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Budget 2025: how inflation and the two-child benefit cap has increased poverty

about 19 hours ago
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“I’ve sat and cried many times, feeling like I’ve let my kids down,” is the heartbreaking description one Kent mother gives of the difficulty she has meeting her family’s needs.With four children still under 13, the family live in a rented flat in the town of Herne Bay on the county’s north coast.She does not come to the door, but her partner passes a handwritten note relaying their meagre existence on benefits as the Guardian joins the local food bank’s morning delivery round.“I have to be careful with electric and gas, and food has to be £1 frozen food,” she writes.“Snacks are a very rare treat.

If it wasn’t for the Canterbury food bank we would have nothing but pasta.“At Christmas my children will have small stuff and that will mean less money on food, more stress and worry.”The charity is in the frontline of an ongoing cost of living crisis that Rachel Reeves has promised to tackle in her budget next week with measures to slow price rises.In 2019, the food bank, based on an industrial unit in nearby Whitstable, was giving out 450 parcels a month.Now, a typical month involves well over 1,100 parcels, sometimes in excess of 1,400.

The quantity of food going out of the door puts the charity, which covers Canterbury, Whitstable and Herne Bay, in the top 5% of food banks in the country,When these kinds of services were first established in the UK after the 2008-09 financial crisis, most people thought they would outlive their value in two or three years,But on what is the Guardian’s third visit to the food bank in four years this one shows no sign of reaching its use-by date,In February 2022, the charity had gone from spending virtually nothing on food (as donations matched demand) to about £3,000 a month as the Covid crisis segued into a cost of living crisis,When we returned the following year, its monthly food bill was £7,000.

Today it is £10,000.It receives generous support locally, with food donations rising and coming in at between 1,100 and 1,400kg a month.But demand is up 15% year on year, with the charity using cash donations and grant money to cover its bills.Meanwhile, rising food prices means every pound buys less than it used to.This week’s figures from the Office for National Statistics showed UK inflation eased back to 3.

6% in October,However, a deeper dive highlights the pressure on families, as rising prices for bread, cereals, meat and vegetables drove up the annual rate of food and drink price rises to 4,9%, from 4,5% the previous month,“Every pound we spend buys around 10% less food than it did a year and a half ago,” says Stuart Jaenicke, the charity’s head of finance.

The cost of its shopping basket has risen by about 11% in that time, he says, pointing to sharp increases on items such as teabags, hot chocolate and coffee,There has been feverish speculation about Reeves’s tax-raising plans but for the food bank’s small team of staff and 200 volunteers the hope is that the two-child benefit cap will be abolished,An end to the policy – which means parents can claim universal credit or tax credits only for their first two children – would mean “my children would be able to have more of the things they need”, continues the Herne Bay mother,Her partner’s mental illnesses prevent him working and she is also unable to work because the special educational needs of two of the children mean “constant calls to go to school”,The chief executive of Child Poverty Action Group, Alison Garnham, says getting rid of the cap is the “right thing to do”.

A reversal would instantly lift 350,000 children out of poverty and lessen the hardship experienced by another 700,000, she says, adding: “Removing this invidious policy would mean millions more children get the fair start in life they deserve.”It is on the “financial side” that the food bank is feeling the greatest pressure as even its regular donors feel more hard-up.“Even when headline inflation falls, supermarket prices don’t go back down – they stay high,” says Jaenicke.“We’re paying the same as everyone else.“Monetary donations from the public have fallen sharply – down more than £80,000 over the past two years if current trends continue – and grants have become much more competitive and much less predictable,” he adds.

This year the charity has received about 60% of the income it expected but is fortunate in that it could keep going for a year on its financial reserves.“So we’re in a position where demand is up, food prices are up, donations are down, and funding is volatile,” he says.“And behind those numbers are real households: more working families, more single parents, more older people, and more people asking for no-cook items because they can’t afford energy.“This isn’t an emergency spike any more.It’s become the new normal.

”According to the 2025 indices of deprivation Canterbury is an average place, finishing mid-table in the list of 296 local authority districts, according to Peter Taylor-Gooby, research professor of social policy at the University of Kent, who is one of the charity’s trustees.The problems locals face are not uncommon in seaside towns, he says.“It’s got a lot of tourism, a bit of retail and the kinds of jobs you get are insecure and low-paid.”With three universities in nearby Canterbury there is also a large, cheap labour pool that depresses wages, although increasingly students too are turning to the food bank for help.“In the Canterbury area, poverty is becoming deeper and more concentrated, as it is in the country as a whole,” says Taylor-Gooby, who says it is because benefits and wages have not kept pace with rising living costs.

With seemingly no light at the end of the tunnel, the populism of Reform UK has resonated with voters.It took control of Kent county council in May, although a recording of a recent internal meeting published by the Guardian revealed bitter divisions as it strained against the financial realities of the job.“There’s a byelection for the local council in my ward and talking to people you get a sense that ‘nobody has never done anything for us’,” says Taylor-Gooby.On the second floor of the small business unit there is a bank of desks where the staff calmly deal with requests for help from sometimes overwrought callers.The most common issue is the cost of living, says Maria.

“Prices for food, fuel, and rent keep rising, but wages and benefits just aren’t keeping up,Many people have unpredictable hours or zero-hours contracts, so one quiet week at work can mean an empty fridge,”Her colleague Julia chips in that “any buffer or rainy-day fund is long gone”, so unexpected expenses like children’s clothes or a parking fine can leave people in dire straits,At a time when many Britons are contemplating buying Advent calendars filled with everything from marshmallows to gin miniatures, on the wall a poster advertises a “reverse Advent calendar”,The campaign suggests adding an item a day – from baked beans to mince pies and shampoo – to a bag for life, then donating it.

Liam Waghorn, the operations manager, explains that it has to “work harder” for donations as there is more competition.“We have to go and find donations rather than expect them.” Technology helps.One new aid is the BanktheFood app, which sends supporters alerts about products in short supply.On each Guardian visit, the food bank – originally a community project run by local churches – is slicker and more businesslike.

Screens have replaced pens and papers at picking stations, thanks to the IT wizardry of one of the retired volunteers, giving real-time information as parcel requests are logged.Waghorn proudly relays that it has been able to add fresh food, such as bread and eggs, to its parcels to make them more nutritious.It has also sped up the service to next-day delivery.With poverty more widespread, food banks have necessarily become larger and more professional, says Taylor-Gooby.“Once the goal of food banks was to work themselves out of a job.

Now they have become a necessary part of the welfare state,”
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