Our Last Good Friday: Easter Monday Beginning of the End for UK Poor

As the UK breaks up for Easter weekend most people are quietly ignorant, by circumstance or choice, of the beginning of the end of the welfare state, which begins on Easter Monday.  Today we take a look at what will be happening, how people will be hit, and what we can all do to bring it to a full stop.

The New Poll Tax

As of April, anyone currently claiming Council Tax benefit will see a rise in their annual council tax bill of up to £600 a year.  The stated purpose of the cut is to reduce the current Council Tax Benefit bill by 10% and is in no way based on the reality of the need for financial support of the groups who currently rely on it.

Council Tax Benefit currently supports 5.9 million UK households, 3.2 million contain working people.  It is payable to pensioners, the disabled, people in low paid jobs and people unemployed through circumstance or sickness.  The government has stated that existing support must be retained for pensioners, but is providing no such stipulation for any of the other groups.

The Resolution Foundation published a report on this change claiming it sets an effective tax rate of 81p in the pound for the lowest paid workers in England.

It will be single parents who work part time and require childcare who will be worst hit, who will see increases of up to 333% in their council tax contributions, with annual bills rising between £96 and £577.

A couple with children where one partner works full time for minimum wage will see their annual council tax bills rise between £96 and £304 a year.

The central government has renamed the benefit Council Tax Support, cut the amount available by an arbitrary 10% and passed responsibility for administering it down to local councils.  This is the state equivalent of lighting the fuse of a poverty bomb and dropping it into the lap of local decision makers.

Gavin Kelly, the Resolution Foundation’s chief executive, said: “Millions of England’s poorest households… are already very close to the edge given falling wages and reduced tax credits and benefits. Very few of those currently exempt from paying the full rate of council tax are expecting a large new bill to drop on to their doormat this spring. When it does, they are going to find it hard to cope.”

The Bedroom Tax

Also on Easter Monday, the Coalition’s infamous Bedroom Tax kicks in.  The Bedroom Tax stipulates that anyone claiming housing benefit faces cuts in their payments relative to the ‘under occupancy’ of their home.

Tenants classed as ‘under occupying’ their homes by one room will lose 14% of their Housing Benefit from Monday.  They will receive a 25% cut if they are classed as having two spare rooms.

For these already poor people, losing between £520-1300 a year will mean choosing between eating three meals a day and having the heating on for an hour in the evening.

Inside Housing report that the plan will impact 660,000 low income households, around two thirds of which will contain a person with a disability.

I wrote a piece recently telling the stories of some of those 420,000 disabled people who will be waking up on Monday morning with nowhere to go, and no way to pay.

The government points out that the Housing Benefit bill has doubled in recent years, and therefore ‘something must be done’.

So the three pillars of their argument are fairness, proper allocation of housing to need, and a reduction in the housing benefit bill to the tax payer.

In reality the government is pinning the blame for crisis level shortages of housing, spiralling private rents and the lack of its own social housing policy on the victims of these issues.

The Benefit Caps

The Government is putting in place two benefit caps in April.  One cap relates to the annual rise in benefit payments in line with inflation, the other is a finite limit on the total any family can receive in benefit payments.  Both of these caps break with the principles of the welfare state to provide for what it needed.

The 1% Cap

In the Autumn Statement last year, the government took a step to deliberately make the poorest poorer.  Annual rises in Jobseekers Allowance, Employment and Support Allowance and Income Support will be  capped at 1% rise for the next three years.  As inflation is currently running at 2.7%, this means we are cutting social security payments in real terms for the next three years.

The Institute for Fiscal Studies (IFS) reports that of 2.8 million workless households of working age, 2.5 million will see their entitlements reduced by an average of about £215 per year in 2015 –16. Seven million households with someone in work will see their entitlements reduced by an average of about £165 per year.

The Resolution Foundation also reported that 60% of these cuts will fall on families in work, whilst 40% fall on families where the legal guardians do not work. Resolution Foundation Chief Executive Gavin Kelly said:

“It’s completely wrong to say (the benefit cap) was all about helping so-called strivers. The OBR [Office of Budget Responsibility] confirmed they expect to see another year of falling wages, stretching into the middle of 2014.”

The Total Cap

The government has also chosen to cap the total amount of benefits any household can receive at £500 a week for single parents and couples with children, or £350 a week for single people. This might seem like alot to those outside of London, but the spiralling rents in the capital make this a paltry sum.  A three bed property in Brixton averages £449 a week, while a two bed in Fulham is now £502 per week. This policy will make it almost impossible for the unworking and working average family to live in the nation’s capital.

