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Family Law Blog

Comment on divorce & family law 

Will families bear Budget brunt?

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I always watch the Budget with interest. The pantomime that goes with it is often as entertaining as any comedy programme you’ll see on television. There are villains, cheers, boos and backstabbing. It is particularly entertaining coming soon after a general election where there has been a change of the guard. The former Government is always quick to stick the knife in about the state of the economy – an economy which we all know cannot be changed quickly and of which they were, inevitably, the architects.

After the lengthy speech and fiery (if a little pre-rehearsed) response from the Opposition, I look at the details of the changes and try to figure out whether I will be better or worse off. And years of doing this has taught me one inevitable truth: it’s all swings and roundabouts. You win some, you lose some. You gain a bit here but lose a bit there. Generally speaking.

I also, inevitably, look at the analysis to see how families will be hit to try and gauge the affect on your average family and any knock-on effects. I don’t mean in the context of whether a family law firm will see spikes in business in the near future as families in crisis are pushed over the brink by the Chancellor. No, more a case of being up on what is happening so that I can give an informed opinion if asked. Working in family law is not just about us giving sound, plain English legal advice.

So I read with interest a piece in the Observer this Sunday from think tank Resolution Foundation which suggests families with children will ultimately be the ones hit hardest by George Osborne’s measures announced last week (As an aside, I have always wanted to be a member of a think tank? How do you get to be in one?!)

The analysis looks at the effects on low and middle earners of measures in Mr Osborne’s budget, as well as the latest official predictions from the Office for Budget Responsibility on how wage rises will lag behind increases in the cost of living. And it suggests typical families with children will see their incomes fall by between 4% and 7% in real terms over the next year.

There are several factors contributing to this situation, they assure us. Inflation will outstrip earnings growth, changes to tax credit and, in particular child benefit, will hit many families hard, particular those with a single wage earner, for instance. So the “squeezed middle” will be squeezed more. I have no reason to doubt the analysis, despite the fact the chief executive is a former adviser to Gordon Brown.

Both Nick Clegg and David Cameron said positive things about helping married couples, and families more generally, before the general election. I would not say that either has specifically reneged on promises yet – but neither have either done anything significantly tangible to help strengthen family units either. It is no surprise that finances are among the biggest causes of tension in households. That’s why predictions like this one fill me with dread. More, and prolonged, financial hardship could be the nail in the coffin for some relationships. We need to be doing more to help those families in crisis while urging politicians to finally bring some good news to those caught in the middle of the economic crisis. All suggestions please to 10, Downing Street, London.

Andrew Woolley
Family solicitor

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