Row over benefits cuts rumbles on
Work and Pensions Secretary Iain Duncan Smith said many working-age benefits had risen by 20 per cent since 2007
The political row over welfare cuts has continued as the Tories and Labour traded statistics a week ahead of a Commons vote on plans to impose a real-terms benefits cut.
Work and Pensions Secretary Iain Duncan Smith hailed figures showing that "many working-age benefits" had risen by 20% since 2007, easily outstripping a 12% rise in private sector pay. Increases had cost the taxpayer £6.3 billion since the start of the 2008 recession, he said in a defence of the squeeze announced by Chancellor George Osborne last month.
But the Opposition, which has pledged to oppose the move, produced its own analysis suggesting that Jobseeker's Allowance (JSA) had risen by less than earnings over the past decade.
Legislation will break the traditional link between benefit rises and inflation. Instead there will be a three-year cap of 1%, well below the expected rise in the cost of living, on most working-age benefits and tax credits for three years from 2013/14. Child benefit, housing benefit and Universal Credit will be capped for two years from 2014/15. The restriction is predicted to save the Government almost £2.4 billion by the 2015 general election and a further £11.8 billion in the three years after it.
But critics say it will hit low and middle-income families and increase homelessness and hunger. George Osborne told MPs in his Autumn Statement last month that the incomes of those on out-of-work benefits had risen "twice as fast as those in work" over the last five years.
Frances O'Grady, new general secretary of the TUC, told Channel 4 News: "The Government is trying to pitch the unemployed against people in work, but the big losers of this cap will be families on working tax credits. In fact the average family with two kids on tax credits is going to lose over £1,000 over three years.
"Now that may not sound like a lot of money to ministers, but if you are a low-paid worker bringing up a family that's going to be very, very tough on top of cuts in real pay."
Conservative Party chairman Grant Shapps said: "This is just about basic fairness. Everyone knows the country has an incredibly difficult economic position and everybody has to contribute towards getting that right.
"At the moment we've got a situation where people on welfare are getting an uprating which is, as figures have shown today, nearly double that of people who are in work and somebody has got to pay for all of this. It can't be right to have people in work paying for bigger benefit rises than they themselves are getting in their own salaries."
He added: "Public sector workers are only getting a 1% pay rise, I don't want to see people on benefits getting a bigger rise than people who are working in the public sector."