Jeremy Hunt: Supporting families by uprating benefits in line with inflation

Dear Jeremy Hunt,

The Families and Work Group is writing to you to ask that the Medium-Term Fiscal Plan includes a commitment to increasing benefits in line with inflation, a commitment originally made by the former Prime Minister Boris Johnson. As a coalition of organisations supporting and representing parents and carers and their interests in the workplace, we are increasingly concerned by the difficult financial situation in which many families find themselves.

Prior to the inflationary pressures behind the cost-of-living crisis, the 2022 Working Families Index found that 60% of working parents reported that raising a family had become financially more difficult over the last three years. The survey also indicated that half of two-child couples in the UK were falling below the Joseph Rowntree Foundation’s minimum income standards and, alarmingly, that a third of parents and carers are already taking on paid work beyond their contracted hours to bring in additional income.

Given that many parents are already taking on additional work, or are unable to due to caring responsibilities and a lack of affordable childcare, proposals to freeze benefits risk plunging huge numbers of working families into poverty: over 700,000 people by Legatum Institute’s estimates. The CSJ has estimated that without further support families with children will experience an estimated £491 fall in real income, while a lone parent will see a £285 fall in real income in the three months. Failure to adequately support these families risks undermining the Government’s ambitions for economic growth as families cut back on spending, especially as the cost of energy and food rises.

In addition to the harm this will cause working families, it may result in higher costs to the Treasury as family financial resilience is further eroded.

We therefore ask you to:
– Commit to increasing benefits in line with inflation
– Pledge to support working parents and carers with appropriate financial aid and supply-side reforms, such as childcare and flexible working opportunities that enable those with caring responsibilities to better access the labour market.

Yours sincerely,
MEMBERS OF THE FAMILIES AND WORK GROUP