Welfare cuts to hit thousands of Medway residents
The Conservative government have announced a range of cuts to working age benefits that will affect local residents.
Recent analysis has estimated that in Medway:
- The four year freeze on working age benefits means 12,000 Medway residents and their families will lose an average of £260 per year.
- This includes 4,200 working people whose families will have to make up an average £280 shortfall per year in tax credits.
- 2,200 residents in the ESA work related activity group, considered only temporarily too ill to work, will lose a further £30 per week as their allowance is brought down to the level of JSA.
Other measures include:
- the household benefit cap will be reduced to £20,000 (£23,000 in London)
- support through Child Tax Credit will be limited to 2 children for children born from April 2017
- automatic entitlement to housing benefit will be ended for 18-21 year olds
- limiting child tax credits to 2 children
- reducing the amount of tax credits anyone with an income of more than £3,300 can receive
Question to Council
Local Lib Dem, John Castle put the facts above to Medway Council and asked the question, "Has Medway Council estimated the additional costs these welfare changes will impose on the Council?"
The response from the Portfolio Holder for Business Management, Councillor Turpin follows.
This Government has made it clear that its aim was to change Britain from a low wage, high tax economy to a higher wage, lower tax and lower welfare economy. It would be an economy where work pays and a lifetime on welfare was not a lifestyle choice.
He referred to George Osborne's latest budget which aimed to secure an extra 1 million jobs in this Parliament and to reduce the debt to GDP ratio down to 68.5% in 5 years. The national minimum wage would be increased from £6.50 to E7.20 per hour next April and would reach at least £9 per hour by 2020. At the same time, the personal allowance which was £6,475 in 2010 would reach £11,000 per year earlier than planned next year saving £905 per person per year in tax. Tax credits were expected to fall from £30billion per year in 2010, which is almost a third of the cost of the NHS, to under £25billion as the Conservative Government took steps to get the welfare bill under control. Big companies like Tesco would no longer be as subsidised by the taxpayer for the low wages they pay their workers which amounted to £360million for Tesco alone last year.
He stated that with so many changes going on contemporaneously it was impossible to make an accurate prediction about how each person or each family would be affected, but it was a good time to be in work because you will take more of your pay home and your wage will be higher if you are on a minimum wage. He advised that the Conservative Party was the party for the working man and woman and reiterated that the country's welfare system was very precious but must be directed and targeted to those who need the most help through no fault of their own.
Councillor Turpin stated that the disability benefits would not be taxed or means tested and the triple lock on pensions would remain. Additional means testing of tax credits would ascertain who was most in need of assistance and social housing would be offered at market rates for those earning more than £30,000 outside of London or more than £40,000 in London. Whilst most working age benefits were frozen for four years, this would not apply to maternity pay and disability benefits and rents for social housing would reduce by 1% per year. In the meantime, inflation would mitigate the freeze as long as it stayed near to zero.
He confirmed that the Council was aware of the areas of risk with some of the changes. However, the Council did not hold all the requisite information necessary to judge how individuals and families would be affected as many people were on passported benefits and, as such, the Council was instructed to make payments of housing benefit reduction without knowing the full details of household income and expenditure. The Council was also unable to quantify how many current claimants would find jobs or increased hours and increasing their take home pay. However the Government had announced a national £800million discretionary housing benefit over the five years to assist those in need.
As a supplementary question, John Castle asked. "The changes have the potential to impact on homelessness, physical health and mental health. Does the Council agree that the changes hit hardest those who are already struggling to make ends meets?"
Councillor Turpin replied. "As stated previously, the Government had a raft of measures including an extra £8billion going in the NHS. He therefore considered this would help to improve the Health Service for physical and mental Health."
Liberal Democrat Response
The Local Lib Dem response to the received responses, provided by John Castle is as follows:
"These measures will mean big reductions for the poorest Medway residents, particularly those who are too ill to work and those in work but unable to make ends meet.
It will be the local council that will have to pick up the pieces when people have nowhere left to turn.
As our party realised in the last government, it is not possible to address the deficit without looking at the welfare bill. However the Lib Dems ensured that any changes were as fair as possible, blocking many of the harshest suggestions put forward by the Tories.
We're now seeing the Tories jump at the chance to implement all those measures that the Lib Dems stopped them from doing, forcing those already struggling to make ends meet to shoulder a £12bn saving."
Glossary
ESA: Employment and Support Allowance
JSA: Job Seekers Allowance