The 2016 Autumn Statement – food insecure households still stuck in a jam

Chancellor Philip Hammond’s 2016 Autumn Statement, revealed November 23rd, was supposedly all about JAM – those households throughout the UK that are Just About Managing to avoid poverty.

With 8.4 million of us living in food insecure households – with limited or uncertain access to nutritionally adequate and safe foods due to resource constraints – we suggest many JAM households are actually NAMs (Not Adequately Managing): exposed to the anxiety and social isolation associated with mild food insecurity, and/or the increased risk of long term ill-health associated with moderate to severe food insecurity.  Improving the nation’s food and nutrition security would reduce this risk within households, and reduce the economic costs of the resultant days lost without pay, low school achievement, and child welfare costs. With no extra money made available to the NHS in yesterday’s statements, and forecasts for downgraded economic growth, these reductions are imperative.

A number of measures in the 2016 Autumn Statement are intended to shore up the financial positions of both in-work and out-of-work JAMs and NAMs:  a rising of the personal tax threshold to £11500, with a commitment of further increasing this to £12500 in the lifetime of this parliament; a reduction of the tapering rate of Universal Credit, slowing the rate at which in-work welfare recipients lose access to payments; a slight relaxation of the welfare cap; and a 2017 increase in the official National Living Wage (NLW) from £7.20 to £7.50 an hour.

Unfortunately, a closer examination of the Statement, and its accompanying economic forecasts, suggests these measures will provide little help to those of stuck in an economic jam. While household income and is an imperfect proxy indicator of household food insecurity they are associated, yet the planned increase in the NLW fails to meet the rise to £7.60 that the independent Office for Budget Responsibility (OBR) estimates is needed now for the government to meet its target of a £9.00/hour NLW by 2020. More tellingly, the new NLW (to be introduced in 2017) is still £0.85/hour less than the UK Living Wage as calculated by the Living Wage Foundation.  This Living Wage accounts for the minimum income required by households to secure an acceptable standard of living – including a healthy diet.  Put simply, NLW households will still earn considerably less that that is required to safeguard their nutritional security.

This means many households will still rely on the national welfare system to safeguard their nutritional security. However, the impact of the slight relaxation in the government’s welfare and tax regime is likely to pale in comparison to the impact of the £11bn of cuts announced last year: the previously announced four year benefits freeze, and reductions in Universal Credit’s family support, are still ongoing. Furthermore the sanctioning system, and its demonstrable link to pushing food insecure households into nutritional crises, remains in place.

Looking at today’s economic forecasts, it is clear that it is not just the no- and ultra-low waged who are due to experience a period of prolonged economic strain which will likely impact on food and nutrition security.  After a prolonged period of low inflation, the OBR forecasts that CPI will spike in 2017/2018, rising to and remaining above 2% up to 2021. Increases in the real earnings of households across the country are therefore expected to fall to close to zero next year, with wage increases off-set by increases in the cost of living.

When household budgets are put under resource strain, decision makers are prone to stock up on calorie dense but nutrient poor products.  We already have double the rates of obesity among children living in the most deprived areas compared to those in the least. Products high in fat, salt and sugar already three times cheaper – calorie for calorie – than healthier products, and we know that when food prices rose in 2008 people on low incomes cut back on fresh fruit and vegetables.

Furthermore, while there are indications of food price rises in a range of products, certain food categories could well be more adversely affected than others: with the OBR expecting a period of Brexit-induced uncertainly and sterling depreciation (following a 14.2% trade weighted depreciation between June and October), prices of products for which we are heavily import reliant – such as fresh fruits – could rise in price faster than other food stuffs, further pushing JAMs and NAMs towards unhealthy diets.

Also tucked away in the Statement was a commitment to introduce draft legislation for the Soft Drinks Industry Levy on 5/12/2016.  Following the now well-known watering down of the Childhood Obesity Plan, and its eventual release during the summer recess period, the government can expect a high degree of scrutiny – both internal and external to Parliament – as it furthers these plans.