#Budget2015: Where could £12billion of welfare cuts come from?
How could £12 billion of welfare cuts be achieved?
We have previously looked at the sorts of changes that would be needed to raise the revenues the Chancellor has set out. These proposals make clear the enormity of changes being considered. For example (with all changes concerned with the position by 2017/18):
- If Jobseekers Allowance was completely abolished it would save £2.56bn
- If Carer’s Allowance ceased to exist £2.5bn would be saved
- If Maternity Allowance was cancelled it would save £0.47bn
These cuts only take us to £5.5bn. Less than half of the Chancellor’s target.
Richard has considered what has already been announced (which appears to total around £4bn at most). Freezing all working age benefits (including tax credits, support for disabled people, support for carers, payments to help those on lower and middle incomes with childcare and housing) for two years is a very tough policy which would lead to most low earners losing far more than they gain from any of the Chancellor’s tax giveaways. Removing housing benefit from young people (as Centrepoint set out here) would be disastrous for many of the most vulnerable young people in the country. The pain these cuts would lead to would be significant.
TUC analysis has also previously looked at the Chancellor’s record on welfare, finding that most of the cuts made to date have fallen on working families, with working parents and their children facing the biggest cuts of all.
- Three-quarters of all welfare cuts to people of working age have hit working families
- Almost half have hit working families with children.
With the Chancellor’s record apparently the best judge of how the future pain would be felt, it seems a fair assumption that it would be the same group who would be targeted again.
So what further pain could be in store? If Child Benefit was completely abolished, £12bn would be saved. If working tax credit and child tax credit spend was slashed by more than a third the same savings could be reached (which would likely involve removing childcare entitlements and significantly cutting the help available to working families with children). The impacts on household living standards would self-evidently be severe.
Every working family in the country has good grounds to be concerned about the impacts on their living standards should the Chancellor’s plan be put into action. Whether it was through completely removing vital support for those who lose their jobs, removing extra help for those with young children or leaving young homeless people without anywhere to live, the Chancellor’s plans would inevitably hit very hard.