Making matters worse

MaeveSherlock.jpgMaeve Sherlock on the flawed logic running through the Welfare Reform and Work Bill

During the General Election campaign, the Conservatives made much of plans to cut £12bn from social security spending while being remarkably evasive about how they would do it. When pushed, they would revert to talking about the benefit cap as if that would save billions when at best it would contribute less than 3% of their target. Today in the Lords, we have the Second Reading of the Welfare Reform and Work Bill which shows just what and where the government plans to cut. 

So, despite a manifesto pledge to protect disability benefits, the Conservatives want to take £30 per week from almost half a million people on Employment Support Allowance in the Work Related Activity Group.  Ministers glibly tell us that working for four hours a week at the new minimum wage is one way of recouping the loss. But these are people that an independent assessor has declared unfit for work, with learning difficulties, a range of mental health issues, or progressive conditions such as Parkinson’s and Multiple Sclerosis. Only 5% get back to work within a year. How is making them poorer meant to act as an incentive? 

The bill also cuts social sector rents by 1% a year. That sounds good but will actually see most affected tenants lose their Housing Benefit pound for pound, and is in fact just a way of taking money off councils and Housing Associations and handing it to the Treasury. It is also something that could have a devastating effect on supply, as well as the viability of specialist and supported housing.

Also being scrapped is the Support for Mortgage Interest (SMI) scheme – something that helps people on benefits stay in their homes. A commitment to ‘maintain all pensioner benefits’ appeared in the Conservative manifesto, but nearly half of all SMI recipients are of pensionable age. Over 70,000 people on pension credit get an average £1,000 a year; and while there will be an option of taking a loan secured against your house, pensioners of course may never be able to pay it off.

Other measures will hit low income families with children, including a requirement on parents receiving Universal Credit to return to work when their youngest child is three years old (currently five) and to start looking for work when their youngest turns one (now 3). We have grave doubts about the availability and affordability of suitable childcare to allow any of this.

Most benefits and tax credits will be frozen for the next four years and will be worth less as time goes by. The family premium is being abolished and in future child tax credit and related benefits will only apply to the first two children in a household, cutting payments by up to £2,780 per child per year. 3.7million households will lose money, with the highest losses from the two child limit affecting 640,000 families by 2021. Ministers say they will make an exception in cases of rape but won’t explain how and to whom a woman would be expected to prove how her pregnancy came about. It is also unclear what effects this will have on adoption and kinship care, stepfamilies, and particular groups.

Even though many of the measures hit the same people – more often than not those hit by previous cuts – ministers consistently refuse to carry out a cumulative impact assessment. They are not only removing the requirement on government to measure child poverty and take steps to reduce it. They are also taking the ‘poverty’ out of the title of the Child Poverty Commission.

The government’s plans will increase poverty, penalise working households, and push more families out of their homes and into temporary accommodation or homelessness, or onto housing benefit. In many cases, cuts to social security are proving counter-productive – undermining work incentives and increasing spending elsewhere. That is not the way to make our Welfare State work how it was meant to. To reduce the benefit bill and tackle poverty, we must create a fairer and more prosperous society with more affordable homes, lower rents and more secure work which always pays. What is being put before the Lords today will make that task harder. 

Baroness Maeve Sherlock is Shadow DWP Minster in the House of Lords. She tweets @MaeveSherlock

Published 17th November 2015

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