Plans to freeze benefits for four years ‘will hit 7 million children’

Plans to freeze benefits for four years ‘will hit 7 million children’

The Children’s Society has urged ministers to reconsider plans for a four-year freeze on a range of benefits and agree a moratorium on future welfare cuts for low-income families. The charity made the call after its research suggested that the plans risk pushing more children into poverty.

More than 7 million children living in low-income families will be affected by a four-year freeze to their benefits that risks pushing many more into poverty, according to new research.  The report says families could lose up to 12% from the real value of their benefits over the next four years as a result of government plans to freeze child tax credits, working tax credits and jobseekers’ allowance from April.

The charity is calling on ministers to reconsider the planned freeze and agree to a moratorium on any further cuts in support for low-income families. It says almost two thirds of those who will be adversely affected live in working households who receive benefits to top up low pay.

Matthew Reed, Children’s Society chief executive, said:

“Families on low incomes are facing a barrage of cuts. If ministers are genuinely concerned about child poverty they must reconsider plans to freeze benefits over the next four years.

“At the very least, the government needs to guarantee there will be no further cuts when the chancellor delivers his budget next month.

“Austerity has hit families hard, including those in work. Further cuts to support would push more children into poverty and undermine incentives for families to move into work or earn more.”

The research paper The Future of Family Incomes is well worth reading.

Could you live on £53 a week?

Empty pockets

I’ve been intrigued and concerned by the divisive nature of the debate regarding welfare and benefit cuts – specifically the Housing Benefit and Council Tax Benefit cuts.

There are some clear concepts that those who are making the cuts propose which make sense:

  • As a country our debt is overwhelming and needs to be cut – regardless of how that debt was created and whose fault it is – we don’t want to end up in the same situation as Greece, Cyprus and others with their huge cuts.
  • Many people do want to work but find that they are worse off by doing so due to taxation policies, which leads to more people relying on the welfare state than is necessary.  This situation needs to change.
  • Equally some people have clearly been reaping from the benefits system and are not contributing to society in the way they should.

In contrast there are some very clear arguments against these cuts:

  • There are those who for a variety of reasons are poor and disadvantaged and need to be supported and looked after by the Government and this should cover their living costs – not extravagantly, but equally it should try and find ways to help alleviate their poverty.
  • Whilst some people would be happy to move to a smaller property to avoid the “bedroom tax” there is often a real lack of smaller properties in the areas where they are most needed – this is the fault of planning, local and central government – not the people in these homes.
  • In my current role we’re seeing increasing numbers of people coming to the church to receive financial support or access our food bank.
  • Contrasted to this there is a clear sense in which those earning over £100,000 have seen some tax breaks come into play which doesn’t fit this argument of everyone taking responsibility for the national debt.

Sadly some people have been quick (and therefore wrong) to try and calculate how little people will be left to live on having paid their essential bills.  The mistakes in these calculations has not helped the debate.  In my mind I am clear that each of the figures I have seen quoted are not acceptable for individuals and families to live on.  Kevin pointed out the Hansard recording of a report from Helen Goodman MP, who decided to try living on £18/week during the recent parliamentary recess. I think it makes interesting reading for those of us who are so financially removed from the poorest in our society.

Helen Goodman MP

“I was so shocked when I read what my constituents wrote to me about the implications for them of the bedroom tax, and about how little they would have left to live on, that I decided during the week of the recent recess to see if I could survive on £18 a week, which is what they will be left with to buy their food after 1 April. That figure of £18 is entirely based on the experiences of my constituents, in particular women on employment and support allowance who are about the same age as me, but who had to stop working owing to chronic health conditions, perhaps after 20 years of working life. Out of their £71.70, they have to find £10 for electricity, £20 for heating—gas or coal—£6 for water rates, £4 for bus fares in the case of those who live in villages and have to get to the main town, and £10 for the bedroom tax, which left them with £23 for weekly living expenses.

That £23 has to cover more than food, of course. We did a calculation, and set aside £5 for all the non-food things everyone has to buy—soap, washing powder, washing-up liquid, toothpaste, loo paper—plus a small amount in order to save £50 a year for clothes or a pair of trainers, or in case the iron breaks. That leaves £18.

