The Chancellor has called on all progressives to support his welfare reforms, but I can see nothing progressive in plans which will discourage families from taking up more work or from getting married and will cause significant hardship for poorer children.
Tucked away in the budget are cuts to how much a family can earn before their benefit entitlement starts to reduce and an increase in how much their benefits are cut for every pound they earn– known as income thresholds within the tax credit system and work allowances in Universal Credit. These will increase the benefit trap as parents will be less inclined to work if they know they will be able to keep less of their pay.
Currently if you earn over £6420 per year the Government will reduce your tax credits by 41p for every extra £1 you earn. The budget is now going to change that so that if you earn over £3850 they will reduce your tax credit by 48p in every extra £1 you earn. Analysis from the Children’s Society has shown that a family will be £1233 worse off every year because of this.
Another un-family friendly change is to stop paying benefits for the third child in a family. No child can choose how many siblings they have but will suffer greatly if they have more than one brother or sister. The Children’s Society have worked out that a family with 3 children will lose £3325 (£64 per week). As it is worked out by the household this would discourage two single parents from getting married and could even make it more likely that a couple breaks up so they can afford to raise their children separately.
While it is these working families who will lose out most from these budget changes they are going to be swept under the carpet no longer showing up in the Government’s new child poverty targets. In my constituency the Children’s Society have estimated that are over 5,500 children in poverty has at least one parent who works, and in London as a whole 74% of children in poverty are in working families. The new measures on child poverty only report on the number of children in families out of work, while tackling wordlessness is vital to helping many children the Government needs to set out how they are going to measure how children in working families are being helped.
I also want to raise some concerns I have regarding the benefit cap, around a 1000 households in Lewisham will be impacted by this, what safeguards are in place to ensure that councils like Lewisham don’t have to deal with rent arrears and increased homelessness.
With 54% of capped households in the private rented sector, if tenants fail to meet this liability it is likely that the council will see an increase in evictions and demand for accommodation from the council when they already have 29% of capped households in temporary accommodation.
I am also deeply concerned about the removal of housing benefit for 18-21 year olds. When we talk about having safeguards for the most vulnerable, what is actually meant by this? Organisations in my constituency like the Marsha phoenix memorial trust who support young vulnerable women into training and work, rely heavily on housing benefit. What will the government be putting in place to ensure organisations that support young homeless people can continue the great work they do in protecting some of the most vulnerable people in our society?
I’m going to finish with a plea, a plea for the discretionary housing payment fund to be significantly increased. This needs to be properly funded to ensure that councils have the ability to deal with the fallout from these welfare reforms to protect the most vulnerable and ensure we don’t have a crisis where many families are living on the streets.