Loan sharks and economic predators will profit from the chancellor’s indifference to the fate of the least well-off
Facing economic headwinds that will wreck millions of household budgets in the months ahead, the country’s poorest families are acutely vulnerable and exposed. Speaking to the House of Commons Treasury committee on Monday, the chair of the Office for Budget Responsibility confirmed that welfare benefits will lag significantly behind inflation for the next 18 months. The Resolution Foundation thinktank estimates that the cost-of-living squeeze will force 1.3 million people into absolute poverty next year, including 500,000 children. The incomes of the poorest quarter of households – the vast majority without savings to fall back on – are set to plummet by 6% in real terms.
Providing next to nothing by way of direct support and mitigation, Rishi Sunak’s spring statement left these families to fend for themselves. To link benefits to the rising cost of living was just not “doable”, Mr Sunak told the Treasury committee. That is a political choice that, as a new study from the Centre for Social Justice makes distressingly clear, will exact a high toll in human misery; if the state refuses to provide an adequate safety net, predators will move into a world where desperate people resort to increasingly desperate measures.
