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So the 2018 budget was announced today, and after the threat of Tory backbenchers voting down the budget unless changes to Universal Credit were announced, The Chancellor Philip Hammond acted. However, the changes are little more than an a PR stunt to stave off a revolt. Here’s why;
Universal Credit was introduced in 2013 by then Work and Pensions Secretary, Iain Duncan Smith. It was designed to replace six “legacy benefits” such as Jobseekers Allowance (JSA) or Income Support (IS), by rolling them into one supposed easy payment.
Since its introduction it has been hit by cuts, delays and the subject of many reports citing as the main reason for an increase in poverty in the UK.
Work Allowance Increase still doesn’t offset cuts
Philip Hammond opened on the topic of Universal Credit by stating that, it was “here to stay.” This was a jibe to the thousands across the country who’ve called for it to be scrapped altogether.
As usual he used the Tory script of; lowest unemployment since the 70s and millions more in work because of their measures. He then announced changes to the benefit’s “In Work Allowance.”
What’s a Work Allowance?
A work allowance is the amount you can earn before your universal credit payment is reduced. You are eligible for a work allowance if you or your partner are responsible for a child, or are living with a disability or condition that affects your ability to work.
There are types of work allowances that you can get depending on your circumstances:
- If you’re NOT getting housing support, you can earn £2,376/year in your pay packet.
- If you’re getting housing support, you can earn £4,908/year in your pay packet.
Once you earn above the allowance your benefit payment is reduced by 63p for every pound you earn. This has been described by many as making it the highest tax rate in the UK of 63%.
Hammond unveiled that from April 2019, workers on Universal Credit will be able to earn an additional £1000 per year on top of their current allowance. This means those eligible, will be able to keep up to an extra £630 year that they have earned.
However, as I reported earlier this month, families and single parents are due a £2400 a year cut to their benefit payments when they are eventually moved to Universal Credit from legacy benefits like Tax Credits.
So even with the Chancellor’s announcement, still leaves claimants short by up to £1770 per year.
Maybe his other announcements offset that though?
No, they don’t.
He announced a further £1 billion over the next five years which will go towards transitional protection for those moving from old benefits to Universal Credit. He didn’t explain what that involves or for how long this claimants can expect it for.
While £1 billion sounds like a lot, even the architect of the new system, Iain Duncan Smith – IDS, said at least £2 billion was needed to help rescue it. Add in that the biggest cuts announced by former Chancellor George Osborne in 2016 will kick in next year, and Hammond’s announcements look less and less beneficial to claimants.
Hammond had been urged by politicians, think tanks and charities to end the freeze on benefit payments a year early, to help those on the lowest incomes. Since benefit payments were frozen, the poorest in society are over £500 a year worse off. This means although the cost of rent, utilities and food has risen, their income has not.
Work, Work, Work but nothing on those who can’t
As is becoming normal, all the talk was about those who are in or are looking for work. Universal Credit has hit those who can’t work the hardest, but that never gets mentioned by the government.
Instead they just peddle the line of “highest levels” of employment ever.
There are millions of sick and disabled people who are due to come onto Universal Credit within the next five years. Nothing was mentioned about how they will be helped. They already face losing disability premiums, undergoing an intrusive and broken health assessment system and likely going through months of appeals just to get the help they deserve.
It is becoming blatantly obvious that the Conservatives would rather put employment figures above the welfare of literally the most vulnerable people in the country.
It’s worth noting that the unemployment figures include those on zero hours contracts and people working at least one hour per week. Unlike many other nations the UK doesn’t include what’s called the “hidden unemployed”, ie those who can’t work.
That’s because if it did the true unemployment figures would be around 6.25%. Not the soundbite they’re looking for.
Even for his attempt at PR, I give the Chancellor a Z- on his budget. He had the opportunity to show the country that his party have been listening over the past few months. That they really do care about the alarming rise of poverty under their government.
Instead all we got were jibes blaming “the last Labour government”, token gestures to quell a Tory revolt and the unpleasant realisation that they literally don’t care that people are dying because of their policies.
When Labour leader Jeremy Corbyn gave his response to the budget all we saw was smirks and head shaking from the Prime Minister and Theresa May. This when issues such child poverty and women’s equality were being raised.
Philip Hammond didn’t even stay to listen to the SNP leader Ian Blackford, who in my opinion gave a very good response to the budget. He called out the Tories who laughed as he talked of the rise of poverty and the cuts of children’s services.
All today’s budget showed is that unless you’re able to work, you really don’t matter to the Conservatives.
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