This cap rolls out on 15^th April in several London boroughs, extending to the rest of the country between 15^th July and the end of September 2013.

The Government will only begin issuing letters to those impacted by this cap in July this year, leaving them little time to assess or prepare for the impact.

The cap will impact 67,000 households in the UK. The DWP’s own figures state that the average household will lose £83 each week – but almost 20,000 households will lose over £100 per week, and 11, 390 households will lose over £150 per week.

Universal Credit

 

Thanks to the incompetence of the project’s IT team, April will see only a limited rollout of Universal Credit.

Universal Credit will roll up Housing Benefit, Income Support, Job Seekers Allowance, Employment and Support Allowance, Child Benefit and Child Tax Credits, Carers Allowance, Maternity Benefits and Widows Benefits into the one payment.

The Universal Credit places unnecessary barriers in the way of people claiming social security.  It means where historically some benefits relating to children were paid directly to women (a saving grace for women in relationships with abusive, alcoholic or drug dependent partners) they will now be paid together, to just one partner.

The system is also only claimable online and payable into a bank account, requiring people not only to have access to a computer and be computer literate, but also have a bank account to be able to make a claim.

This is simply fantasy, which is exactly what service providers on the front line are saying to the Department of Work and Pensions, but sadly this has all fallen on deaf ears.

A joint report by the Children’s Society and Disability Rights UK on the Inquiry into Universal Credit led by Tanni Grey Thompson concluded up to half a million disabled people could lose out on Universal Credit alone.  These include:

• 230,000 severely disabled people who live alone, or with only a young carer – usually lone parents with school age children – will get between £28 and £58 less in benefits every week.
• 100,000 disabled children stand to lose up to £28 a week
• Up to 116,000 disabled people who work will be at risk of losing around £40 a week.

Between the cuts in tax credits and the Universal Credit, the government itself confirmed that 200,000 children will be plunged into poverty as of April 1 2013.

Personal Independence Payment

 

The government is also, on Monday, replacing Disability Living Allowance with the Personal Independence payment and cutting the budget by 20%.

The entire claimant population have been summoned to computer based medical assessments by private IT form Atos on behalf of the DWP in an attempt to ensure that by Monday, half a million fewer people will be entitled to claim the benefit.

A recent House of Commons debate saw MPs detailing the harrowing cases of constituents undergoing the Atos assessment process.  Labour MP Michael Meacher described the death of a young man with epilepsy shortly after he was classified fit for work and saw his benefit cut by £70 a week.

“Is it reasonable to pressurise seriously disabled persons into work so ruthlessly when there are 2.5 million unemployed and when, on average, eight persons chase every vacancy, unless they are provided with the active and extensive support they obviously need to get and hold down work, which is certainly not the case currently?” Meacher asked.

The government’s own figures revealed that 1,300 people have died after being told they should start preparing to go back to work, and another 2,200 had died before their assessment was complete.

Take Your Place on the Right Side of History

 

The government has steadfastly refused to undertake a cumulative impact assessment to check the total impact of all these cuts falling on the same groups at the same time. We do know from Tanni Grey Thompson’s recent report, that disabled people will be £4,600 a year worse off.

Meanwhile, top earners will see a tax cut this year of £107,000 each.

Taking this amount of money from the very poorest of our population with no plans to absorb the impact is disgraceful; doing so whilst enriching the wealthiest is unforgiveable.

Local service providers, charities and councils are bracing for the impact while the government has even cut support to legal aid and support functions which would have supported people through the change.

Polly Toynbee wrote an excellent piece in this morning’s Guardian covering the cuts, saying:

“People should know that historians will record the earthquake of social destruction that happened in their name, while they read of nothing but “scroungers” and the “soaring benefit bill”.

It is time to get on the right side of history.  There will be reasons getting in the way of you attending this weekend’s mass protests against the Bedroom Tax and other cuts.  You might have had a long week, fancy a haircut, or maybe just not feel like it.  Sorry, but this just isn’t good enough.  If you consider yourself opposed to these cuts, it is not enough to bemoan them over a glass of red wine.  You must get involved, people are relying on you. Yes you, reading this right now.  When future generations ask you where you were when this cruelty was exercised, when they ask you what you did to stop it…what are you going to say?

Take Action

A wave of protests will be kicking off across the country this Saturday March 30^th.  Find your nearest protest here.

Sign the WOW Petition to call for a cumulative impact assessment of these mass cuts to the welfare state.