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Social Justice

The end of the benefits freeze is not an “income boost”

Yesterday’s announcement that the much-maligned policy would end has been welcomed – but it was due to end in 2020 anyway and the rise in payments is “not enough” to life Britain’s most vulnerable out of poverty

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The benefits freeze will end next April – but the message from campaigners who have called for it to be axed for years is clear: It is not enough.

The hated policy was introduced by then-Chancellor George Osborne in April 2016 and has meant that benefit payments have lagged behind inflation ever since, reducing their value every single year. That has led to the benefits freeze being consistently identified as a key driver of soaring child poverty rates.

Yesterday the DWP confirmed that working age benefits like Universal Credit and Jobseeker’s Allowance would rise by 1.7 per cent while state pensions would rise by 3.9 per cent. The announcement was termed has an “income boost” although claimants will, in real terms, be receiving the same amount of payments rather than seeing a boost.

The Resolution Foundation’s analysis found that working age benefits are down six per cent since 2015. An average couple with kids who are at the bottom end of the income distribution scale up to £580 a year worse off.

“We’re clear the best way for people to improve their lives is through work, but we know some people require additional support,” said Work and Pensions Secretary Therese Coffey.

“Our balanced fiscal approach has built a strong economy, with 3.6 million more people in work since 2010. And it’s that strong economy which allows us to bolster the welfare safety net by increasing benefit payments for working-age claimants now.”

However, the benefits freeze was always due to end in 2020 anyway and it was not lost on Coffey’s Labour counterpart Margaret Greenwood that the announcement was made ahead just as politicians started out on the campaign trail ahead of the December General Election.

“Nobody will be fooled by this cynically timed announcement, which even now will leave the benefits freeze in place until next April,” said the Shadow Work and Pensions Secretary. “Harsh, punitive Conservative policies like the benefits freeze, the two-child limit and the five-week wait have created a society where people are being forced to turn to food banks in ever-increasing numbers just to survive.

“Labour will abolish the benefits freeze, scrap universal credit and put an end to the two-child limit. We will ensure that our social security system genuinely protects people from poverty as it should.”

Nevertheless, the policy has been top of charities and campaigners’ list of reforms for a long time along with pleas axe the five-week wait for Universal Credit that is pushing people into poverty.

The Child Poverty Action Group are one such group and feature an end to the cap in their election manifesto while Crisis chief executive Jon Sparkes said: “Everyone across Britain should be able to rent a safe, affordable home where they can build their lives from. So, it’s extremely disappointing to see the government’s commitment to lift the freeze on housing benefit fall short of enabling people to afford to keep their homes.

“Right now, families on the lowest incomes are facing agonising stress and anxiety because they cannot afford to pay their rent. This is made all the worse when we know it doesn’t have to be this way. Our research shows that by investing in housing benefit, so it covers the true cost of rents, government could lift more than 35,000 children out of poverty.”

The Resolution Foundation’s senior economic analyst Adam Corlett also warned that the announcement was a “missed opportunity” as it means that the most vulnerable people will only be able to keep pace with rising prices rather than being better off with an above-inflation rise.

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