It’s been almost five months since the UK voted to leave the EU. As the initial shock of the referendum result dies down, the latest edition of Exchange looks at the impact that Brexit could have on Wales. Our contributors Read more »
The rise in welfare payments, inside and outside of work, will be limited to 1 per cent. Osborne states that this is below inflation but emphasizes that it is in line with average rises in private sector pay. Of course many people who rely on benefits are in fact working.
The Chancellor expects the uprating by 1 per cent, below the rate of inflation, to save £3.6bn over next three years and that it will ensure we have a welfare system we can afford. But the changes come on top of current reforms to social security and will squeeze people still further. And by setting the rate for three years those already squeezed the tightest have a long and tough road ahead of them.
We can welcome an increase in personal tax allowance, an increase of £235, which means people can earn £9,440 before paying tax. But whilst it appears to be putting money back into the pockets of many it is also taking money from many, a little in one hand, a lot taken out of the other. For example, whilst a typical family will benefit from the scrapping of the 3p increase in fuel duty and the increase in tax allowance, they will be out of pocket after the real terms reduction in Child Benefit, Working Tax Credits and any help with housing costs that they receive.
The distinction between the uprating of disability and carers’ benefits, and other benefits, risks creating divide and rule amongst different benefit claimants, between what the ‘deserving’ and ‘undeserving’ poor.
The changes to benefits are cuts by stealth, and mean that people in the‘squashed bottom’ will feel the most pressure; pushing families nearer the edge.
Instead of clamping down harder on tax avoidance and go after the millions, the Chancellor choses to go after the vital pennies of those most vulnerable in our society.