Spring Statement Affordability Test

Lord Forsyth of Drumlean Excerpts

Wednesday 23rd March 2022 Lords Chamber

Asked by

[Lord Forsyth of Drumlean]

To ask Her Majesty’s Government what steps, if any, they took ahead of the Spring Statement to conduct an affordability test on the impact of the rise in cost of living, the reduction in Universal Credit payments of £20 per week and inflation rates for lower income families, and if so, what did it conclude.

[Baroness Penn (Con)]

The Government take seriously impacts on the cost of living for households, including when considering policies for the Spring Statement, and are providing support worth over £22 billion in 2022-23 to help. Her Majesty’s Treasury has published analysis alongside the Spring Statement, estimating the impact of policies announced, since the spending round 2019, on households. This shows that, in 2024-25, the tax, welfare and spending decisions will have benefited the poorest households the most as a percentage of their income.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am grateful to my noble friend, but this is not 2024-25. What people need now is cash in their pockets, not tax cuts later in the Parliament. Had the Treasury done an assessment—in fact, anyone can do the assessment—it would have concluded that the poorest people in this country simply will not be able to meet their bills, because of the impact of electricity and energy costs, because of food inflation and because CPI does not measure the real inflation rates that are felt by the poorest families in the country. Will my noble friend ask her colleague the Chancellor, whose measures I welcome today, to look again at the recommendation from the Economic Affairs Committee of this House to restore the £20 a week payment for people on universal credit?

[Baroness Penn (Con)]

My Lords, the Government absolutely understand that people need support with their household bills now. That is why, previously, we had announced £9 billion to support households with energy costs over the coming year. We consider all recommendations by the Economic Affairs Committee very carefully. Of course, we have provided further support to those on universal credit through cutting the taper rate and increasing the work allowance.