The Chief Executive of Citizens Advice Scotland has said she is disappointed and disheartened following the passing of the second reading of the UK Government’s Welfare Benefits Up-rating Bill today. The bill will impose a three-year cap of 1% on most working-age benefits and tax credits for three years from 2013/14.
CAS Chief Executive Margaret Lynch says:
"I am disappointed that this stage of the bill has been passed which sees an end to the link between benefits rises and inflation. I am also disheartened that the result of this bill is that, as the DWP’s own figures show, the burden will fall hardest on the poorest, many of whom are the working poor.
“This bill will see a real-terms cut in support for the most vulnerable families in our society being introduced. The DWP’s own impact assessment on the bill states that across the UK nearly ten million households - the equivalent of 30% of all households - will lose money but the poorest families will lose the most.
“I don’t think the UK Government has any understanding of how hard life is for those in our society that are living on the lowest incomes. People are turning to their local CAB in higher numbers than ever because they are struggling to be able to afford essentials like food and fuel. They may have thought things couldn’t get any worse – but for many of them they just have.
“Many of those who are currently on benefits are actually in work but on low incomes or underemployed. In-work poverty stands at 6.1 million across the UK and these are the people who need top up benefits, such as tax credits, just to pay their household bills, rent, and childcare. The vast majority of those who are unemployed would love to work, but as the UK Government has said, unemployment is due to remain at its peak of 8% plus during 2013.
“Recent rhetoric may lead people to believe that welfare spending has been increasing for years, but the reality is that spending on welfare as a proportion of GDP was stable over the past ten years until this recession hit. Iain Duncan Smith also admitted during today’s debate that much of the increase in welfare spending since 2010 has been on pensions.
“CAS is very concerned about the impact on those people in society hit by current and impending welfare cuts and changes. These are driving people into spiralling debt and more people than ever before to need help from food banks just to feed themselves and their families.
"Ultimately if welfare changes drive people further into poverty, other problems such as health inequalities, homelessness, and family breakdown can occur because of financial pressures. Tackling those problems further downstream will only add to the overall public spending bill, not reduce it."
Notes to editors - click to expand/collapse
- The Welfare Benefits Up-rating Bill was announced following the Chancellor’s autumn statement in December. It will introduce a three-year cap of 1% for three years from 2013/14 on most working-age benefits and tax credits - jobseeker's allowance, employment and support allowance, income support and elements of housing benefit. The cap would also apply to maternity allowance, sick pay, maternity pay and paternity pay as well as the couple and lone parent elements of the working tax credit and the child element of the child tax credit. Child benefit, housing benefit and universal credit will be capped for two years from 2014/15.
- The UK Government’s Welfare Benefits Up-rating Bill Impact Assessment is available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220198/welfare-benefits-up-rating-bill-ia.pdf
P3 states: ‘It is estimated that around 30 per cent of all households will be affected. The majority of working-age households in receipt of state support will be affected by this policy, with an average change of around - £3 a week compared to CPI up-rating. Households towards the bottom of the income distribution are more likely to be affected and have a slightly higher average change because they are more likely to receive the affected benefits.