The Spending Review 2013: What it means for welfare

kamsandhu —  June 27, 2013 — 2 Comments

Yesterday, Chancellor George Osborne announced the Spending Review for the year 2015. Osborne has already conceded that the coalition plans to cut the deficit are two years behind (i.e. not working), despite the harsh cutbacks already enforced to welfare, the NHS and the public sector. He blames this on ‘lower than expected’ growth. So now, the coalition answer to a failing austerity plan, is more cutbacks. Yes, you heard right. This time another £11.5bn.

George Osborne delivering the Spending Review Image: The Telegrapg

George Osborne delivering the Spending Review Image: The Telegrapg

So let’s see how welfare will be affected after George Osborne’s deja-vu performance:

1) Once someone loses a job, they must now wait 7 days before they can make a claim for Jobseeker’s allowance

An inspired idea from the chancellor, which seems to punish someone for losing their job (while he also announces a review that will cause more redundancies). An increase on the previous 3 day gap, jobseekers will now have to last longer without help. Many on Twitter added that this will be far more than 7 days, as Universal Credit is paid monthly so the time could be anything from 7 days to possibly 38.

Screen shot 2013-06-26 at 22.12.16

In a response to this particular point, the Chief Executive Child Poverty Action Group, Alison Garnham said:

“The decision to delay eligibility for Job Seekers Allowance to seven days is a ‘foodbanks first’ policy that will hurt families stuck in the low pay – no pay cycle, moving in and out of insecure, low-paid jobs, and will lengthen foodbank queues. We’re talking about parents doing the right thing but who have very little in the way of savings to tide them over if they lose their job. There should be no doubt this will leave more families and children cold and hungry and push more families towards doorstep lenders and foodbanks.”

2) Stricter rules for receiving out-of-work benefits

Whilst still hugging tightly to the disproven idea of cultures of ‘worklessness’, the Chancellor retreated a little by saying ‘Where is the fairness in condemning people to a life on benefits because the system won’t help them get back into work?’

And so, to help claimants, they will have to arrive at the Job Centre with a CV, be set-up and logged onto Job Search online, start looking for work and then they can receive their benefits.

Single parents can now receive free child-care for children ages 3 and 4, and so Osborne said that it is fair for those with children over the age of 3 to make efforts to look for work.

On top of this, job-seekers will now have to sign on every week, as opposed to every other week, and will be given more time with advisers.

Hopefully, this will be helpful, as it will also cost more money, to see advisers twice as much and for longer. One wonders, why the Chancellor cannot get large tax-evading companies to also see an adviser once a week to ensure they are up to date with all of what they owe to the tax-pile.

3) Those looking to claim benefits must speak English, and if they don’t, then they must be enrolled on a course. 

It’s very probable that someone with difficulty speaking English would appreciate a course to help them. Such a shame then, that this very government were the ones to cutback on the amount of English courses and places available, two years ago.

You would imagine that the government would also lead by example in their own English. So the misspelling of ‘Britain’ in the first line of the document about the spending review was probably really bad-timing:

'Britian' mistake

‘Britian’ mistake

At this point, it would be criminal not to mention yesterday’s Tweet of the Day, from Andrew Selous – Tory MP and advocate of people ‘leaning’ English:

Andrew Selous - Practice what you preach.

Andrew Selous – Practice what you preach.

3) Overall national welfare cap to be announced every four years

The national welfare budget will be decided at the Budget and set for the next four years, taking into account inflation to stop it from ‘ballooning’ as politicians like to say. Should the budget be breached, benefits will be squeezed and the government will have to report to the Office for Budget Responsibility (OBR) to explain why. State pensions and unemployment benefits will not be included in this cap. But tax credits, housing benefits, disability benefits and pensioner benefits will be included.

In response to this, Caroline Lucas commented:

“The way to address the deficit is not by further cuts to public services, including tightening the financial stranglehold on local authorities, or failing to get people into work and arbitrarily capping welfare spending regardless of need.

“It is to invest in jobs – borrowing money based on record low interest rates – mount a serious crackdown on tax evasion and avoidance, and bring forward green quantitative easing to deliver investment directly into the infrastructure we urgently need for a more resilient, stable economy.”

4) Winter fuel payments will be withdrawn from pensioners living in hot countries 

The winter fuel payment will not be paid to those who have migrated to ‘hot’ places. This will be decided via a ‘temperature test’ and can depend on where in a country you are. Not too much was said, but this will be an interesting one when rolled out.

Those were the main points in direct relation to welfare.

Other cuts were made across many areas, with only things like education (money for 180 free schools), intelligence (snooping on us more) and defence escaping with more cash than before.

Local councils will also see cuts to their funding. Public sector pay rises were capped at 1%, and Automatic Pay Progression was stopped. This is when you receive an automatic pay rise perhaps every year for your service. Osborne defended this by trying to divide workers in saying it wasn’t fair on those who didn’t receive it. However, there are already many companies and firms within the public sector that had already stopped paying this when the government announced a pay freeze.

Council tax will be frozen for two years to help with ‘living standards.’

To see a more detailed break-down of the Spending Review 2013 click here. But, here’s a handy infographic to see where money has being cut and spent since the coalition came to power (Thanks to the Resolution Foundation @Resfoundation):

Cuts and spending Image: resolution foundation

Cuts and spending Image: resolution foundation

The Chancellor of course added his usual rhetoric of how ‘tough’ this is, and decisions are ‘tough’ and kept referring to the analogy/motto of the month which is that Britain is out of ‘intensive care.’ However, there is already a prediction that this hospitalised nation will still have a slow and arduous recovery. The Institute for Fiscal Studies predicts that taxes will increase after 2015 to deal with the deficit, because even these cuts are not enough to save us. The director of the think-tank, Paul Johnson predicts that austerity will continue to 2018.

Thank you, Osborne.

 

by Kam Sandhu @KamBass

kamsandhu

Posts

kambass@hotmail.co.uk

Trackbacks and Pingbacks:

  1. What We Learned Last Week (24/06 – 30/06) « - July 1, 2013

    […] To find out how welfare will be affected read more here.  […]

  2. Media: Britain is Booming? « - August 14, 2013

    […] the Spending Review was announced in June, the coalition government have had no more cuts to announce before the 2015 election. And so, the […]

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