December 20 2014 Latest news:
Wednesday, December 5, 2012
Chancellor George Osborne today outlined the government’s plans for welfare spending over the next three years – and we want to know what you think.
Annual rises in most working-age benefits – including Job Seekers Allowance, Employment and Support Allowance and Income Support – are to be capped at 1pc in the coming years, cutting a further £3.7 billion from the welfare bill, said Mr Osborne.
The move means that upratings are likely to be below inflation in future years, gradually reducing the real value of benefits over time and breaking the link which has previously seen them rise in line with prices.
But the Chancellor said he would protect the vulnerable by continuing to increase carer benefits and disability benefits in line with inflation.
What do you think about the changes? Will they unfairly hit those who rely on benefits, or is a rise of any kind better than expected? You can leave your comments below this story.
Mr Osborne’s announcement fell short of the freeze in benefits which some pressure groups feared, but was still greeted with dismay by some anti-poverty campaigners. It comes on top of £18 billion in welfare cuts that had previously been announced.
Delivering his autumn statement to the House of Commons, Mr Osborne said that it was “fair” that welfare recipients should receive similar increases in income to those enjoyed by public sector workers, who are getting a 1pc rise as a lengthy pay freeze comes to an end.
Ministers are understood to have been eyeing an end to the link with prices since it delivered a 5.2pc uprating in April this year due to higher-than-expected inflation the previous autumn.
Mr Osborne told MPs: “We have to acknowledge that over the last five years those on out-of-work benefits have seen their incomes rise twice as fast as those in work. With pay restraint in businesses and government, average earnings have risen by around 10pc since 2007. Out-of-work benefits have gone up by around 20pc.
“That’s not fair to working people who pay the taxes that fund them.”
The new cap means that benefit recipients will get “more cash but less than the rate of inflation”, said Mr Osborne.
It will save £3.7 billion in 2015/16 and deliver “permanent savings each and every year from our country’s welfare bill”, he told MPs.
Anne Longfield, chief executive of families charity 4Children, said: “The measures announced in today’s autumn statement will provide little cheer for those families who are already struggling to cope with the rising cost of living.
“Small changes such as reducing the uprating of benefits can make all the difference to vulnerable families, tipping many into poverty or breakdown – a consequence that will see our welfare system ultimately pay a higher price in the long run.
“It has never been more pressing to start putting families at the heart of the economic recovery. Investing in families now is the only way to get our economy back on track and offer thousands of families a lifeline before their financial difficulties become irreversible crises.”
Links to other autumn statement stories and our live blog are available at the top right of this story.
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