the people who make up the backbone of Britain been so openly available and pored over. No politician can say that they don’t know what they are dealing with, or have no access to the issues which affect those whose vote they seek. Yet Budget after Budget seems to pay only scant regard to making fiscal changes which could make life easier to manage.

We don’t expect the Chancellor of the Exchequer to produce a magic wand from his red boxes and make it all go away. However, it would be heartening if just for once, a politician could show that he understood and try to make amends.

The lack of empathy to date not only underlines the disconnect between government and voters, it also makes a mockery of the Prime Minister’s promise to help. Can this coming Budget offer real solutions to real people’s problems now, or will it be yet another case of jam tomorrow?