Your cut out and keep guide to today'sannouncement on freezing working age benefits.
Your cut out and keep guide to today’s announcement on freezing working age benefits
Chancellor George Osborne has in his conference speech announced a two-year freeze on working age benefits to save £3 billion.
The chancellor argued during his speech in Birmingham that Britain could no longer afford to spend £100bn a year on welfare payments for people of working age.
“The fairest way to reduce welfare bills is to make sure that benefits are not rising faster than the wages of taxpayers who are paying for them,” he said.
“We will provide a welfare system that is fair to those who need it, and fair to those who pay for it too.”
So what does this mean? Well here is your cut out and keep guide to today’s announcement.
– Working-age benefits will be frozen for two years from April 2016.
– This comes on the back of a 1 per cent cap that was announced in 2012.
– As the Guardian has noted, the full list of benefits included in the cap are: jobseeker’s allowance, tax credits, universal credit, child benefit, income support, the work-related activity component of employment and support allowance and the local housing allowance rates in housing benefit. Not included are maternity pay, paternity pay, sickness pay, adoption pay, disability benefits and pensioners benefits.
– The £3 billion the government hopes to save by freezing working age benefits for two years will work out at just 0.9 per cent of the £349 billion in expected benefit expenditure, according to the BBC’s Mark Easton.
– Half of those hit by the freeze (in reality a cut) are in work. In other words, George Osborne will make many hardworking people poorer.
– The chancellor has justified the cut by pointing out that since 2007 earnings have rise by 14 per cent while working-age benefits have risen by 22.4 per cent. However this has more to do with the government failure to ensure that wages keep up with inflation, than with rocketing benefit payments.
– And inflation continues to outstrip weekly earnings. As noted earlier today, the headline rate for average weekly earnings was 0.6 per cent in July – the last set of labour market stats we have. Average weekly earnings growth has only twice been lower – very briefly in 1967 and in 2009, when the financial sector bonuses taken at the beginning of the crash were working out of the figures. Slashing away at benefits to match this is a race to the bottom.
– Executive pay is now 180 times that of the average worker. Ask those at the top to pay a little more to plug the gap; don’t go after the poor.
35 Responses to “What you need to know about Osborne’s working age benefit freeze”
Chris Wilson
The tragedy is the absence, outside of Scotland, of a left of centre party willing to oppose and challenge this malign rhetoric.
Roy
well apparently the employers say that Brits cant or wont do the jobs needed for the money they are willing to pay. So just who’s jobs are they taking ?
RoyB
Osborne is clearly an economic illiterate who never learns from his mistakes. To reduce demand in a recession is by far the best way of making things wrose. So not only does he attack the weakest in society, he does so in such a way as to be counter-productive. What needs to happen is for a far larger share of the economy to go to wages. Many companies are sitting on cash piles as well as paying quite obscene amounts to their Directors. This upward and outward flow of money needs to be reversed. Higher pay for ordinary workers means higher tax revenues and reduced welfare payments. That’s the only real way out of recession. As Carney has observed, this model of capitalism will eat itself. It needs to be rescued and replaced with a model that works sustainably for all.
captain antifascist
The jobs the foreign workers take in the UK are often minimum wage or even lower. I know of someone who worked in manual trades – the whole UK work force were sacked and replaced by lower wage workers from Eastern Europe, often they can only afford to work her by sharing a room. who the hell wants to do that indefintely? so stop bashing UK workers who often have families hence a whole flat as well, to keep. You cant do that on a minimum wage with a normal full time hours job. We need decent jobs not Mac Jobs with decent wages and we need more affordable social housing to be built, and we need a decent benefit level for those too sick to work or only well enough to work part-time. Rich tax avoiders
should be made to pay up, a fairer tax system to make the rich pay more.
captain antifascist
austerity is a dangerous idea and deosnt work. the only reason the UK economy isnt in a worse state is because of the housing bubble especially in london with crazy hous prices. one day it will burst and casue massive suffering. UK should stop allowing rich people from abroad to buy up UK property which is helping to cause this bubble. Many of these proerties are lying empty whilst locals are homeless, or living in overcrowded homes or hostels. this is criminal – we are lead by a criminal elite. at the moment its the bully boys from the bullingdon club and their billionaire buddies