Record employment and strong real wage growth against a backdrop of historically low inflation served to boost living standards in 2016, while a big increase in the minimum wage and the reversal of planned cuts to tax credits protected those on modest incomes.
But the outlook for pay and employment growth has weakened in the wake of the EU referendum vote, while inflation is expected to rise more quickly. In the face of these headwinds low and middle income families face an additional squeeze with£12 billion of welfare cuts planned for the parliament, with new Universal Credit recipients likely to face the biggest losses of all.
What is the new outlook for living standards over the parliament? What should the Chancellor do to support household incomes in his Autumn Statement? And is it time to rethink the planned cuts to Universal Credit?
At an event at its Westminster offices, the Resolution Foundation presented new analysis of the outlook for household incomes over the parliament, and the extent to which tax and benefit changes, including cuts to Universal Credit, will support or squeeze living standards. Heidi Allen and Iain Duncan-Smith then debated how the Conservative government should support ‘just managing families’ before taking part in a Q&A.