Tagged: Institute for Fiscal Studies

Tax credit cuts will hit North East hardest and increase child poverty

More than half of North East families will be affected by planned tax credit cuts, making us one of the hardest hit region’s in the country, it has been claimed.

The Government is set to carry out £12bn worth of benefits cuts which it will detail at its next Budget. Tax credits is predicted to be one of the areas where the axe will fall heaviest.

It is reportedly being considered that they will be cut back to the 2003 level, which the Institute for Fiscal Studies has calculated would reduce entitlements for about 3.7m low-income families with children by an average of £1,400 a year, reducing spending by about £5bn.

Labour says that 148,000 North East families – or 56% of the total – benefit from tax credits.

House of Commons figures also show that 70% per cent of those claiming them in the region are in work.

Ian Lavery, Labour MP for Wansbeck said:

“David Cameron and George Osborne must come clean about their proposals to cut tax credits. Their plans clearly put over half of the families with children in the region in the firing line.

“Many families have suffered greatly under the first five years of the Tories, with their incomes falling and bills rising, making life a real struggle already.

“Time after time, during the election campaign and in the first month of this government, they have ducked and weaved to avoid revealing the true nature of their plans. It’s not fair and it’s causing great distress for many. It’s time for the Prime Minister to spell out just what he has in store for families across the region and let the public decide whether his cuts are fair.”

According to campaign groups and charities, the welfare cuts will see the already high level of child poverty in the North East spread even to some affluent areas.

Full story :  http://northstar.boards.net/thread/127/credit-cuts-north-east-hardest

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Child poverty on course for biggest rise in a generation

Child poverty is on course for the biggest rise in a generation, reversing years of progress that began in the late 1990s, leading charities and independent experts claimed on Saturday.

The stark prognosis comes before the release of government figures which experts believe will show a clear increase for first time since the start of the decade.

Key policy decisions in the second half of the last parliament, including the introduction of the bedroom tax and cuts in benefits between 2013 and last year, are blamed for fuelling the rising number of families whose income is below 60% of the UK average – the definition of relative poverty.

Calculations from the Institute for Fiscal Studies (IFS) have suggested that progress between the late 1990s and 2010 has been reversed and that the number of children living in relative poverty rose from 2.3 million in 2013 to 2.6 million in 2014.

The Child Poverty Action Group says that with the government committed to implementing a further £12bn of benefit cuts in a new round of austerity, the problem of children living in poverty looks certain to grow for several more years.

Tens of thousands of people joined an anti-austerity march through central London on Saturday, Alison Garnham, the charity’s chief executive, said ministers were failing too many children in low-income families.

The government can no longer claim that deficit reduction is about protecting children’s futures now that it’s being made to confront a child poverty crisis, with the biggest rise in a generation now expected of its own making,” she said.

“With child poverty expected to rise by nearly a third in the decade to 2020 as a result of its policies, it’s clear the government’s approach is failing.”

Full story :   http://northstar.boards.net/thread/109/child-poverty-course-biggest-generation

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Poverty – And Child Poverty In Particular – Is Rising

Poverty in the UK is increasing after two years of heavy welfare cuts have helped to push hundreds of thousands of people below the breadline, according to an independent study of the coalition government’s record.

Although middle-earners saw incomes rise marginally after 2013, policies including the bedroom tax and below-inflation benefits rises have reduced incomes for the poorest, pitching an estimated 760,000 into poverty since the last official figures were produced, according to the New Policy Institute (NPI) thinktank.

Child poverty showed the biggest increase, with 300,000 youngsters moving into hardship, reversing a fall in the headline figure recorded in the coalition’s first year. NPI estimates 29% of UK children are in poverty after housing costs.

The study challenges Tory claims that child poverty has been reduced by 300,000 on the coalition’s watch. While that figure is officially correct, NPI says, the data on which it is based only applies to the three years between 2009 and 2012.

“The clear conclusion is that poverty in the UK is rising among all age groups,” the NPI’s research director, Tom MacInnes, told the Guardian.

“The trajectory over the second half of the coalition’s term has been a bad one. The next government, whoever wins next week, will be dealing with worsening, deepening poverty.”

