Auriga’s Response to Spring Budget 2023 – a mixed bag for low-income households
At Auriga, we are at the forefront of the cost of living crisis, helping an average of 1,800 vulnerable and low-income households in the UK every day, on behalf of our partners. With price rises set across the board for April, the Spring Budget came with some important impacts for the people we support, and we have outlined our top takeaways:
Extending the Energy Price Guarantee
This was a welcome and expected response, given the avid campaigning led by Martin Lewis of Money Saving Expert. With this extension, there is at least some further support for individuals most in need at present, allowing households some protection from the price rises until at least June.
However, with the end of the Energy Bill Support Scheme, and seemingly no significant plans for longer term support following the significant increase of energy prices from April last year, the question remains, what is next? Even with the price guarantee extension, many low and middle income households are already struggling with deficit budgets and risk falling deeper into fuel poverty and debt, with National Energy Action predicting 7.5 million UK households will be in fuel poverty from April.
Cutting prepayment meter costs
A real positive to see is the scrapping of the “poverty premium” that means 4 million prepayment meter customers now pay the same as direct debit customers. Removing the extra costs for households on prepayment meters, who are often on a lower income, will reduce the risk of self-disconnection and put an extra £45 a year into their pockets.
This comes as very welcome news, especially in the light of the recent horror stories of forced prepayment meter installations – the ban of which has also thankfully been recently extended by Ofgem.
Commitment to Net Zero for all?
With extra long-term investment in low-carbon energy projects and other sustainable energy sources, such as nuclear, the financial commitment of over £20 billion from the government to the Net Zero mission is a positive with increased activity and support business to continue innovation and investment from a science and technology perspective.
The challenge is around the need for more support of domestic properties for energy efficiency and the transition, particularly for low income homes. There can be no mission to Net Zero that does not pass through the homes of the most vulnerable. It seems clear that there needs to be a real, large-scale and long term plan to follow this through for all to truly benefit. The impact is huge and can make a real difference.
Not only would clear and accessible investment in energy efficiency positively impact the Net Zero mission, but it would also go a long way to reduce fuel poverty, reduce energy bills and ultimately save money for vulnerable families across the UK.
Addressing the challenge of childcare costs
We have witnessed childcare be an expensive barrier to extra working income for many households. Current childcare costs in the UK are some of the highest in the world and a drain on domestic finances.
If rolled out effectively, we are optimistic that the expansion in the childcare offer to families with younger children can be life changing for many parents across the UK. The upfront and increased childcare support for families on Universal Credit should mitigate parents having to go into debt to work, and the increased free childcare hours will hopefully provide more of a springboard to give parents more choice when it comes to working or increasing their hours.
Fundamental changes to disability benefit system
The Chancellor announced the scrapping of the work capability assessment (WCA) to determine eligibility for sickness benefits. This is welcome news, but the mechanism for disabled people to receive financial support in the future is still a concern as Personal Independence Payment (PIP) entitlement would appear to hold the key for people to receive disability benefits. Without reforms, that could induce more worry and concern for people with disabilities.
The Chancellor announced tougher sanctions for benefits claimants who fail to meet requirements to look for work or choose not to take up a reasonable job offer; the concern here is people with disabilities or even carers being asked to take part in inappropriate work-related activities for the fear of their income being sanctioned or even losing their benefits.
Universal support will see the government spend up to £4,000 a person to help 50,000 disabled people a year find appropriate jobs. The key word here is ‘appropriate’ and we are hoping that this is implemented effectively.
If you are looking to support your customers through the ongoing energy crisis, contact our client solutions team at firstname.lastname@example.org