IDS has gone head-to-head with the Church over benefits overhaul
CoE says capping benefit rises will push children into poverty
He reacted with fury after the Most Rev Justin Welby led an uprising against the Government’s plans to limit benefit increases to one per cent a year for the next three years.
Mr Duncan Smith, a devout Roman Catholic, insisted it was neither fair nor moral to trap millions of families on welfare payments which made it not worth their while seeking work.
The intervention of 43 bishops threatens the biggest row between the Government and the Church since the Coalition was formed in 2010.
Mr Duncan Smith is understood to be particularly angered because at a private meeting last week the new Archbishop made no mention of his concern about the benefit cap, let alone the Church’s plan to launch a public assault on it.
The Coalition has announced that increases in out-of-work benefits and some tax credits will be limited to one per cent for the next three years, a move which will save more than £2billion a year.
That prompted uproar last year, when the formula meant their value increased by more than five per cent at a time when many working families had to contend with pay freezes or below-inflation rises.
The Coalition’s Welfare Uprating Bill, passed by a big majority in the Commons, will affect single parents on benefits most. They will lose on average £5 a week.
Working households receiving state support in the form of tax credits will be an average of £3 a week worse off, though the Treasury insists this will be more than cancelled out by record increases in the basic-rate income tax allowance.
Secretary of State for Work and Pensions Iain Duncan Smith says that the benefits bill rose 60 per cent to £200billion under Labour, an unfair burden on taxpayers
The welfare bill will be debated in the Lords next week and bishops in the house have tabled an amendment in an attempt to exempt all child-related benefits and tax credits.
Archbishop Welby, in his first significant political intervention, said the reforms could push 200,000 children into poverty, adding: ‘As a civilised society, we have a duty to support those among us who are vulnerable and in need. When times are hard, that duty should be felt more than ever, not disappear or diminish.
‘It is essential that we have a welfare system that responds to need and recognises the rising costs of food, fuel and housing.
‘The current benefits system does that, by ensuring that the support struggling families receive rises with inflation.
‘These changes will mean it is children and families who will pay the price for high inflation, rather than the Government.’
Under the welfare reforms, increases in out-of-work benefits will be pinned back to one per cent a year for three years
Mr Duncan Smith, hitting back, said the Government’s legislation was ‘about fairness’.
‘People who are paying taxes, working very hard, have hardly seen any increases in their salary and yet, under the last government, the welfare bill rose by some 60 per cent to £200billion,’ the Work and Pensions Secretary said.
‘That means they have to pay for that under their taxes, which is simply not fair. That same system trapped huge numbers, millions, in dependency, dependent on the state, unable, unwilling to work.
'What is either moral or fair about that?
Objection: The Archbishop has led Church protests against the cap, claiming it will push 200,000 children into poverty
‘Getting people back to work is the way to end child poverty. That’s the moral and fair way to do it.’
Labour enshrined in law its measure of poverty – 60 per cent of median earnings – in law, and used tax credits to try to push families just over the line. Incredibly, nine in every ten families with children ended up qualifying for credits.
The last government set a target to reduce the number of children living in relative income poverty to 1.7million by 2010/11. This was not met, with a total of 2.3million that year.
The Coalition has now agreed to tear up Labour’s definition – insisting that basing it purely on a crude measure of family income is perverse, when other factors can be just as critical in determining children’s life chances.
Mr Duncan Smith suggests broader ways of calculating child poverty – including whether or not parents are in work, educational failure, family breakdown, problem debt, gambling and poor health.
He insists that giving a family ‘an extra pound in benefits’ does not address their problems – and can even push a family further into difficulty if a parent spends the cash fuelling his or her dependency on alcohol or drugs.
Justin Welby’s attack on the welfare reforms is the second time in recent years that the Church of England has become embroiled in a political row.
In June 2011 his predecessor as Archbishop, Dr Rowan Williams, took David Cameron to task, questioning the democratic legitimacy of many of the Coalition’s flagship policies.
So what IS the poverty trap?
The Left-leaning Children’s Society charity – which is allied to the Church of England – came up with the figure of 200,000 children who would be pushed into poverty by the welfare cap.However, such predictions are fraught with difficulties.
The arbitrary nature of the current poverty measure – anything below 60 per cent of median earnings – means that the recession actually helped lift 300,000 children out of poverty without any meaningful change in their circumstances.
It happened simply because average incomes fell. While some in government had wanted to freeze all benefits, Mr Duncan Smith agreed to limit increases to one per cent a year while committing to raise certain benefits in line with inflation to protect the most vulnerable.
These include benefits for carers and disability benefits such as attendance allowance, the disability elements of tax credits, disability living allowance and the support component of employment and support allowance.
Even with the welfare cap, Government spending on benefits and tax credits is forecast to increase from £210billion to £218billion by 2015/16.
The new universal credit, meanwhile, will make three million households better off.
It is hard to disagree with Mr Duncan Smith’s central contention that the best way to help children out of poverty is not by giving their parents an extra pound a week to push them over an arbitrary line – but through work.
Daily Mail
