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.
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.
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.
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
More than one in five young people in the North East have experienced symptoms of mental illness as a direct result of unemployment, a new report warns today.
The Prince’s Trust Macquarie Youth Index paints a bleak picture of young people’s mental health and wellbeing in the region, with the report finding that young people who are long-term unemployed are more than twice as likely as their peers to believe they have nothing to live for.
The report comes at a time when Newcastle has seen a 279% increase in the number of young people claiming benefits for more than six months since the beginning of the recession.
Jonathan Townsend, Northern regional director of The Prince’s Trust, said: “Unemployment is proven to cause devastating, long-lasting mental health problems among young people. Thousands wake up every day believing that life isn’t worth living, after struggling for years in the dole queue.
“Here in Newcastle, 795 young people are facing long-term unemployment and there is a real danger that these young people will become hopeless, as well as jobless.
“Our research highlights that unemployed young people are significantly less likely to ask for help if they are struggling to cope. Our message to them is this: organisations like The Prince’s Trust are supporting young people like you every day, helping them back into work, education or training. You are not alone and you need not struggle alone.”
The Prince’s Trust, which works to help young people looking for work, last year worked with 426 disadvantaged young people across Newcastle. It also has a centre in Benwell, in the city’s West End. The charity’s survey found that nearly a third of young people from the city said they “always” or “often” feel down or depressed with the report showing that long-term unemployed people are significantly more likely to feel this way.
One in four young people locally admitted they feel like a “waste of space” – higher than the national average – with the report finding that the long-term unemployed are more than twice as likely to feel this way.
> I wonder why that is ? Just a wild guess, but you dont think it might have something to do with the relentless “skivers not strivers” propaganda channelled through the media direct from the government ?
Not to mention the treatment handed out by the DWP through its Jobcentres, Work Programme, etc ?
All the stupid hoops you have to jump through, with the possibility of a sanction if you slip up, however trivially ?
It’s enough to unhinge the sanest at the best of times.
The Prince’s Trust is now calling for urgent support from the Government, health agencies and employers to fund its work with long-term unemployed young people battling mental health issues.
Shirley Cramer, chief executive of the Royal Society for Public Health, said: “This research proves that unemployment is a public health issue. It is one that must be tackled urgently and it is essential that youth unemployment is added to the public health agenda.
“Unemployed young people are struggling in many aspects of their lives, from their mental health and wellbeing to their relationships and their qualifications and we must act quickly to end this.”
> Well, maybe they could take a lot of the pressure off by just acting in a humane way, and stop treating the unemployed (of any age) as an enemy that must be crushed at all costs.
Stop sanctions, start admitting that we are an area of high unemployment and probably always will be…and most of all stop the vile media propaganda.
All easy to do and would cost very little. But, conspiracy theories notwithstanding, I’m starting to think that the government actually want things the way they are. They have absolutely no interest in improving life for the poorer sections of society.
And they keep getting away with it, so why does anyone think they’ll stop ?
Source – Newcastle Journal, 02 Jan 2014