Budget will leave struggling families “in exactly the same place next year”, warns JRF

John Healey’s first budget will help families this winter but leave those who are struggling “in exactly the same place next year” without fundamental reform, the Joseph Rowntree Foundation has warned.

The anti-poverty charity said its analysis of pre-budget forecasts shows living standards are projected to fall at the fastest rate on record over this parliament, with the lowest-income households hit hardest.

JRF welcomed the immediate help with energy bills and the promise of reform to bring energy costs down. But it said the winter support was “another temporary intervention”. “After years of sticking plasters and with bills about to spike again, families have waited far too long for the government to get to the root causes of the problem,” it said.

Julian Hartley, the foundation’s group chief executive, said: “The government is right to make the cost of living a priority to improve living standards. People need to feel that paying the rent, heating their home and putting food on the table is becoming easier. Today’s budget recognises that pressure but falls short of what’s needed.”

JRF set out three changes it wants from Andy Burnham’s government. It wants Local Housing Allowance, the housing support for private renters on benefits, linked to local rents again every year, alongside rent controls to slow rises. It wants a protected minimum floor in Universal Credit, so that debt deductions and the benefit cap cannot push families below a basic safety net. And it is calling for an Affordable Energy Guarantee, giving every household a block of cheaper energy.

“Millions of households are going without the essentials. No government should accept that,” Hartley said. “Nor should it expect people to believe the country is getting better if their own lives keep getting harder.”

The charity also issued a political warning, saying a government presiding over declining living standards “is unlikely to win re-election”. Hartley added: “Families cannot keep being asked to wait for growth before their lives improve. Improving their lives is part of how we get that growth.”

The main help in the budget is a £100 Household Energy Payment for up to 20 million households in council tax bands A to D in England from January, alongside VAT kept off electricity until July and gas standing charges scrapped by the end of 2027. The energy consultancy Cornwall Insight has forecast that the price cap could rise 16% in January.

The Office for Budget Responsibility’s own forecast backs up the charity’s concerns. It expects real household disposable income per person in 2030/31 to be more than 0.75% lower than it forecast in March and only 2% above its level before the pandemic.

Read our full scorecard of how the budget measured up to Left Field’s three tests.