The benefits freeze will not be lifted in Wednesday’s Spring Statement, Amber Rudd has confirmed.
The Work and Pensions Secretary had faced calls from poverty campaigners to scrap the four-year policy, introduced in 2015 by then-Chancellor George Osborne.
But his successor Philip Hammond will not axe the freeze in this week’s Budget update, despite inflation seeing benefits claimants paid less in real terms and leaving many trapped in poverty and on the brink of destitution.
The Joseph Rowntree Foundation (JRF) and Citizens Advice were among the organisations to call for the freeze to be scrapped in the days leading up to the Spring Statement.
Disappointed to hear Amber Rudd at @CommonsWorkPen say that the benefit freeze will continue for at least another year. Many people we help at @CitizensAdvice are struggling to meet essential costs and can't afford the benefit freeze continuing. https://t.co/rpLyWeNszL
— Minesh Patel (@minesh1112) March 11, 2019
JRF had warned that the policy was pushing 200,000 people into poverty with families already losing £340-a-year as a result, potentially rising to £560 if the freeze stays in place to 2020 as planned.
“The purpose of the freeze was two-fold: one was to make the benefits system sustainable because between 1997 and 2010 it had gone up £84bn in real terms. The taxpayer has to pay for it,” said Rudd, while being grilled by the Work and Pensions Committee on Monday.
“Benefits had gone up 21 per cent and mean earnings had risen by seven per cent so it was about trying to redress that balance and incentivise work.
“What the government has done is try to target support in the area where it delivers most and deliver on the government’s aim of getting people into work.
We’ve called on @DWP to take people who aren’t expected to look for work out of the #benefitcap – a policy intended to drive employment. Our report's out today: https://t.co/xd2UUzpzPr
And hear first hand from claimants hit by the cap https://t.co/VlkpVkYQM2 pic.twitter.com/X5syvbdHVd
— Work & Pensions Committee (@CommonsWorkPen) March 12, 2019
“I have private conversations with the Chancellor and I am satisfied that the right amount of money has gone in instead of lifting the freeze, to raise low incomes. The freeze will stay.”
The committee has called for the benefit cap to be scrapped too, warning that 82 per cent of the households affected by the stagnated pay rates cannot escape it.
They also found that DWP claims that the cap is saving money are wide of the mark, suggesting that the claimed savings of £190million a year are just one per cent of the expected savings from welfare reforms since 2010 and 0.1 per cent of the total welfare bill.
What genius in government thought this one up?
Committee chair Frank Field said: “It would be difficult to think of a more cruel cut. Benefits are being cut with the aim of driving people into work, but four in five people bearing this cut aren’t expected to work. What genius in government thought this one up?”
The Work and Pensions Secretary halted the full Universal Credit roll-out, which is scheduled to be completed in December 2023, earlier this year, instead reducing the roll-out to a smaller trial.
— Child Poverty Action (@CPAGUK) March 11, 2019
The 1.6 million people currently on Universal Credit are new claimants or have had a change of circumstance – but managed migration will move claimants from old-style legacy benefits on to the controversial new system.
Rudd confirmed that Harrogate was chosen because Universal Credit had already been in place for three years and had a mix of both rural and urban claimants.
A vote on when the full roll-out should begin is currently scheduled for July, she also confirmed.
“The switch needs to be done carefully which is why we are taking a step-by-step approach to this, starting in Harrogate,” said Rudd.
“I want to be sure that the switch to Universal Credit is a hassle-free process for claimants and everyone receives the personalised service they deserve.”