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TUC: Welfare reforms 'spectacularly failing' PM's new family test

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TUC: Welfare reforms 'spectacularly failing' PM's new family test

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Published by Max Salsbury for 24dash.com in Central Government and also in Communities, Finance, Universal Credit

TUC: Welfare reforms 'spectacularly failing' PM's new family test TUC: Welfare reforms 'spectacularly failing' PM's new family test

The majority of the Tory-led coalition's welfare reforms will fall on working families, according to a new report by the TUC.

The union body says the cuts to state welfare have already failed Prime Minister David Cameron's new ‘family test’ in "spectacular fashion" with working parents and their children billions of pounds worse off as a result.

Cameron announced this week that, from October, every new domestic policy "will be examined for its impact on the family".

The TUC's analysis - which was undertaken by Howard Reed of Landman Economics – looked at all the welfare changes announced during the current Parliament and found that annual cuts to key benefits will reach £30.5 billion by 2016/17.

The analysis reveals that most of the cuts will fall on working families, with working parents and their children facing the biggest cuts of all, who will lose £11.7bn a year.

With out of work families with children losing a further £2.3bn a year, the total cost of welfare cuts to families with children will be £14.1bn a year by 2016/17.

According to the report, the prime minister’s pre-election pledge to protect pensioner benefits has also "been broken", with pensioner families set to suffer a loss of benefit support worth £6.4bn a year by 2016/17.

The biggest single area of welfare cuts announced has been the £13.8bn worth of annual cuts to tax credits – over 90% of which will hit working families.

Those in work will also bear over 90% of the cuts in child benefit, losing £3.4bn a year by 2016/17.

The report says that many of the reductions in social security support are down to Chancellor George Osborne's "stealth cut to benefits", announced in June 2010, where the measure used to increase benefits every year was changed from RPI to the lower CPI measure.

The move, says the TUC, combined with an "unprecedented drop in earnings growth" is likely to reduce the value of the state pension for pensioner families by £1bn a year by 2016/17.

And the report claims that when universal credit, the government's largest shake-up of the benefits system, is finally rolled out it will lead to a further £5bn of annual cuts – almost half of which will fall on pensioner families.

The TUC warns that universal credit will be particularly harsh on unemployed men and women in their mid-60s, as new UC claimants of this age will no longer get Pension Credit and instead will receive less generous support, as well as being subject to the government’s new sanctions regime.

TUC general secretary Frances O’Grady said: “Ministers like to say that their welfare reforms target workshy scroungers and will get them back to work. But the fact is that the bulk of the cuts hit low-paid families already in work, as well as pensioners who have no way to make up the money lost as a result of the Chancellor’s social security axe.

“With nearly half the total cost of welfare changes falling on working families with children, the Prime Minister has already failed his own new family test, announced just this week.

“The government has been steadily chipping away at the social security safety net we all pay into and expect will support us when we need help.

“While many people may think that the recovery means the end of the squeeze on their social security support, the worse cuts are still to come.

"Under universal credit, out of work men and women in their mid-60s will be deemed workshy scroungers – unable to claim Pension Credit and facing sanctions for not taking up work they’re ill-equipped to do.

“This new nastier social security system is a world away from the support people expect having paid their national insurance contributions.”

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