NPI undertook the study after the government refused to bring forward the publication of official data which would have shown the impact on poverty figures of the major welfare reforms introduced in 2013, and enabled the coalition’s record to be properly scrutinised before the election.

Official poverty data for 2013-14 will not be published until June, while figures showing the coalition’s record in the final year of the parliament will not be available until June 2016.

Alison Garnham, chief executive of the Child Poverty Action Group charity said:

“This important analysis shows the weakness of the claim being put about by ministers that they have got child poverty down despite making wide-ranging and deep cuts to benefits and tax credits.”

Responding to the report, a Conservative spokesman repeated the claim that there were fewer people in poverty compared to 2010.

“The truth is that the best route out of poverty is work, and there are now a record number of people in work – 2m more since the last election and 700,000 fewer workless households.”

Labour’s shadow welfare minister, Helen Goodman, said:

“This report shows that increasing levels of poverty under this Tory-led government are leaving millions of families struggling to make ends meet.”

Child poverty fell in the first year of the coalition, under the tax and benefits framework inherited from Labour, and remained stable for two years as median incomes fell, the study says. It started to rise again after April 2013 when a series of benefit cuts were introduced, alongside increases in tax allowance.

The median weekly income fell from £425 in 2009-10 to £392 in 2012-13, inching up to £395 by the end of the parliament, says NPI, largely as a result of increased tax allowance and rising employment. But the weekly income of the poorest 10%, which was £174 five years ago, has fallen to £160.

The upward trend in relative poverty over the past two years has affected all groups, the study finds, including working families and pensioners, while the numbers of people identified as being in severe poverty also rose.

The Child Poverty Act requires the government to reduce relative child poverty to below 10%. Latest official figures, which differ from the NPI model in that they measure poverty before housing costs are taken into account, show that 17% of children are below the breadline.

Labour says it will keep the target, though admits it is “very unlikely to be met”.

The Conservatives say they will “work to eliminate child poverty”.

The Institute for Fiscal Studies has estimated that child poverty will rise to 23% by 2020.

A person is defined as in poverty if their household income is below 60% of the median, while “deep poverty” refers to people in households where income was less than 50% of the UK median.

The study, using a model developed by NPI, estimates income and poverty levels for 2013-14 and 2014-15 using 2012-13 data adjusted for changes in population, employment, earnings, benefits and prices.

According to NPI, the government said the decisions on publication dates were not political. But a spokesman for NPI said:

Given the significance of recent policy changes and welfare reform to the poverty landscape, not publishing official statistics before the election is also political”.

Source – The Guardian, 29 Apr 2015

 

Huge Surge In Poorest Families Summoned To Court Over Unpaid Council Tax

There has been a huge surge in the number of low-income families summoned to court over unpaid council tax, new research shows.

New research published by False Economy shows an increase of more than 500,000 court summons in England, as the poorest households are hit by a £490 million cut in council tax support.

And the problem is set to get even worse, as one in seven local authorities plan further cuts in the support available to families struggling to pay council tax bills.

The TUC believes this will result in the poorest families facing even higher council tax demands and lead to a rise in the number summoned to court.

Figures show that more than 3 million people in England were taken to court by local authorities in 2013/14 over unpaid council tax. This represents a 25% rise on the previous year.

Council Tax Benefit was scrapped by the government and replaced by the Council Tax Support Scheme (CTS) in 2013/14. The change meant that councils in England were allowed to develop their own support schemes, but were also forced to accept a 10% in funding from central government for those schemes.

Only a small number of councils chose to keep full council tax support for low-income families. Vulnerable pensioners were unaffected by the changes and are still entitled to have their council tax bills fully paid.

According to figures from the Institute for Fiscal Studies (IFS), around 2.5 million low-income families were affected by a reduction in council tax support in the first year of the scheme.

Where councils introduced minimum council tax payments for the poorest households, court summons increased by 30%. Only 9% of local authorities continue to offer full council tax relief.

The research by False Economy also found that households who qualified for CTS, and who were subject to minimum council tax payment requirements, accounted for 58% of the rise in court summonses.

According to the research, people who are struggling to pay council tax bills are routinely being affected by deductions in benefits and targeted by bailiffs.

