Benefit cap hits poorest families

by Daphne Liddle

THE CON-DEM Coalition last Tuesday succeeded in getting a parliamentary majority to cap most welfare benefits to a rise of just one per cent a year, no matter what the level of inflation, which is currently over two per cent.

This is yet another vicious attack on working class living standards that will affect thousands of low-paid workers and their families but the hardest hit will be the unemployed and those on long-term sickness benefits.

For many of these people, beset by mounting debts, rising prices for basic necessities and the disappearance of support services, this cut in the value of their benefits will be the final straw that sends them over the edge into complete destitution.

There was a heated debate in the House of Commons but the Welfare Benefits Up-rating Bill was passed by 324 votes to 268, despite Labour calling it a “strivers’ tax” and attempting to block it.

Liberal Democrat MP Sarah Teacher expressed doubts about another assault on the poorest sections of society but voted for it anyway.

The Bill will limit rises in most working-age benefits to one per cent 2014/15 and 2015/2016 instead of linking them to inflation. Similar measures for 2013/14 will be introduced separately.

This is expected to reduce the welfare expenditure by £5 billion over the next five years.

The Government claims it is necessary because benefits — linked to inflation — have been rising twice as fast as wages in recent years — and that is not fair to wage earners.


That is not an argument for cutting benefits, which are pegged at subsistence levels at a fraction of the average wage but for raising wages at the very least in line with inflation.

The whole working class is taking a battering while the fabulously rich one per cent, which includes the Cabinet MPs and their high-flying banker cronies, escape unscathed.

But the Government, with the aid of the rightwing media, is getting away with this attack on us by dividing the working class and deflecting anger away from themselves on to the victims of the attack with the old lie that benefit claimants are scroungers — even when they are claiming unemployment because the Government has taken their job away.

TUC general secretary Frances O’Grady said: “Ministers think that the benefits up-rating cap will bring them a political dividend that is as effective at delivering votes as it is in reducing the living standards of millions of people on low to middle incomes.

“But as a TUC You- Gov poll shows, support for the measure depends on voter ignorance. Those with the most inaccurate view of the current system are the most likely to support change. Those who know the most are more likely to oppose the cap.


“As people discover the effect of the cap and child benefit freeze at a time when wages are failing to keep up with inflation, voters are bound to want to punish the government....

“Hardly anyone in work today can say that they and every member of their family could not lose their job. That’s why we need a proper unemployment benefit as part of our national insurance system. We all pay in so that we can get very modest support if the worst happens.”

The shopworkers’ union Usdaw, which represents thousands of very low-paid workers, said that the one per cent benefit cap will cost families with two children more than £1,000 in the next three years.

The cap on increases to tax credits and child benefit at a time when inflation is predicted to be between at least two to three per cent will make a massive difference to families on low and middle incomes.

“These are the cruellest of cuts at a time when families are struggling to make ends meet,” said Usdaw general secretary John Hannett. “How can the Coalition justify taking money out of the pockets of families on low incomes who rely on in-work benefits to provide the basic necessities for their children.”

Families on low and middle incomes have already lost out from previous freezes for three years to Child Benefit and Working Tax Credit.

The Treasury has admitted that a lone parent or a couple with one parent working full-time on the minimum wage.