The chance to make a change: the Autumn Statement policies that could make a difference to families  

Published: 20 Nov 2023

As the Autumn Statement approaches, the opportunity for change it presents couldn’t come sooner for the many parents and carers who are struggling day in, day out. The 2023 Working Families Index shone a light on the daily challenges so many are facing, especially those on lower incomes. These families are more likely to be denied flexible working, and are forced to forego promotion, reduce their hours, or leave work altogether to manage looking after loved ones, intensifying their already dire financial situation. On the ground, our experience reflects this, with our free legal advice helpline seeing a significant spike in the number of calls from parents and carers needing advice.   

We believe that the upcoming statement is a real chance for change. We have submitted a briefing to the government that puts forward policies to help parents and carers alleviate financial pressures and navigate the ongoing cost of living crisis. 

Plug the childcare funding gap 

The availability and affordability of childcare is fundamental to the functioning of a working family. It determines whether parents are able to participate and progress in the labour market, as shown by the 2022 Working Families Index where seven in 10 parents said they’d need to consider childcare options before applying for a new job or promotion, a statement especially true for women that entrenches the gender pay gap. But affordable, available childcare can also make the difference between surviving financially or not. The 2023 Working Families Index, which focused on lower earning parents and carers, found 4 in 10 working parents on lower incomes have gone into debt to pay for childcare, meaning that families with no financial wriggle room are effectively paying to go to work. 

With proper support to help fund our childcare system, we can avoid more parents going into debt and help those who are already in debt by making sure work pays. We have asked the Government to create a plan to address the £1.82bn shortfall in childcare funding. This will prevent the loss of further childcare settings and make sure the sector is in a position to deliver on the Government’s new childcare proposals.  

Raise benefits in line with inflation 

The financial situation for working parents is already dire. Our research found that half of two-child couples in the UK are falling below the Joseph Rowntree Foundation’s minimum income standards and, alarmingly, a third of parents and carers are already taking on paid work beyond their contracted hours to bring in additional income. Unsurprisingly it is those on lower incomes that are most likely to be topping up their income, with almost three quarters of parents on lower incomes regularly working beyond their contracted hours, with younger parents and ethnic minorities doing so most.  

Even with these extra hours, for many earnings alone are not sufficient to cover essential costs, evidenced by 40% of Universal Credit claimants being in work. By not raising benefits in line with inflation, families who are already doing everything they can to keep their heads above water, will be pushed into even further financial stress. We implore the Government not to consider cuts to benefits that would sacrifice the wellbeing of these families in order to reduce overall spending, but enable them to provide for their families.  

Bring forward neonatal leave and pay provision 

Our helpline hears first-hand the agonising situation some parents of sick babies go through; without the necessary leave and pay, they face choosing between visiting their baby in hospital or keeping their job and income. Alongside organisations such as Bliss, Stuart McDonald MP, the Government and the Civil Service, we worked to deliver a better deal for parents through the Neonatal Care (Leave and Pay) Act, which will benefit almost 60,000 people every year. But the legislation is not due to come into effect until 2025, meaning up to 120,000 people will have missed out on the chance to receive this vital support. The pandemic proved that the Government can deliver legislation at speed when needed. We urge the Government to support those facing an incredibly challenging with the right to financial support and a legal right to time off work.  

End the motherhood penalty 

Currently, payments of Maternity Allowance (MA) are included when calculating Universal Credit, whereas Statutory Maternity Pay (SMP) is not. As both payments are made to provide women who have just had a baby with financial support, there is no justification for an arbitrary penalty. As the Child Poverty Action Group explain:

“Women who are sick during their pregnancies and whose incomes fall below the lower earnings limit as a result also have to claim MA instead of SMP, as do women on zero hours contracts, or seasonal workers, who have not earned enough during the relevant period. Additionally, self-employed women have no option but to claim MA during their maternity leave, as they are not entitled to SMP. All of these women, if they claim UC alongside MA, will be significantly worse off than if they were instead entitled to SMP.”

It is therefore vital that the Government take immediate action to rectify this by excluding Maternity Allowance payments from Universal Credit calculations.  

Stop penalising parents 

As the cost of living continues to rise, the Government can support new parents by bringing in rates of pay that make it possible to take the full entitlement of Statutory Maternity, Paternity and Shared Parental Leave. The Joseph Rowntree Foundation Minimum Income Standard suggests that a couple with two children require £50,000 per year to live at an acceptable level. This works out at approximately £961 per week for a couple, or approximately £480 if split equally between a couple. At the current rate of £172.48 per week for 33 weeks, this falls hugely short of an acceptable level of earnings for new parents to survive on, meaning many have to return to work.

Our research into the experience of lower income families found that on average, working mothers on a low income are only taking 23 weeks of maternity leave. Given that only 29% of parents in our survey had any enhanced leave and pay entitlements, the Government strengthens the statutory offering with a real term increase in the levels of support if parents are going to be able to afford to spend time with their child in the crucial first year of their lives.