A False Economy spokesperson said:

“Council tax support cuts have caused chaos for families and households, and also for councils.

“They are leaving people out of pocket and in debt, which is also bad for local businesses that depend on them as customers.

“Councils are now pursuing people through the courts for money they do not have. It is a shambles made by a cabinet of millionaires in a government that has been completely out of touch with reality.”

TUC General Secretary Frances O’Grady said:

Slashing council tax support has been one of the government’s cruellest cuts.

“It was foolish for ministers to think that families who can’t afford to heat their homes can pay new tax bills for hundreds of pounds.

“And it is heartless for them to stand by as the poorest families are hauled through the courts and harassed by bailiffs.

“If anyone is to be hit with higher taxes it should be the fat cats in the boardrooms and those corporations that are dodging paying their fair share, not the poorest working-age households in the UK.”

Source – Welfare Weekly, 08 Apr 2015

http://www.welfareweekly.com/huge-surge-in-poorest-families-summoned-to-court-over-unpaid-council-tax/

Osborne ducks child benefit claim

George Osborne has refused to categorically rule out rolling child benefit into Universal Credit (UC) to help contribute towards Conservative plans to save £12 billion from the welfare budget.

The Chancellor was asked repeatedly to rule it out and did not, but said that if the Tories had wanted to include child benefit in the new welfare system, they would have done so when it was created.

The independent Institute for Fiscal Studies (IFS) has said that scrapping child benefit and increasing UC for eligible families could save £4.8 billion a year.

But such a measure would mean that 4.3 million families who receive child benefit at the moment but would not be entitled to UC in the future would lose more than £1,000 a year, the IFS said.

At a Westminster briefing, Mr Osborne was asked to rule out rolling child benefit into UC.

The Chancellor replied:

“If you judge us on our approach in this parliament and if we wanted to put child benefit into Universal Credit, we would have done it when we set up Universal Credit.

“We have got a track record, we have got a plan that’s based on clear principles about making work pay and sharpening work incentives…”

Asked again to rule it out, Mr Osborne replied:

“I’ve just given you an answer. If we wanted to do it we would have done it when we created Universal Credit.”

Asked again, Mr Osborne said:

“I’ve given a very clear answer and you have to be a contortionist to think I’m not giving a pretty clear answer to that.”

The Conservatives’ plans for the next parliament involve saving £30 billion to contribute to deficit reduction, with £12 billion set to be cut from the welfare budget.

But the party has faced criticism from the IFS and Labour for failing to set out how it would achieve the majority – around £10 billion – of those welfare cuts.

 Mr Osborne repeated his assertion that the savings could be found and that the coalition’s reforms had shown the most vulnerable will be protected.

The Chancellor said:

“If you look at our track record, the £21 billion we’ve saved in this parliament, you can look at principles we will apply to future such savings.

 “As I say, this is perfectly achievable and anyone who thinks that the job of reforming welfare has somehow been completed, I think, is mistaken.

“We want to go on creating a welfare system which rewards work and the aspirations of families and protect the most vulnerable.”

Universal Credit is the coalition Government’s flagship welfare reform and simplifies the system by rolling a string of benefits and tax credits into one payment.

It is being rolled out in stages after being hit by delays and IT problems but will eventually take in jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit.

Shadow chief secretary to the Treasury Chris Leslie said Mr Osborne had put middle income families in the firing line.

The Labour frontbencher said:

“The Tories won’t admit where their £12 billion of welfare cuts will come from, but after this press conference it’s now clear middle income families are in the firing line.

“George Osborne repeatedly refused to rule out rolling child benefit into universal credit. This would mean 4.3 million families losing over £1,000 a year, according to the independent Institute for Fiscal Studies.”

Treasury Minister Priti Patel said rolling child benefit into UC was not Conservative policy.

She told BBC News:

“We’re very clear as well, we have made it clear and we’ve said that we need to find £12 billion of welfare savings but it’s not our policy, that suggestion, and that there are other ways in which we can find those savings.”

But Ms Patel would not be drawn on whether the Tories will pay child benefit only for the first two or three children.

Asked if it was a possibility, she said:

“I’m not going to come here and start talking the ins and outs of the spending review because that will all be for the next government.”

