16 January 2013

The Welfare Benefits Uprating bill limits most social security payments to an increase of 1 percent a year for 2014/15-2015/16, an increase expected to be below inflation and thus a real terms cut. Currently they increase in line with CPI inflation. The text of the current bill is here, along with proposed amendments.

A pitiful handful of Libdem MPs, including Andrew George and Dan Rogerson, Cornwall MPs, are suggesting that the uprating should be related to the increase in the general level of earnings. They will not succeeed.

The parliamentary explanatory notes for the bill are here and the House of Commons Library research paper on the bill is here.

Assessments of the impact of the bill
There have been several useful assessment of the impact of the bill on various groups. The excellent library research paper linked above gives inter alia an account of the impact.

The Department for work and pensions (DWP) impact assessment

The Citizens Advice Bureau (CAB) analysis

The Resolution Foundation (RF)

Who gets hit hardest?
“…capping the uprating of benefits will swamp any gains from the change in personal tax allowances for almost all low income households whether in or out of work and many middle income families with children” – Citizens Advice Bureau

“The majority of the cuts made to benefits and tax credits…will come from working households” – Resolution Foundation

The DWP impact assessment shows in table 4, page 8, that 1.4 million people in the bottom decile of income lose an average of £4 a week, 2 percent of their net income. The people in the top decile lose an average of £2 a week, less than 1 percent of their net income.

What disturbs me is the piecemeal approach of the Tory Libdem government to social security reform. Since May 2010 we have seen the chipping away of the real value and scope of benefits that help with the costs of rent, council tax, unemployment, bringing up children, and various disabilities. The Welfare Benefits Uprating bill is the latest. The Tory-Libdems say that the real term cuts are the consequence of the economic disaster that hit us and most of the developed world and, of course, blame Labour. However, there is a clear ideological path through the murk of spin: the government is diminishing the welfare state, advancing the private over the public, reducing help to the needy without fostering a society with robust opportunities for work. The ideological and disjointed and inept Tory Libdem approach has created a Britain of misshapen chaos, of food banks, too few houses and too high rents with no discernible government idea of what to do with effect, tax cuts for the very rich amid claims of national austerity; and in Cornwall in particular too few NHS staff as the latest Care Quality Commission report on the Royal Cornwall Hospitals Trust shows, hopefully now rectified, and squeezing money from those at the bottom as Cornwall Council is thinking/has thought of doing on council tax benefit.

We should have a coherent benefit and tax system that supports the needy and encourages work, that takes a realistic liberal view of what is desirable and what we can afford, and that encourages solidarity among people of vastly differing circumstances. The Tory-Libdems are neither up to that task nor inclined to it. I’m not sure yet about Labour but so far, oh dear, oh dear…

From him that hath not Matthew 25:29