Hammond faces call to deliver ‘rescue package’ for low-income families

By Gavin Cordon25th February 2019News EnglandGovernment / Politics, News England, Poverty / Austerity, Welfare / Benefits, Welfare Reform

Chancellor Philip Hammond is being urged to use next month’s Spring Statement to deliver a “rescue package” for millions of low-income families left worse off by successive waves of benefit caps and freezes.

The Commons Work and Pensions Committee chairman, Frank Field, said the squeeze on benefits since 2010 had had a “devastating” effect on some of the poorest households in the country, with some losing hundreds of pounds a year in real terms.

He said research commissioned from the independent House of Commons Library showed six successive caps or freezes had wiped out the gains associated with the introduction of the national living wage and increases in personal allowances.

It found that a lone parent in work or a single-earner couple with two children would be £132 worse off in real terms next year compared with 2010, while those with one child would be £36 worse off.

Families who are out of work face even deeper real terms cuts to their income, ranging from £491 to £723.

In contrast, in a letter to the Chancellor, Mr Field said that if benefits and tax credits had been “inflation-proofed”, lone parents and single earner couples with two children would be £1,401 better off in real terms than they were in 2010. Those with one child would be £1,151 better off.

However, he said that while inflation next year was forecast to be around 20% higher than in 2010, child benefit and the basic 30-hour elements of working tax credit would be only 2% higher.

Mr Field, who quit the Labour Party last year and now sits as an independent, said he had felt compelled to speak out after the “horror” of witnessing people in his Birkenhead constituency being left to rely on feeding projects.

“In the light of these trends, it is not difficult to see why so many families, reliant on low-waged jobs, now seek help from their local food bank,” he said.

“There is an overwhelming precariousness that has engulfed families in low-waged work, all too many of whom are vulnerable to hunger because their incomes will not stretch to the end of the month.

“I very much hope that, having considered these new data, the Chancellor will begin setting out, in the Spring Statement, a rescue package for the living standards of families with children whose incomes have been wrecked by successive waves of caps and freezes.”

A Government spokesman said: “Our priority is to support people to improve their lives. Last week’s figures show the unemployment rate is the joint lowest since 1975 and wages are growing at the fastest rate in over a decade, outpacing inflation for nearly a year.

“We know that some people need more support. That’s why we’re spending £90 billion to support families who need it, and by 2022 we will be spending £28 billion more on welfare than we do now.”