Already in 2013 the Tory-led government’s knives are out, leaving the pockets of hard-working families to suffer. In what the Child Poverty Action Group is calling a “poverty producing bill”, the Welfare Uprating Bill, passed in the House of Commons on 8 January, will see the rise of certain welfare elements capped at 1%.
Traditionally in line with inflation, the rise would have stood at 2.2%. This will mean a real terms cut for many hard-working families. For example, a single income family with children will be on average £534 worse off by 2015.
The language used by the government during the debate on this bill, presenting it as a choice between the “deserving” and “undeserving poor”, is identified by the chief executive of the Rowntree Foundation as “both morally and economically wrong.” Language matters, and the evident politics of class division employed by this government in an attempt to justify its agenda will pollute the minds of society.
The bill introduced by Iain Duncan Smith, Secretary of State for Work and Pensions, is a cut of ideology, especially when the sizes of the benefits affected are considered. To put the welfare budget into perspective, the employment and support allowance costing £3.58 billion (that the Welfare Uprating Bill will affect) makes up but a fraction of the overall spending on welfare of £159 billion.
The bill that will hit working families hard is the latest piece of legislation in the tapestry of the disproportionality of austerity. In his speech during the Commons debate, David Miliband added with insight that the cumulative saving between now and 2015/16 from the richest is £1.1 billion.
Whereas, those least able to bear the burden of a global economic crisis and the current government’s induced double-dip (and forecasted triple dip) recession is figured at £5.6 billion. The former Foreign Secretary further added that while the government’s fixated that those on benefits should not receive more than the average wage, they offer a tax relief worth £4,000 to those with £40,000 to spare; worth £3 billion in total.
Contrary to government and public attitudes of scroungers – “with the blinds drawn” – the recent study by the Rowntree Foundation disproves a culture of worklessness. 24% of those affected by this bill are in work. The reality is that it will affect “millions of ordinary families, whether they are surviving on meagre benefits or relying on tax credits to make work pay,” according to the Child Poverty Action Group. Those affected by this bill do not receive welfare through choice, it is necessary to supplement their wages that do not stretch far enough. It is unsurprising therefore that the Rowntree Foundation warn that “we are at risk of entering a decade of destitution.”
Families of one adult with a taxable income of £60,000 or more will lose all their child benefit, and those with an income of £50-60,000 lose some but not all. The bill will introduce a gross inequality whereby a couple who both earn a wage with a combined taxable income of £100,000 would retain child benefit, but a single adult earner of over £60,000 would not.
An added implication of the bill is to provide an incentive for individuals to reduce their taxable income. Ways in which this may be done would be to work less or contribute more to a private pension. The bill is part of Iain Duncan Smith’s welfare reforms that will introduce an incoherency to the welfare system. Robert Joyce, a senior research economist for the Institute for Fiscal Studies recognizes that the child additions to Universal Credit and child tax benefit will produce two systems of income related support for children; with the relationship to income different in each case.
The chilling reality of this latest cap on benefits will not go unnoticed in Norwich with nearly 20,000 residents set to lose out. When the House came to vote on the bill, Norwich South’s Liberal Democrat MP Simon Wright, like the overwhelming majority of Liberal Democrat MPs, voted in support of the bill.
In voting for it, Mr. Wright is punishing the very people who trusted him to represent them when they elected him in 2010. The bill amongst others acts to disprove Liberal Democrat spin that they are a restraining force against the worst instincts of the Conservatives. Come the election, Simon Wright and his party will be judged on their record, not their excuses.
The passing of the Welfare Uprating Bill will impact millions of people across the country. As more hard working families feel the biting axe of Conservative led austerity, it will mark a turning point in Conservative support. The claim is traditionally laid against the Labour party that it cannot be trusted on welfare, but the callous irresponsibility surrounding the bill presses the question whether the Conservative party can safeguard social security.
Characteristically of the coalition, the blinds are drawn; the lights are on, but nobody’s home.