Liberal Democrat leader Nick Clegg said he was not surprised by Mr Osborne’s failure to rule out the move as he insisted the change would not feature in his own party’s manifesto.

Speaking in Newtown, Mid Wales, he said:

“It’s no surprise to me that the Conservatives are considering pretty dramatic changes like taking child benefit away from lots of families because they have committed to taking £12 billion away from some of the most vulnerable families in this country.

> And we’ve been helping them for the last five years…

“They have committed to taking the equivalent of £1,500 away from eight million of the poorest families in this country to balance the books; they are not asking the very wealthy, those with the broadest shoulders, to make a single contribution through the tax system in balancing the books.

“Even if they did what is now being floated by George Osborne, they would still have £8 billion or £9 billion to fund. Who are they going to affect next, those with disabilities?

“Which other vulnerable groups will be affected by this unfair plan from the Conservatives?”

Asked whether the Lib Dems would rule out the move, Mr Clegg said:

“Child benefit rolled into the Universal Credit will not be in our manifesto because we are not planning the very, very extensive reductions in support given to the most vulnerable in our society that the Conservatives are.”

> But if anyone’s interested we’ll sell our souls again. Cheaply.

Pressed on whether it would be a measure he would block in coalition as a red line issue, Mr Clegg said:

“There’s no way the Liberal Democrats would ever endorse, of course not, in government or in opposition an approach which takes £1,500 away from eight million of the most vulnerable families in Britain.”

 

Source – Northern Echo, o7 Apr 2015

Vote for your life – “dramatic” cuts are coming

Dramatic” and “life-changing” benefits cuts will be imposed if the Tories are running the country after 7 May, Iain Duncan Smith has warned.

They could include taxing DLA, PIP and AA, axeing contribution-based ESA and JSA, cutting the work-related activity component of ESA to 50p, cutting carers allowance numbers by 40%, and making people pay the first 10% of their housing benefit.

For many, these will be life-threatening cuts, rather than life-changing ones.

But claimants are in a position to prevent them happening.

And it won’t take a miracle.

In fact, just an additional 5% turnout by working age claimants could have a dramatic and life-changing effect on IDS and his plans instead.

But a higher turnout won’t happen by itself. Labour are too frightened of the tabloids to try to rally claimants. Many of the major charities and disability organisations have been scared into silence by the Lobbying Act. And the media has little interest in benefits cuts, other than to applaud them as a good thing.

So it looks like it’s up to ordinary claimants to make sure as many other claimants as possible understand the threat they are facing.

In this newsletter we tell you what’s at stake and how you can make a difference.

Dramatic cuts
IDS told Andrew Marr last week he didn’t become a minister to make “cheese-paring” cuts. Instead he has ‘dramatic’ and ‘life-changing’ plans for claimants.

And the tool for those dramatic changes is £12 billion of cuts to benefits in the space of just two years.

So far, we only know where £2 billion of the cuts will come from – a freeze on working age benefits. But the Conservatives are refusing to say where the other savings will be made.

Hit list
A document leaked to the BBC, however, set out some of the cuts the Conservative party are considering, including:

  • Taxing DLA, PIP and AA.
  • Abolishing contribution based ESA and JSA entirely, so that only claimants who pass a means test can claim these benefits.
  • Cutting the number of people getting carer’s allowance by 40%.
  • Limiting child benefit to the first two children.

There are other proposed cuts too, including replacing industrial injuries benefits with an insurance policy for employers, regional benefit caps and changes to council tax.

Not enough cuts
But all of this will still not be enough.

According to the Institute for Fiscal Studies (IFS):

“If all of these were implemented, the total saving would be likely to fall well short of the missing £10 billion per year that the Conservatives intend to find by 2017–18”

So, what else might be in the firing line?

Housing benefit and ESA cuts
We know that pensioners benefits are protected. And JSA costs such a tiny amount compared to other benefits that further cuts there would make little difference.

Cuts to housing benefit are one possibility that the IFS have highlighted, however, as this makes up a large and growing proportion of the benefits bill.

The IFS have estimated that making everyone pay the first 10% of their housing benefit would save £2.5 billion over two years.

Another extremely strong contender is to cut the work-related activity component (WRAC) of ESA to just 50 pence.

