Critics attack proposed benefits limit

11 January 2013

SHUTTERSTOCK

THE Government's plan to limit benefit increases is a "policy decked with false, rhetorical arguments" which perpetuates a myth of "striver" versus "skiver", campaigners are warning.

The Welfare Uprating Bill, which had its second reading in the House of Commons on Tuesday, will limit the increase in most benefits and tax credits to one per cent for the next three years. It was first announced by the Chancellor, George Osborne, last month. He said that the 20-per- cent increase in benefits since 2007 was twice the average increase in earnings: "That's not fair to working people who pay the taxes that fund them".

In a new report, The Double Lockout: How low income families will be locked out of fair living standards, the Child Poverty Action Group (CPAG) questions the narrative of out-of-work families' acting as a "foil" to "hard-working families", arguing that most of the former have worked, and will work again: "millions of 'strivers' become 'skivers' every year and vice versa."

"Increasingly, child poverty is a consequence of problems within the labour market, including low pay, insecure and under-employment," the chief executive of CPAG, Alison Graham, said. "Progress towards full employment, living wages, and affordable child-care and housing is essential if we are to succeed in keeping the cost of benefits and tax credits to an affordable level. The truth is that our social security and tax credits are being left to do far too much of the heavy lifting."

Analysis by the Institute for Fiscal Studies suggests that 2.5 million households without someone in work will lose an average of £215 per year in 2015-16 as a result of the policy, and seven million households with someone in work will lose an average of £165 per year. The Resolution Foundation has calculated that 68 per cent of households affected by the measures are in work.

Polls suggest that the public supports the policy. Research conducted by the Trades Union Congress (TUC), however, found "widespread ignorance" about spending on welfare, and suggested that the voters least able to give accurate answers about benefits were the most likely to back the Government's policy.

"You should not conduct policy, particularly when it hits some of the most vulnerable people in society, on the basis of prejudice and ignorance," the general secretary of the TUC, Frances O'Grady, said.

"If we want to preserve the social bonds that tie us together, the poorest and most marginalised must receive a level of income at which they can preserve their dignity," the Ven. Paul Hackwood, who chairs the trustees of the Church Urban Fund, said on Tuesday. "However, the benefits system must be seen in context, as part of a broader network of support. We regularly see in our own work that initiatives aiming to alleviate the deeper causes of poverty, through providing practical support . . . can often have the deepest and most profound impact for the poorest and most marginalised."

The chief executive of the Children's Society, Matthew Reed, said that the Bill would "make it much harder for millions of children and families across the country to make ends meet".

Rules altered. Changes to the rules in child benefit came into effect on Monday, reducing the entitlement of 1.2 million families. As set out in last year's Budget, the benefit is now gradually withdrawn from families where one parent earns more than £50,000; those earning more than £60,000 are effectively ineligible. The managing director of the Centre for Social Justice, Christian Guy, said on Saturday that the policy was a "fundamentally flawed new mechanism".

Question of the Week: Are welfare benefits too high?

 


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