The Benefit Squeeze

As food and rent prices rise, the government ensures that the income of millions of families shrinks. Just like the public sector pay freeze, the benefits freeze – which sees benefits capped rather than, as was standard, rise in line with wages – knowingly caps the money the state provides below the rate needed to pay for rent, food, and bills.

Due to run until 2020, the freeze hits many of the key working-age benefits, from child and housing benefit to employment support allowance (ESA) for disabled people too ill to work. It is as damaging as any cap on wages, and is widely recognised as a key driver behind forecasts of rising poverty to come.

The homeless charity Shelter warns that freezing housing benefit will force families to find hundreds of pounds extra every month to avoid eviction, while the Children’s Society estimates that more than 7 million children from some of the country’s poorest households are affected – losing up to 12% from the real value of their benefits over the next four years.

The benefits freeze is becoming crueller than even the Tories imagined: research from the House of Commons library shows that, because of inflation, the cap is cutting people’s support by almost 50% more than official estimates. Due to rising inflation, the measure introduced last year is now expected to reduce support by £13bn over the next four years, compared with the recent official Government forecast, of £9bn.