Executive Leader Cllr Kieran Quinn

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Councillor Kieran Quinn

How Not to Make Work Pay (Part 2)

Tuesday, 12 September 2017

Whatever your views on the subject, it looks like Brexit is going to be the first, last and only topic of discussion now that Westminster has returned from the summer holidays and the EU Withdrawal Bill has begun to make its way through Parliament. Beyond that, we’ve also got the first autumn budget in over two decades scheduled for around the end of November or beginning of December. Since everybody will have a view on the former, it’s the latter that I want to talk about today.

And for good reason too. Obscured amidst the din over the weekend was the release of, “The Cumulative Impact of Welfare Reform: A National Picture”, a new report on cost of living by the Local Government Association. Even by the standards of the age of austerity, it makes for grim reading. It concludes that by 2020 more than 2.14 million of the poorest families in the country will be £50 a week (£2,600 a year) worse off. 84% of these are households with children, and almost two thirds are working households.  

Their story is a familiar one, a crisis in living standards brought about by a toxic combination of falling incomes and rising costs. It should come as no surprise that increased housing costs, particularly in the private-rented sector, are a significant driver. More than 2 million low-paid private renters face an average loss of £38.49 a week by 2020, although the exact figure will vary significantly depending on how many people are in the household and where they are in the country.

At the same time, the £12 billion worth of benefits cuts announced by the previous government are beginning to bite. Those currently on working tax credits are facing a significant income drop, ranging from £300 to £4000 a year depending on circumstances, as they are moved to Universal Credit. Even after taking into account increases in the so-called National Living Wage and the Personal Tax Allowance, many of those families will remain worse off than they were before. Funding for those in financial crisis has also been cut back significantly.  To give just one example among many, the DWP has a £185 million budget for discretionary housing payments in 2017-18 to meet a combined annual income loss of £4 billion.

It’s time to face facts. Far from “Making work pay”, all seven years of cuts upon cuts have achieved is the worsening of the lot of millions of hard -working families. Hard-working families that the government, once upon a time, claimed to care so much about.

In a couple of months, the Chancellor will have the chance to own up to these mistakes and start making amends. He could start by following some of the recommendations laid out in the report. In the short term: restoring the link between housing benefit and private rents, boosting Universal Credit to help eliminate working poverty, and ensuring that funding is available to provide adequate and appropriate support at a local level for those who need it. In the longer term, we also need to start taking a look at deeper issues such as our broken housing market and our economy’s miserable level of productivity.

Not only does all of this need to happen, it needs to happen before millions across the country lose even more than they already have. Let’s make sure that we keep holding the government to account for their failure to make a country that works for everybody.

Posted by: Kieran Quinn

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