We know that the Conservatives are keen to slash the WRAC, because they’ve considered doing it before.

Cutting the WRAC wouldn’t save huge amounts, probably less than £1 billion a year.

But combined with cuts to housing benefit and all the other cuts listed above, it would probably be enough.

What you can do
Is this all nothing more than unnecessarily distressing speculation? After all, we don’t know what cuts will be made until – and unless – the Tories are elected.

But by then it will be too late. As Andrew Marr said in his interview with IDS, if the Conservatives won’t tell us which benefits will be cut, sick and disabled claimants will have to expect the worst:

“What I’m saying to you is if I was on welfare, if I was on disability benefit and I was told that you were taking £12 billion out of the budget, I would really need to know before I voted was I going to be hit. Or if I didn’t know that, I’d have to be assume that I was going to be hit.”

IDS, Osborne and Cameron have all now said no details of the cuts will be given before the election. So there’s no time to lose.

Clearly, the most important thing is to make sure you are registered to vote and then actually vote for a candidate who can keep the Tories out, if that’s possible, in your constituency.

But there’s more.

Above all, alert other claimants and carers to the dramatic threat they face – because many people still have no idea how huge £12 billion in cuts in two years really is.

And then try to persuade them that voting isn’t a waste of time. Because it is no longer true that all the parties are the same.

Here at Benefits and Work we have no trust for either of the major parties. But Labour, unpleasant as they undoubtedly are, don’t drool at the thought of cutting welfare in the way that the Tories do.

And the £7 billion savings Labour say they plan to make are very much smaller than the Conservative cuts. Even if every single pound Labour saved was from cutting benefits, instead of from other measures such as raising taxes from the wealthy, it would still amount to just over half the benefits cuts the Tories have guaranteed.

Not that it has to be Labour that claimants turn to. There are other parties – most notably the SNP – which have a real chance to win seats in some areas of the UK and who don’t support big cuts to benefits.

Read our suggestions on how to fight back, possibly add your own and then make a start. Talk to people, contact your local paper, tweet, comment and write letters.

You can make a difference
And don’t imagine that your voice can’t make a difference.

This is a very close election so far.

There will be many seats where the winner’s majority is in the low hundreds, some where it will be less than a hundred. Even a 5% additional turnout by working age claimants – amounting to perhaps 400 voters in many constituencies – could make the difference between Labour and the Conservatives being the largest party.

If you can convince a handful of people to vote and to talk to other claimants, you could genuinely help to change the course of this election.

Remember, you’re not trying to persuade hard-faced, right wing tabloid readers that cutting benefits is wrong. That undoubtedly would be a waste of time.

You’re talking to people who already know how painful the Coalition benefits cuts have been – because they’ve been hit by them.

You just have to persuade them that it’s not time to despair.

It’s time to fight back.

It’s time to vote for your life.

Source – Benefits & Work,  07 Apr 2015

http://www.benefitsandwork.co.uk/news/3060-vote-for-your-life-dramatic-cuts-are-coming

£19 per week benefits cut for working age claimants under Tories

Working age claimants are likely to face an average cut in income of over £19 a week if the Conservatives form the next government .

The drastic drop, likely to be taken from housing benefit (HB), employment and support allowance (ESA), disability living allowance (DLA) and personal independence payment (PIP), will be needed to allow the Tories to cut £12 billion from benefits spending.

Cuts timetable
The cuts will come in the years 2016-17 and 2017-18, after the current agreed spending round ends.

The chancellor’s plan is to have huge cuts in these two years, followed by much more modest cuts in 2018-19 and then a big surplus to pay for giveaways in the year leading up to the 2020 election.

bar chart showing planned cuts

Target benefits
The Tories are still refusing to say which benefits will be cut until after the election.

But the reality is that pensioner benefits, which make up well over half the benefits bill, are entirely protected.

And the proposed limiting of child benefit to the first three children would save just £300 million.

While cuts to housing benefit for some under 25s could save as little as £50 million.

So, the only place cuts can realistically come from is working age benefits. And Jobseeker’s allowance makes up only a tiny proportion of these, so rising employment will make little difference.

