Making poor people poorer: no way to economic growth
The Chancellor’s statement means many poor people and particularly those out of work will be poorer from 2013/14. The creation of additional private sector jobs and a lower unemployment rate than that recorded elsewhere in the Eurozone are of course positive but none of this should mask the fact that disabled people and many others who need working age benefits like Jobseeker’s Allowance (JSA) will experience a real terms cash cut, the key measure on which they’ll judge the Government’s record.
The Chancellor’s plans for Annually Managed Expenditure (AME) are bruising: a below inflation rise or better put, a real terms cut, across many vital benefits for jobseekers, parents and people who need support with housing. The Chancellor talked about people living lives on benefits as though this were a lifestyle choice. We learned from last week’s set of Work Programme statistics that only 1,000 disabled people out of the 79,000 referred to the flagship scheme have secured a job outcome that sees them employed for six months or more.
This 1.3% portion of Employment and Support Allowance (ESA) claimants securing work through the Work Programme is a risible return and reflects, not a desire on these claimants’ part to stay in bed, but huge inefficiency in Work Programme contracts.
The one per cent increase to Jobseeker’s Allowance (JSA) and people in the Work Related Activity Group of ESA plus the same growth rate in the local housing allowance and certain tax credits are all intended to help drive down the deficit but there can be no doubt they will also drive down the disposable income of some of the poorest in our society.
Whilst of course we welcome Disability Living Allowance and Carer’s Allowance being kept exempt from the Chancellor’s decision to freeze or slow down the growth rate of benefits disabled people, like so many of the UK’s population, rely on a range of benefits including ESA, child tax credit and working tax credits.
The decision to up-rate ESA for people in the Work-Related Activity Group (those who are deemed able to prepare for or return to work in the longer-term) by just one per cent translates into an annual loss of over £60 or £180 over three years compared with what these claimants could have expected had ESA been up-rated in line with inflation. This is bad news for disabled people, bad news for people already struggling to make ends meet and makes a mockery of the claim we are all in this together.
A final note: we are concerned the mooted Welfare Uprating Bill will make welfare reform a political football in the next Parliamentary session. We need to recognise the damage and fear already caused by the previous Welfare Reform Act and not see further legislation cause further anxiety to disabled people.