Citizens Advice responds to Autumn Statement

“Upward trend is not filtering down” says Citizens Advice

Responding to today’s Autumn Statement, Chief Executive of national charity Citizens Advice, Gillian Guy, said:

“The upward trend is not filtering down. Optimism in the Houses of Parliament is not being felt in our clients’ homes.  Despite the good news on growth, millions are still struggling. Small steps on energy bills and rail fares today will put a bit of extra cash in people’s pockets but the gain will be fleeting.

“Short-term fixes to the cost of living should be met with a large dose of scepticism.  We face enormous challenges on youth unemployment, in making the energy market fairer and more transparent and sorting out a woefully inadequate housing stock.

“Encouraging employers to take on young people is good news but with nearly one million under-25s out of work and a pensions time bomb to fund, new schemes must not become a mask for cost-cutting.  A £50 cut in energy bills is better than nothing but with price hikes of 37 per cent over the last three years, people will fear further rises will just keep on coming.”

On capping welfare spending:

“An artificial cap on the state safety net risks the wellbeing of millions of people. People who face difficulties through no fault of their own, like those with a disability or whose wages cannot keep up with sky-high housing and childcare costs, should not pay the price for a political gamble.

“With working-age support set to rise by just 1 per cent and pensions going up by 2.5 per cent, the proposed cap will hit people who are already set to lose out because of reforms elsewhere. Imposing a cap could mean that many people entitled to help with sickness, disability or housing costs lose out simply for seeking help the day after the arbitrary budget has run out.”

On raising the state pension age:

“For those enough lucky enough to be able to work into their 70s, the rise in the state pension age is a positive move to address what is currently an unfair generational burden. But those who suffer ill health before reaching retirement will have pitiful levels of support through disability benefits which have been stripped away under this government.

“Young people today will have to foot the bill for our ageing population so easing the burden by raising the pension age to reflect life expectancy is sensible. Ministers must deal with labour market problems like zero hours contracts, skills shortages, unpaid internships and wages which have fallen 14 per cent in five years, to ensure working for longer is financially and personally rewarding.

“Changing the system to reflect the fact that people increasingly are able and willing to work longer is positive, but ministers must make allowances for people in physically demanding jobs or with caring responsibilities who cannot work into old age. Working-age people living in areas with a lower life expectancy could be hit twice as they lose out on their pension and see sickness support falling in real terms.”

On support for young people:

“Young people want a hand-up not a hand-out. Since the credit crunch started, soaring numbers of young people sought our help keeping a roof over their head, whilst the number of people aged 17-24 seeking advice on support to get into work has more than doubled.

“Requirements on young people working hard to find a job are already stringent and if Jobcentres are too quick to withdraw young people’s support then the personal and economic cost could be huge. A system which is all stick and no carrot will make it even harder to secure the economic recovery and deliver future state pension funding.

“Done well, training schemes for young people in Jobcentres could have a positive impact but must not just be an excuse to cut costs. Localised, personal support is exactly what Citizens Advice Bureaux deliver every day and applying these ideas to helping young people into work could have an extremely positive impact. The traineeships people are required to take must genuinely increase their chances of getting a job and not be a box-ticking exercise.

“Encouraging businesses to take on young people is a sensible measure, but the two-year wait for it to come into force will be of no comfort to the nearly one million young people currently out of work.”

On Free School Meals:

“Extending Free School Meals and raising the income tax threshold  will be a boost to hard-pressed families, but the failure to make the tax threshold rise and Universal Credit work together will leave many families worse off.

“The Government has made a number of positive steps in helping parents afford the cost of raising children but flaws in the design of childcare support under Universal Credit mean many parents will be worse off. The new single benefit will actually see some low-income families suffer a cut of up to 25% on support for paying childcare costs.

“Our Universal Credit research shows that the poor design of the new system threatens to undermine the Coalition’s income tax threshold rise and ministers’ aim to make every hour of work pay. Sorting out this confusion is surely a small price to pay to rescue two of the Government’s main goals.”

Jobs

“More people in work is good news for the economy and households across the country. Yet, many people are still struggling because the work available pays less than before the recession, is part-time or only temporary. The Government needs to make sure that increase in employment means an increase in permanent, full-time work.”

Housing

“We want to see immediate action to get our housing stock sorted. A full-blooded commitment to building more houses could dramatically ease the cost of living. Poor housing stock, particularly the lack of smaller, affordable homes, lies at the roots of the cost of living and welfare issues the Government is trying to address.

“Allowing people with a job in another part of the country to move to the top of the housing waiting list will be good for that individual but will have harsh knock-on effects for those forced to wait even longer.  The Government’s priority should be long-term investment in getting our affordable housing supply up to scratch, to get the waiting list of 1.8 million people down.”

On energy bills:

“A saving of up to £50 on energy bills will offer some relief for CAB clients, but with energy prices rising eight times the rate of wages, people will still be seriously worried about how they can afford to have a warm home. The energy market is in desperate need of reform to make it more transparent about how and where firms are making profits.

"The Government is right to follow Citizens Advice recommendation to prioritise help through ECO for the fuel poor and increase the help available. But the Government should go further and move costs for the Warm Home Discount and ECO from bills to taxation so that poorer households are not pushed into fuel poverty as a result of paying for the very support designed to help them reduce their bills.

“A local-led approach, funded from taxation, to end the scandal of people on low incomes living in homes which seep heat, is a more sensible and practical way forward.  People on low incomes  cannot afford to wait until 2017 for support as bills continue to rise."

On fuel duty and rail fares:

“Cancelling the rise in fuel duty and limiting rail fare rises will help hard-pressed commuters who are finding the cost of travelling to work, coupled with other rising bills, a strain on their finances.”

“The Chancellor has missed an opportunity to help people who work unsociable hours or have part-time jobs. These people miss out on savings on travel costs because they can’t buy a suitable season ticket.  The Government needs to recognise the penalties workers outside the nine to five bracket face and help them by introducing a season ticket that saves them money on the journeys they make ”

-ends-

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.