I therefore took up the challenge of trying to live on £18, and I want to tell Members what it is like. It is extremely unpleasant. I had porridge for breakfast every morning, as I usually do, but I make my porridge with milk; now I was making it with water. I had to eat the same food over and over and over again. Single people are hit particularly hard, because cheap food comes in big packs. I made a stew at the beginning of the week, and I ate the same food four nights a week. I had pasta twice a week. I had baked potatoes. I had eggs on six occasions. It was completely impossible to have meat or fish; that was out of the question. It was also impossible to have five portions of fruit and vegetables a week.

I therefore also have a message for the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry), who is responsible for public health. She was criticising people on low incomes for obesity. Of course people on low incomes are more likely to have that problem; they have to fill up on toast and biscuits.

I found myself waking up in the middle of the night absolutely ravenous, having to make cups of tea and eat biscuits. I had a headache for five days in that week, and I was completely lethargic and exhausted by 4 pm. Some people are on jobseeker’s allowance and are looking for a job. Looking for a job is a job in itself; it takes time and energy. The people whom DWP Ministers want to do workfare are being expected to work 30 hours a week, yet they are not going to have enough to eat properly.

Most shocking of all was the fact that come Sunday I ran out of food—there was literally nothing left to eat that night. If Ministers are happy with the notion that 660,000 of our fellow citizens are literally not going to have enough to eat by the end of the week, all I can say is that I pity them because they have no pity and no conception of what they are going to do to the people in our constituencies who will be faced with this bedroom tax.

The Minister has been very free and easy in talking about all these wonderful alternatives, such as the fact that people can move. In my constituency more than 1,000 people will be affected by the bedroom tax, but there are fewer than 100 smaller properties to which they could move. In my constituency, it is not possible for all these people to increase the number of hours they work, as seven people are chasing every job; people are in part-time work because they cannot get full-time work. Government Members have shown their complete ignorance of the benefits system by saying, “You just have to work a couple of hours a week on the minimum wage.” Of course that is not true, because these people would get then into the tapers and the disregards, and their benefits would be cut or they might find themselves paying tax. The numbers simply do not add up.

Of course some individuals or couples have properties that are larger than they need, but the so-called under-occupancy is in one part of the country and the overcrowding is in another. It simply is not credible to suggest that all the large, over-occupying families in London will move up to Durham, particularly given that the unemployment rate there is more than 9%. What would they be moving to? What would they be moving for?

I made a video diary of my week, so I got a lot of feedback from people affected by this policy. Interestingly, they said, “Yes, this is the reality of our lives. We are not able to survive properly now and things are going to get worse to the tune of £10 a week from 1 April.” In 2006, I did the same experiment under the previous Labour Government, living on benefits to see what life was like for young people on the lowest rate of income support. I found that difficult, but there was enough money to get through the whole week. I wish to point out to the Minister that we have reached a new low, because the £21 that people had in 2006 is equivalent to £28 now, and that should be compared with the £18 with which people are going to be expected to feed themselves.

The Minister has made much, too, of the discretionary housing benefits, which many hon. Members have questioned. In County Durham, £5 million of income will be taken out of people’s pockets and out of the local economy. The size of the discretionary fund is half a million pounds, so once again there is a huge gap between actual need and the resources being given to people to deal with it.

Many hon. Members have pointed out the unfairness of the policy for people who are disabled and need to sleep separately, be they adults or children; people who have children in the Army; foster carers; and separated parents. This policy is a fundamental attack on the poorest people in this country. People are going to lose between £500 and £1,000 over the course of next year, through no fault of their own. But the really disgusting thing is that on the same day that the bedroom tax is being introduced millionaires are being given a tax cut that will be worth £1,000—not over the year as a whole, but every single week.”

This is copied directly from Hansard, beginning at 27th Feb 2013 5.36pm

Yes, there are people who take advantage of our welfare system, but not many, according to the Truth and Lies about Poverty Report recently published by the Joint Public Issues Team, benefit fraud is about 0.9% of payments, about £1.9 million. On the other hand tax avoidance is about 6% of revenues due, about £30 billion. Only 3% of families on benefits receive more than £10,000 in housing benefit a year – many struggle to make ends meet on a daily basis. Only 8% of families claiming benefits have three or more children.

As a concluding thought I believe strongly that we have to see cuts in our budgets, we cannot keep ever increasing our debt, and whilst there are never easy answers I don’t believe these changes to the welfare state are the correct move.