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January 11, 2013 / politicsbitesize

A poorer new year for most

LaughingThis week the news has been full of the controversy surrounding the Welfare Benefits Up-rating Bill.  In his Autumn Statement the Chancellor outlined his plans to limit the annual increase of many working-age benefits to 1% for the next three years.  The proposal will affect the incomes of those in receipt of out-of-work benefits such as Job Seekers Allowance and Income Support, but it will also affect those who receive in-work benefits such as Tax Credits.

By default, benefits are up-rated each April in line with the Consumer Prices Index (CPI) and come into play in the following September.  CPI inflation in 2012 was 2.2% and is forecast to be 2.6% and 2.2% in the Septembers of 2013 and 2014 respectively.  Given these current forecasts of inflation, what the proposal actually means is a real terms cut in the incomes of the poorest households in society of around 4%.

Despite Labour’s call to stop the bill and the rebellion of four Liberal Democrat MPs, including former minister Sarah Teather, the Government’s controversial plan cleared the first Commons hurdle by 324 votes to 268, a majority of 56.   As the Bill passed on Tuesday night, a furious Owen Jones wrote a piece for the Independent calling for Labour to stand firmer against the Coalition’s proposals:

This government – a government with a flimsy, pathetic excuse of a mandate – is intolerable, and it must be stopped in its tracks. No more silent simmering with rage. Demand the Labour leadership offer an opposition worthy of the name.’

As the Coalition (read the Tory Party) reduce income tax rates for the richest in society while at the same time cut back on much-needed lifelines for the poorest, it is clear that something needs to be done.  And it is obvious from Owen Jones’s call to arms this week that there are millions of people out there who also want to see a change.



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