On behalf of the Church of England, the Bishop of Birmingham has responded to today's Budget by calling for 'healing' and warning that the combination of benefits freezes and a rising cost of living is hitting the poorest hardest.

Rt Rev David Urquhart, Convenor of the Bishops in the House of Lords, called for a 'safety net' to be maintained by the Government alongside the work of charities and civil society. He further expressed concerns about reports that one in five charities are struggling to survive in the current economic climate.

And while Urquhart welcomed the Chancellor Philip Hammond's pledge of £2 billion over three years to fund social care funding, he warned that a 'more sustainable footing' is needed.

'As we begin to consider what the UK outside the EU will look like, we need to commit to policies that will promote healing over further division, care for the environment, a bias for social justice and a renewed focus on the most vulnerable,' Urquhart said.

'A bias towards justice must mean that the fruits of any economic upturn are felt first by those who are most struggling. As research from a number of national charities has shown, a combination of benefit freezes and a rising cost of living is putting pressure on living standards and an increase in child poverty for those already on the margins, with more families facing the prospect of having to prioritise debt repayment over family essentials. I welcome the continuing rise in employment levels but remain concerned about levels of in-work poverty.

'Churches, charities and civil society have a key role to play alongside Government in helping to alleviate these problems, but a safety net needs to be well maintained. I am concerned by reports from the Charities Aid Foundation that nearly one in five charities report they are struggling to survive, rising to a quarter for smaller charities. Though not mentioned by the Chancellor in his speech, the doubling of the rate of Insurance Premium Tax over the past 18 months is just one area that Government might re-examine, given the disproportionate impact it has on charities and churches.'

The Bishop added: 'I recognise the dilemma of balancing the need to reduce national debt and the deficit while ensuring there is proper targeted support and investment where it is most needed. Addressing the developing crisis in social care funding has to be central to that, so I am encouraged by the Chancellor's announcement of £2 billion over three years, but as the Chancellor himself said this needs to be placed on a more sustainable footing. I therefore look forward to the Green Paper in the autumn, to which the Church of England will no doubt respond.'

The House of Lords will debate the Budget statement next week and bishops will respond in further detail then.

In his Budget, Hammond announced that the growth forecast had gone up from 1.4 per cent in November to 2 per cent, funding for free schools and – more controversially – tax rises for the self-employed.