This budget must ensure everyone has enough income to meet the basic needs of life

As we await the chancellor’s first budget at the end of this month, it’s a shocking bit of context that around one in four of us is financially stressed. Whatever the strains on the public finances, this level of financial pressure is bad for people and for the UK economy. As a charity supporting people through difficult financial times, we hear day in, day out from our clients how tough it is to make ends meet at the moment in Britain. 

Michael, who came to us for help, was unemployed and in debt after a serious accident left him unable to work. After difficulties trying to claim Personal Independent Payment, he had no choice but to turn to borrowing to cope. His debts quickly spiralled, before finally he came to StepChange for support. 

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Sadly, Michael’s case is not unique. Our advisors have hundreds of conversations with people simply unable to make ends meet every single day. More and more often, we’re unable to help people through conventional debt advice , so we need to see the government use the budget on Wednesday (30 October) as an opportunity to address the economic and social challenges we face as a society.

We’ve already recently outlined in the Big Issue why we see it as so vital to reverse the two-child limit and the benefit cap. These actions are high on our short-term budget wish list, along with ensuring any deductions from benefits are only made if they are affordable. That’s because, among StepChange clients, the link between poverty, benefits and problem debt is becoming increasingly entrenched – so tackling poverty, especially through the benefits system, is something we see as essential.

Much research in recent years boils down to a basic problem: if you’re on a low income, for whatever reason, your chances of getting trapped in a constant cycle of debt are much increased. 

The only real way of squaring this circle in the long-term will be to ensure that everyone has enough income to meet the basic essential needs of life. How to do this might be contentious, but the question of “how much is enough” is big enough to warrant serious government attention. We’d like to see the chancellor establish a Minimum Income Commission to explore this, going beyond the child poverty inquiry, to underpin a long-term strategy.

Back in the here and now, we also really need to see the budget pick up decisively on the longstanding and deep-rooted debt problems that derive from council tax and energy bill arrears. Far too many households have priority debts that they can’t afford to repay, which are then chased under policies that set people up to fail. These often make people’s debt problems worse. Affordable repayment schemes, rather than inflexible and often frightening debt collection measures such as bailiffs, are what we need here.

Overall, we don’t underestimate the challenges the chancellor faces in trying to balance all the competing priorities. But the welfare and financial resilience of citizens, not to mention the effect that failing to secure these can have on health and the wider economy, needs to rise up the list.

Vikki Brownridge is the CEO of StepChange Debt Charity.

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