By Catherine Ross
If our household income was suddenly reduced by 20 per cent, we would struggle. We would immediately have to tighten our belts dramatically. First to go would be all the little things that improve our quality of life – takeaways, trips to the cinema, new clothes.
Just cutting out the treats probably wouldn’t be enough. We’d have to take a long hard look at more fundamental stuff like our food bill, our energy bills and the cost of transport. There wouldn’t be money for dancing lessons for my daughter or rugby club membership for my son.
If we had only a few weeks’ notice of such a reduction in our income, we would probably get into financial trouble quite quickly as we reorganised our finances and got used to our new budget.
I don’t imagine our situation would be that remarkable. I suspect many would struggle to absorb a 20 per cent cut in their income.
Unfortunately, that’s exactly what the government’s own figures suggest will be the result of the benefits cap that will come in from July. Instead of assessing families according to need, the government has decided that single people should have their benefits capped at £350 per week and couples or single parents shouldn’t receive more than £500 per week.
This doesn’t mean that people automatically get that amount – there will still be plenty of people claiming significantly less, but that is the most people can receive, regardless of circumstances.
Not only will the benefits cap include housing benefit and jobseekers allowance, but also carers allowance, widowed parent allowance, child benefit, child tax credit and maternity allowance.
The government says that the cap is in line with average earnings and claims that it is designed to give people an incentive to work – but where are they supposed to work? Unemployment rose to 2.5million in the three months to January. In some areas of the UK, unemployment is at 10 per cent.
At the same time, private property rental costs are at a record high, food, fuel and energy is progressively more expensive and inflation is at 2.8 per cent. As far as I can tell, there is no policy to sit alongside the benefits cap to reduce property rental, food, energy or fuel costs. There is no new scheme to guarantee jobs for the unemployed. Once again, people on benefits are being demonised because of their circumstances.