“The political row over welfare cuts has continued as the Tories and Labour traded statistics a week ahead of a Commons vote on plans to impose a real-terms benefits cut.
Work and Pensions Secretary Iain Duncan Smith hailed figures showing that “many working-age benefits” had risen by 20% since 2007, easily outstripping a 12% rise in private sector pay. Increases had cost the taxpayer £6.3 billion since the start of the 2008 recession, he said in a defence of the squeeze announced by Chancellor George Osborne last month.
But the Opposition, which has pledged to oppose the move, produced its own analysis suggesting that Jobseeker’s Allowance (JSA) had risen by less than earnings over the past decade.
Legislation will break the traditional link between benefit rises and inflation. Instead there will be a three-year cap of 1%, well below the expected rise in the cost of living, on most working-age benefits and tax credits for three years from 2013/14. Child benefit, housing benefit and Universal Credit will be capped for two years from 2014/15. The restriction is predicted to save the Government almost £2.4 billion by the 2015 general election and a further £11.8 billion in the three years after it. More here.
The following points should be borne in mind.
- The Benefit rates, for, say, JSA, are not comparable to wages. They are the absolute minimum you are designated necessary to live on. Anybody on benefits knows that the claim that they have been ‘outstripping’ private pay is a piffle. Or put more directly, a lie. When people have to think twice about taking a bus, when they are unable to eat properly, when they have a hard time paying utility bills (and many default), they are not in some kind of privileged position. Many low-paid workers also rely on benefits to top up their wages. They will be hit with these changes as well.
- The Liberal-Tory Coalition has introduced a scheme to make people on benefits pay a part of the Council Tax. Every council is, now, having to find ways of implementing this, setting the rate, and how to find the extra money to collect widows’ mites and paupers’ coins. This could mean claimants having to fork out an extra couple of hundred a year. Councils trying to reduce this impact have been told by Eric Pickles to redesign their schemes to make the poor pay more.
Here is what the far-from left-wing Public Finance journal says of Localised Council Tax Support,
The change to locally run council tax benefit schemes could ‘seriously undermine’ the government’s welfare reforms, MPs have warned.
It is one of several flaws and contradictions in the plan to simplify the benefits system through a single Universal Credit, the Commons work and pensions select committee said today.
‘The decision to localise council tax schemes under a proliferation of local schemes, rather than including it in Universal Credit’, would ‘work against the objective of simplification’, the MPs said. It would introduce local variation, add complexity and otherwise undermine the objectives of the single benefit.
In a detailed and wide-ranging report, the MPs said they were also concerned that the shift to an online claims system and a single monthly payment for the Universal Credit would harm some vulnerable claimants.
Committee chair Anne Begg said: ‘The measures the government plans to put in place to help these claimants may be difficult to access and too slow in identifying who these people are, with the risk that they will fall into debt and hardship before extra support can be provided.’
Ian Duncan Smith is very fond of talking about making the out-of-work look for jobs.
His mate George Osborne talked of the unemployed, “with their curtains closed, sleeping off a life on benefits.”
The true test of being reluctant to work is, as William Beveridge is reported to have said, is to offer someone a waged job.
We note that all these ‘make the workshy get a job’ schemes, from the Work programme onwards, do not in fact offer people paid work.
They make you ‘job search’.
But where’s the jobs?