Jobseeker’s allowance is expected to cost just £2.39 billion in 2016-17, compared to:

  • Employment and support allowance: £14.47 billion
  • Disability living allowance: £10.11 billion
  • Housing benefit: £24.8 billion
  • Personal independence payment: 4.78 billion

The benefit that was supposed to transform the system and save billions, universal credit, doesn’t even make up one hundredth of a percent of the benefits bill and the DWP refuse to make predictions about future totals.

£2,000 per claimant
According to the Institute for Fiscal Studies, the cuts the chancellor has outlined so far, primarily a freeze on the uprating of most working age benefits, including the ESA personal allowance but not the two additional components, would save just £2 billion.

So that still leaves around £10 billion in cuts to be absorbed by the 5 million working age claimants in the UK. That’s a terrifying £2,000 per claimant over two years, averaging out at over £19 a week.

We have no way of knowing how the chancellor plans to make these cuts.

But it could be a combination of measures such as abolishing the work-related activity component of ESA; removing the lower rate of DLA care and/or mobility for working age claimants; making the points system for PIP much harsher; reducing the percentage of rent that housing benefit covers . . . and much more.

Tax credits
One possible way out of devastating cuts for sick and disabled claimants would be for the chancellor to pile a large part of the cuts on to tax credits. But there are major problems with this.

Firstly, ‘welfare’ has a precise meaning for a chancellor – particularly one delivering a budget – and tax credits are not part of the welfare budget at all, so Osborne would have clearly been misleading voters and the commons.

More importantly, the Tories have resolutely divided people into ‘strivers’ and ‘skivers’ over the past five years. ‘Skivers’ get ‘welfare’, ‘strivers’ go out to work and get tax credits if they are on a low income. The reality, of course, is very different, but this is the tale politicians and the press tell.

If it turns out that Osborne was pretending he was going to hit the ‘skivers’ with another round of cuts , but in reality planned to slash the incomes of millions of ‘strivers’ instead, his reputation will suffer enormous harm. So too will the idea that work always pays more than benefits.

The Tory party will quite possibly recover from the damage by the time of the next election, but George’s chances of becoming the next leader of the Conservatives in 2018 or 2019 will probably have been irreparably damaged.

It’s very unlikely to be a risk he wants to take.

“Radical changes” will be needed, says IFS
It’s not just Benefits and Work that is arguing that the chancellor will have to make radical cuts to disability benefits and housing benefit.

Paul Johnston of the IFS told the BBC, following the budget:

“He has told us he wants to freeze working age benefits. That will save up to about £2 billion. That’s something he has told us. It’s the other £10 billion we know nothing about.

“It’s of course possible to cut benefits by £10 billion or £12 billion, if that’s what you really want to do.

“But you need to recognise especially if you’re protecting pensioners which the conservatives have said they want to do, this will involve radical changes to, for example, the housing benefit system, big cuts to child benefit, big cuts to disability benefits.

“These are the big benefits. If you want to save £10 billion you have to find radical things to do to those big parts of the benefits system.”

Labour and Tories no different?
Our ‘Benefits sanctions and deaths survey’ found that 59.5% of respondents thought that the Conservatives would be harshest with claimants, but 40% believed Labour and the Conservatives are as bad as each other.

In truth, all the indications so far are that the Conservatives will be vastly worse for claimants.

Labour are only aiming to make a total of £7 billion in cuts over the course of the next parliament, compared with the Conservatives £30billion.

We are no fans of Labour here at Benefits and Work. We despise the way they have privatised chunks of the benefits system and helped to demonise claimants.

But, for the coming five years, we have absolutely no doubt which party will plunge millions of claimants into unbearable poverty and, like Tory minister Hugo Swire, find it all mildly amusing.

Source – Benefits & Work, 25 Mar 2015

http://www.benefitsandwork.co.uk/news/3052-19-per-week-benefits-cut-for-working-age-claimants-under-tories

Benefits cuts in the media

Perhaps not surprisingly, most of the media have paid little attention to the plan in this week’s budget to impose £12 billion of unspecified cuts on the benefits bill. The fact that it could be a matter of life or death to claimants is not something that most of the press are troubled by.

Below is a round-up of some of the more useful coverage, however. Please post a link in the comments section to anything else you have found that might help inform Benefits and Work readers.

