Strict upper limits on the total amount that families can receive in state benefits continue to exacerbate a growing problem of poverty. Among children in the UK, absolute poverty has risen by its highest rate for 30 years, with new analysis from the Resolution Foundation showing that households in the bottom fifth of the income distribution have lost an average of £2,800 a year since 2010. Labour’s refusal to commit to lifting the two-child cap, which prevents parents of third or subsequent children born since 2017 from claiming child-linked benefits, means it is unclear if and how this awful situation will be remedied. While the school breakfast clubs that the party has promised are a positive measure, children should not need to go to school in order to eat.
The former prime minister Gordon Brown is campaigning for a £1bn social impact bond to promote the chances of the “children of austerity”. Charities are pushing for a statutory “essentials guarantee” – creating a floor beneath which benefits would not be allowed to sink. So far, Sir Keir Starmer’s team have refused to give ground.
Other changes to social security have particularly affected disabled people. Experts calculate that single people with long-term conditions that stop them working will be £2,800 a year worse off when they transfer to universal credit (UC) from the old system. A reduction in support for housing costs has caused another set of problems, although under UC, private renters in London and the south-east have received higher payments to meet rising rents.
Rishi Sunak has talked tough on benefits recently, with his unjustified and damaging attack on a fictitious “sicknote culture”. But the irony of his manifesto pledge to cut welfare spending by £12bn a year is that benefits have been relatively protected during his time in government. David Cameron and George Osborne are widely seen as having led a more moderate Tory party. But the latest analysis shows clearly that it was the benefit caps and freezes introduced between 2010 and 2016, under their austerity programme, that slashed incomes the hardest, and demolished the convention that social security should rise with inflation.
They also introduced the “triple lock” guaranteeing rises in the state pension. While this has protected older people from the adverse consequences of squeezed incomes, including hunger and homelessness, the Resolution Foundation highlights the size of the gap it created between pensioner and working-age benefits. Since Labour lost power in 2010, the real value of the state pension has risen by 16% – eight times as much as average earnings – while the poorest fifth of working-age households have lost 14% of their income.
Labour’s hope is that new jobs, improved skills and higher wages will provide a solution. Sir Keir wants to focus on the future. But there is also an important story to be told about how, over the past 14 years, benefit claimants were penalised while the public was discouraged by successive Conservative governments from recognising that working-age benefits, as well as pensions, are an essential part of the welfare state. The way that our economy is organised, particularly its overreliance on property prices and low wages, means that millions of working people, as well as those unable to work, rely on state support. That support should not be so meagre that they are forced into poverty. The next government must act to prevent this.
