The Guardian’s Politics Live feature reports an analysis of the impact of the Welfare Reform and Work Bill on the working poor. Read across locally, it has the effect of adding the DUP’s opposition to the UK’s government’s budget strategy to Sinn Fein’s, albeit on more limited grounds. The analysis was made by the highly reputable, unbiased House of Commons library and commissioned by Frank Field, the veteran free thinking Labour MP who is a leading authority on welfare and social policy. The analysis won’t make agreement on the Stormont House agenda any easier. The DUP voted against the Bill last night Their position is much more nuanced than Sinn Fein’s, as they accept the need to reduce the costs of welfare which as the Belfast Telegraph reports, have been ballooning, rather than deflating:
Almost £5.6bn was poured into welfare in the last 12 months – up 15% on five years ago.
At the current rate of spending our welfare bill will hit £6.4bn by the end of the decade.
Our current £5.6bn bill includes:
£971m spent on Disability Living Allowance, which has surged by more than 22% in five years;
£179m on Jobseeker’s Allowance – broadly unchanged from 2010 despite the number of people in work rising significantly;
£655m on housing benefit – a rise of 17% in the last five years;
And £734m on employment and support allowance, which has jumped by 39% in the last year.
In total, £5.583bn was spent on welfare in Northern Ireland during 2014/15, including £2bn on the retirement pension.
That total has risen by 15% since 2010/11, when expenditure added up to £4.851bn.
The figures were obtained by Ulster Unionist MLA Samuel Gardiner. He warned that the current rate of spending was not sustainable.
In the Commons last night Sammy Wilson, who never knowingly understates declared :
We support many of the measures in the Bill, which will be important in the debates we will have on it, but my role today is to highlight the things that cause us concern.
“I believe that this Bill will be the final nail in the coffin of the Assembly. Although Sinn Fein are not here tonight to raise the impact of these measures on people in NI, no doubt they will jump up and down in the streets of Belfast claiming that they are concerned about the impact on the vulnerable. It will join the other welfare measures blocked in the Assembly and the hole in the NI budget will grow even greater. The Assembly cannot survive another costly welfare reform crisis.
What the DUP among others fear is a two tier benefits cap which is the beginning of wider regionalisation that would permanently disadvantage Northern Ireland, where not all social costs are lower than the UK average.
The measure before us is the first step towards regionalisation, and we ought to be aware that in this Bill is contained the embryo of further cuts to the poorest regions of the United Kingdom, because that is where we are likely to find the pressure to try to reduce the welfare bill further.
On tax credits, I support the Government’s desire and objective to get people into work—to make work pay, to give people an incentive. That is why the proposals on apprenticeships, full employment reporting and so on are all good. But the change in universal credit, the freezing of benefits and the change in tax credits are, as the right hon. Member for Birkenhead (Frank Field) pointed out, an attack on aspiration. It is an attack on people who are in work.
The analysis commissioned by Frank Field shows that:
- 3.2 million strivers will lose an average of £1,350 next year.
- 754,900 families earning between £10,000 and £20,000 a year will lose up to £2,184 next year. Families earning £10,226 will be exactly £1,500 worse off.
- 51,600 families earning between £20,000 and £30,000 will be made worse off by up to £2,884 next year.
- 580,100 of Britain’s poorest working families earning less than £6,420 a year face the prospect of being ‘taxed’ for the first time. Those earning between £3,850 and £6,420 will lose 48p in tax credits for each pound they earn. This is a higher withdrawal of income than that imposed on the country’s highest earners. Families earning £6,410 a year will be £1,200 worse off as a result.
Field said Labour should be standing up for these “strivers”.
Before, during, and after the general election campaign the Tories rightly gained plaudits for their commitment to protect and advance the interests of Britain’s strivers. Yet in his first post-election budget the chancellor has decided to knock this group for six. He has torn up the contract they signed when they took it upon themselves to find a job. So here is Labour’s opportunity to put itself once again on the side of Britain’s army of strivers. First we must fight this double whammy of unfair cuts being forced upon them and, second, we need to push for improvements to the chancellor’s living wage proposal so that low paid workers genuinely are better off.
Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London