The New Statesman is reporting that the planned freeze of working age benefits for two years would save just £3 billion of the £12 billion in cuts. Even if the freeze were to extend to the whole five years of the next parliament it would create only £6.9 billion in cuts.

They also point out that limiting child benefit to three children per family will save only £300 million.

As well as covering the Institute for Fiscal Studies demand for more details on benefits cuts, the Guardian points out that attempts to cut the benefits bill in the last five years have not always been successful. They argue that “A cut in tax credit entitlements has done little more than put a brake on their inexorable rise” and that housing benefit “is likely to rise in line with escalating rents”.

In addition, “pensioners are in line for an inflation-busting rise of 2.5% in the state pension next month” and, with inflation likely to stay low, they are likely to get “another above-inflation rise next year”.

While the cost of jobseeker’s allowance may fall if employment continues to rise “it accounts for only a tiny fraction of welfare spending” allowance.

There’s also an excellent Guardian graphic which shows what a huge hole Osborne’s cuts will blow in working age benefits.

Meanwhile the Independent finds that voters are unlikely to be told what cuts to benefits the tories are planning as “David Gauke, a Treasury minister, told the BBC the Tories would set out the details after the election”.

Source – Benefits & Work, 20 March 2015

http://www.benefitsandwork.co.uk/news/3047-benefits-cuts-in-the-media

“Big cuts to disability benefits” if conservatives win, warns IFS

The Institute for Fiscal Studies (IFS) is warning that cutting the benefits bill by £12 billion will lead to “radical changes” to housing benefits and “big cuts to disability benefits”, amongst others. They have challenged chancellor George Osborne to explain where the cuts will be made.

In an interview for the BBC today, Paul Johnston of the IFS pointed out that:

“The chancellor has been saying for nearly two years now that he wants to find £12 billion of welfare cuts by 2017.

“He’s told us maybe where he’ll find £2 billion of that £12 billion. If he really wants us to take seriously the idea that other spending will be protected, he needs to tell us something about where the additional £10 billion of welfare cuts will come from.

“They will not be easy to find.”

Johnston explained that a freeze on working age benefits, which would itself cause increasing hardship for working age claimants, would go nowhere near saving enough cash.

“He has told us he wants to freeze working age benefits. That will save up to about £2 billion. That’s something he has told us. It’s the other £10 billion we know nothing about.

“It’s of course possible to cut benefits by £10 billion or £12 billion, if that’s what you really want to do.

“But you need to recognise especially if you’re protecting pensioners which the conservatives have said they want to do, this will involve radical changes to, for example, the housing benefit system, big cuts to child benefit, big cuts to disability benefits.

“These are the big benefits. If you want to save £10 billion you have to find radical things to do to those big parts of the benefits system.”

For claimants, especially those who are sick and disabled, the result of the next election could well have a dramatic effect on the quality of their lives for decades to come.

You can see the full interview on the BBC website.

Source – Benefits & Work, 20 Mar 2015

http://www.benefitsandwork.co.uk/news/3046-big-cuts-to-disability-benefits-if-conservatives-win-warns-ifs

Working age benefits to be cut by almost a quarter if Tories win election

Benefits for working age claimants will be cut by almost a quarter if the Conservatives win the general election, according to the independent think-tank the Institute for Fiscal Studies (IFS).

The IFS found that in spite of all the cuts to benefits already implemented by the Coalition, the total benefits bill is virtually unchanged at £220 billion. This is because the slashing of the working age benefits bill by £7 billion has been offset by increased costs for pensioners. The IFS did also find, however, that without the cuts the cost of benefits would have been £16.7 billion (7%) higher.

The IFS has forecast that £21 billion of welfare savings will need to be made in the next parliament in order for the Conservatives to meet their spending targets. As pensions are largely protected, this will mean a massive 23% cut in payments to working age people.

As yet, the Conservatives have given little indication of how cuts of such a huge magnitude will be achived.

You can download the full IFS Election Briefing Note here.

Source –  Benefits & Work, 03 Feb 2015

http://www.benefitsandwork.co.uk/news/3003-working-age-benefits-to-be-cut-by-almost-a-quarter