The work and pensions secretary, Damian Green, has said the government’s benefits cap, which will be lowered from Monday, costing almost 90,000 of Britain’s poorest families more than £2,000 a year, is a “real success”.
Campaigners, including some backbench Conservative MPs concerned about the impact on their constituents, are putting pressure on Green to mitigate the planned reductions.
But in a statement to mark the lowering of the cap to £23,000 a year per household in London and £20,000 elsewhere, Green praised the policy.
“By making sure that those people who are out of work are faced with the same choices as those who are in work, the benefit cap has been a real success,” he said.
“By lowering the cap today, we are ensuring the values of this government continue to chime with those of ordinary working people and delivering on our commitment to make sure work pays more than welfare.”
Last year, George Osborne announced that the cap would be lowered, saying: “It is not fair that people out of work can earn more than people in work.”
Analysis of government figures by the Institute for Fiscal Studies (IFS) shows reducing the maximum amount that can be claimed in benefits from £26,000 across the UK will affect 88,000 households, up from 20,000 currently.
These households will face an average £2,000 cut in their incomes, while those whose benefits are already capped will lose £3,000 if they live in the capital, or £6,000 outside.
Alison Garnham, the chief executive of the Child Poverty Action Group, described the policy as cruel. “As a matter of our basic decency, it’s cruel to deny children what the government knows is the financial support needed for the basic essentials in life, such as food and clothes,” she said.
“The lowering of the benefit cap will tip more families into poverty and plunge already struggling, already poor families into deeper misery.”
The Department for Work and Pensions said it had contacted families that would be affected and believed many claimants would respond by finding work. More than 23,000 of those whose incomes had been cut so far subsequently moved into work, the DWP said.
Green said: “Each statistic represents a person who has moved into employment and can now enjoy the security and dignity that work brings.”
But the IFS said evidence on how the cap had worked to date suggested that “the majority of those affected will not respond by moving into work, moving house or claiming a disability benefit. For that majority, it is an open question how they will adjust to the loss of income.”
The fresh squeeze on some of the poorest families comes as research suggests rising inflation means the “just managing” households Theresa May has said she wants to help face four years of stagnating living standards.
A four-year freeze on working age benefits announced in the July 2015 budget could reduce incomes for the poorest 50% of households by an average of 1% in real terms, given the expected rise in inflation, a report by the Resolution Foundation claims.
The shadow work and pensions secretary, Debbie Abrahams, said: “Despite Theresa May’s warm words on the steps of No 10, when she said she wanted to help families who are ‘just managing’, she is allowing the reduction of the so-called ‘benefit cap’ to go ahead.
“She talks the talk, but when it comes to it, this is the same old Tory ideologically driven agenda that hits the poorest in our society to pay for their failed austerity plan.”
David Finch, a senior economic analyst at the Resolution Foundation, said: “The prime minister has rightly identified ‘just managing’ families as a key priority for her new government.
“The first big test of this rhetoric comes in just a few weeks’ time, when the chancellor sets out the new government’s economic direction of travel in his autumn statement.”
Philip Hammond, who will deliver his first autumn statement on 23 November, is under intense pressure from Conservative MPs, including the former work and pensions secretary Iain Duncan Smith, to moderate the impact of welfare cuts.
In particular, Duncan Smith has urged the government to reverse planned cuts of £3bn to the universal credit system, of which he was the architect. He has said he believes the changes will undermine claimants’ incentives to work by reducing the amount they can earn before their benefits start to be withdrawn.
guardian.co.uk © Guardian News and Media Limited 2010
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