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Budget 2012: George Osborne is hitting families even harder

Vidhya Alakeson

This post originally appeared on The Guardian website

Although the chancellor will only step up to the despatch box to present his budget later today, we already know about the changes that will have the greatest impact on Britain's working families. That is because governments are in the habit of announcing changes years in advance, ensuring families are caught unaware when the changes are actually implemented. It was in his 2010 budget rather than today's that the chancellor announced a £2.4bn cut to tax credits that will take effect from this April. According to analysis from the Resolution Foundation, none of the 2 million families on low to middle incomes currently claiming working tax credits will be unaffected, with some standing to lose thousands of pounds.

This year's cuts follow hard on the heels of last April's cuts to tax credits. With the price of essentials still high, many families are struggling to see how to tighten their belts further. Heating has already become a luxury, as has the car, and they have already downgraded to value brands at the supermarket. In a survey of nearly 2,000 parents conducted by Netmums, the online parenting organisation, more than half of those surveyed felt they were living on the edge, with only a small increase in spending or a small decrease in income enough to tip them into crisis. Nearly one in five parents reported skipping meals themselves to make sure they could still put food on the table for their children.

Vidhya Alakeson

This piece first appeared on the Guardian's Comment is Free site.

Laura works 25 hours a week as an accounts administrator. After paying for childcare, she takes home only half of what she earns. This is an all too familiar picture for working families in Britain and, according to Monday's report by the Daycare Trust, things are getting worse. The average part-time nursery place for a child under two now costs more than £5,000 a year, and more like £6,500 in London. Lower income families feel particularly hard hit this year because of last year's cut to support for childcare costs, and will find themselves even worse off after this April's change to tax credits. Eligibility for working tax credits will be tied to working longer hours and that will mean paying for more childcare.

Universal Credit: winners and losers

Vidhya Alakeson

This post originally appeared on the Public Finance blog

Iain Duncan Smith has found an extra £300m for childcare in his Universal Credit, but women who want to work longer hours will lose out. The result is only going to make households worse off

Earlier this month, the government announced the level of support that would be available for childcare under Universal Credit when it is introduced in 2013. This is equivalent to the support currently available to low-to-middle income families through the childcare element of the Working Tax Credit.

‘Generation rent’ needs a helping hand

Vidhya Alakeson

This blog originally appeared on Public Finance

Yesterday’s report from the National Housing Federation predicted that by 2021 home ownership in Britain will have fallen to its lowest levels since the mid 1980s. 64 per cent of people will own a home compared to a peak of 73 percent ten years ago.

The government’s response to these predictions was half right. The minister for housing, Grant Shapps, talked about the need to build more homes. This would of course help address the chronic undersupply of housing, with the number of new homes being built at a post-war low. But it was also half wrong by continuing to focus exclusively on meeting people’s aspiration to own and ignoring the potential for the private rented sector.

Making a Rented House a Home

Vidhya Alakeson

Published today, the Resolution Foundation’s Making a Rented House a Home outlines the shocking fact that the average low to middle income household buying a home today would have taken 31 years to save for a deposit , compared to 8 years in 1983. Last week a report by the estate agents, Savills, revealed that for the first time in Britain’s post-war history, more people are becoming tenants than home owners. We are witnessing a major transformation in our housing market that will see Britain become more like Germany and Switzerland where more than half the population rent rather than own a home.

The long-term problem for "generation rent"

Vidhya Alakeson

This article first appeared in the New Statesman

We need to stop relying on home-ownership as the only way to build wealth if we're to have an adequate social care system.

On housing, while Ed has got it wrong, Boris has the answer

Vidhya Alakeson

This blog first appeared on Left Foot Forward

In his speech on social responsibility today, Ed Miliband argued that low income working people and those doing voluntary work should be given priority for council housing.

While this might help position his leadership, it is misguided as a piece of housing policy. Shifting ordinary working families into social housing to replace more vulnerable groups does not fix a housing crisis, it simply creates a new one. Local Authorities will find themselves paying higher costs to house vulnerable families and the homeless in the private sector.