Academics Stand Against Poverty UK argues that the Budget offers inadequate, short-term poverty relief instead of lasting action on social security, housing and inequality, urging the government to tax wealth fairly and establish a stronger financial safety net for households.
Academics Stand Against Poverty UK argues that the Budget offers inadequate, short-term poverty relief instead of lasting action on social security, housing and inequality, urging the government to tax wealth fairly and establish a stronger financial safety net for households.
In September, ASAP UK Trustees urged Andy Burnham to treat tackling poverty as the foundation of his programme of renewal, not a residual concern to be managed around fiscal rules.
Chancellor John Healey’s first Budget is the first real test of that appeal. Its subtitle, Breathing Space for Today, Fresh Hope for the Future, promises relief now and change later. Here, ASAP UK Trustees ask whether either amount to a higher floor under households.
Adequacy first
ASAP UK’s 2024 Manifesto Poverty Audit judged the adequacy of social security the most pressing problem, with no party offering transformative change. As we noted of the King’s Speech, ambition has been lacking. A new Prime Minister–Chancellor partnership has not renewed this ambition; rather the Budget fits the previous pattern. Its centrepiece is a £100 Household Energy Payment for up to 20 million households in council tax bands A–D in England. Yet forecasters expect bills to rise by around 27 per cent from January 2027, to over £2,100 for a typical household, so £100 barely registers. Abolishing gas standing charges shifts the cost onto unit rates, and not until the end of 2027, so it offers nothing this winter. Households already rationing heat have little left to cut.
There is also a missed opportunity on tax. The surcharge on banking companies doubles from three to six per cent, but only for 15 months. That is a modest ask of record profits, compared with the windfall tax levied on fossil fuel companies. Meanwhile, around three in ten children live in poverty, yet the Budget contains no child poverty measure and no protected floor in Universal Credit.
Housing shows the same gap. More money for social and affordable homes (around 10,000 more) and £432 million to combat rough sleeping are welcome. But the Budget is silent on Local Housing Allowance, which Crisis calls the ‘missing piece of the puzzle’.
The Resolution Foundation estimates that over a million families face a shortfall of about £158 a month, and Shelter reports a record 177,000 children in temporary accommodation. Temporary measures cannot reverse post-2010 losses of about £2,800 a year for the poorest fifth, set against pensioner gains of about £900. As we have argued, the housing crisis needs political will, not tinkering.
The Resolution Foundation’s analysis of the Budget describes the energy support as badly targeted. Around four in five properties in England qualify for the £100 rebate, and the poorest half of households gain just £14 more on average than the richest half. Renters face a further risk. The Office for Budget Responsibility’s Economic and fiscal outlook warns that a further two percentage point rise in tax on property income from April 2027, on top of last year’s rise, risks “a steady rise in rents”. With Local Housing Allowance still frozen, tenants could face higher rents and a wider shortfall.
Who is missed
The short-term response overlooks longer-term challenges at both ends of working life. JRF’s UK Poverty 2026 report shows 16–24 year olds have the highest poverty rate of any working-age group (24 per cent). JRF data have shown this persistently, reflecting precarious work and unaffordable housing that make the transition to adulthood harder.
At the other end, the Centre for Ageing Better’s NETER measure counts the 21 per cent of people aged 50 to state pension age (about 2.9 million) who are neither working nor retired. That is a larger share than the 13 per cent of 16–24 year olds who are not in education, employment or training (NEET). Those who lose jobs in their 50s receive little help to return to work. Neither group features in the Budget.
The constraint: Capital
Why so cautious? The Budget illustrates the constraints facing a government that says it wants to roll back 40 years of neoliberalism. Welcome adjustments leave the fault lines untouched: unproductive wealth accumulation, a return to historic concentrations of wealth and income, and economic control drifting to unaccountable financial institutions.
Our remedy is to shift from taxing earnings to taxing capital and to rebuild the state’s productive capacity. There is still a need for caution. The run-up to the 2024 election saw Labour move closer to capital and never made the case for a departure, and since the Truss mini-budget the markets have been wary of the state. A radical turn needs groundwork, and public support.
Defence and welfare
One persisting challenge is the framing of defence versus welfare spending: this is a false binary in rhetoric. As we argued in July, reducing poverty is an investment in security, and public money flows too freely into private hands through procurement and PFI. But it is a real trade-off in the Budget’s fiscal arithmetic. The Budget restates NATO targets of 3 per cent of GDP by 2030 and 3.5 per cent by 2035. It is reported that the 2026 cash budget was shielded from direct welfare cuts, with the detailed route to the targets postponed. Even so, the reported £298 billion plan diverts capital from infrastructure, schools and hospitals. Pouring vast sums into a wasteful military-industrial complex while neglecting domestic resilience is a contradiction. It exposes governments’ reluctance to challenge global capital, and genuine security cannot be achieved until it is resolved. This raises a question as to whether those billions could instead fund council house building and a social care service free at the point of use, while also urging a rethink of a rearmament focus that serves the capitalist class rather than public wellbeing.
What next?
We urge the government to use the 10-Year Plan and the 2027 spending review to:
- Raise the floor: introduce a protected minimum in Universal Credit, re-link Local Housing Allowance to local rents, and establish an Affordable Energy Guarantee, as JRF proposes.
- Make support permanent, replacing one-off payments with durable, evidence-led help.
- Apply the socioeconomic duty so inequality impacts are assessed before decisions are made.
- Reach those missed: set out strategies for young adults’ transitions and for re-employment support for people in their 50s.
- Tax capital fairly, including bank profits, to fund homes and services.
- Plan long term, with cross-party commitment to longer time horizons: the School of International Future’s work for a Parliamentary Committee for the Future should be supported and have a key role in scrutiny over future budgets.
Breathing space is welcome. A floor beneath households would be better.
Lee Gregory is Associate Professor in Social Policy at the University of Nottingham.
Natalija Atas is Senior Lecturer in Social Science at Liverpool Hope University.
Sebnem Eroglu-Hawksworth is Associate Professor in Social Policy at the University of Bristol.
Stewart Lansley is a visiting fellow at the School of Policy Studies, University of Bristol.
Jonathan Wistow is Associate Professor at Durham University.
Thomas Bundschuh is Senior Lecturer at Sheffield Hallam University.
Vicky Bromley is Associate at the University of Sussex.
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Image credit: HM Treasury via Flickr