Welfare: On the Road to nowhere?

Ballooning benefits?• £190billion spend on benefits• 1/3 of all public spending• Bigger than defence and educationBut:• £110billion on pensions• £100billion collected in national insurance• Benefits spend is 13% of GDP, was reducing to

2008

Welfare reform• Overall, public spending is being

reduced 08-16 by 13.5%• More than half of this reduction is

being taken from benefits and local government

• £20Billion cut from welfare benefits/tax credits spend by 2016

Double/triple whammy?• £6billion through flatlining• £7.5billion Family benefits• £7Billion disability benefits• £2billion housing benefits

The “poverty premium”Stagnating wage levelsRising living costsShrinking social protection• families with a child under five have,

on average, lost 30% more of their disposable income than those with no children.

Hitting the poorest places hardest

• Britain’s older industrial areas, a number of seaside towns and some London boroughs are hit hardest.

• Blackpool is hit worst of all UK places – an estimated loss of more than £900 a year for every adult of working age in the town.

• A key effect of the welfare reforms will be to widen the gaps in prosperity between the best and worst local economies across Britain.

• the worst-hit local authority areas lose around four times as much, per adult of working age, as the authorities least affected by the reforms.

Impacts in Lancashire• £360M loss of income, impact on local

economy• Disability Living Allowance: 7K losers • Employment Support Allowance: 14K

losers• Child and family benefits: 150K losers

Examples of impact• Young job seeker, hit by car while

cycling to JC+ appointment. Benefit sanctioned.

• Pregnant woman, missed ESA appt came off of benefit, ended up sleeping in the goods entrance to Farmfoods.

Universal Credit• Universal Credit. Budgeted to cost

more but issues such as:– Direct payment of rent– Monthly payments– Tougher job-seeking rules and sanctions– Fewer “cliff edges”, better work incentives– simplification

Future changes?• Housing Benefit abolished for U25s?• Universal benefits, eg winter fuel

payments, means tested?• Child Benefit.• Pensions. Flat rate and raised

retirement age.• Employment Support

Allowance/JobSeekers Allowance scrapped?

Myth v reality• Benefit fraud at an all time low• Restrictions on benefits for “people

from abroad” at an all time high• “worklessness” untypical• ½ million families used foodbanks in

past year• Poor people pay more in tax

Jim’s manifesto• Policy based on fact not myth• Encourage rewarding work• Encourage social cohesion• Declare war on poverty• Declare war on inequality