Chancellor’s welfare cuts will hit the safety net for hard-working people

Commenting today (Friday) on the Chancellor’s comment at the Treasury Select Committee yesterday that he planned to cut an extra £12bn a year from the welfare and benefits bill, TUC General Secretary Frances O’Grady said:

“The Chancellor now says that he will cut £12bn more out of the welfare and benefits bill. But this scale of cuts can only be made by removing parts of the safety net that we all rely on.

“Even if he completely abolished Jobseekers’ Allowance, Maternity Allowance, Statutory Maternity Pay, Industrial Injuries Benefit and Carer’s Allowance, as well as ending all benefit fraud, he would still fail to meet his target.

“The £12bn the Chancellor plans to find is 10 times the government’s own estimate of benefit fraud. Even if he eliminated all fraud – something the government has completely failed to do so far – he would still need to make more than £10bn worth of cuts.

“Of course we should deal with abuse in the system but hard-working people make national insurance contributions to cover themselves against the costs of losing their job, having a baby or having an accident at work. This scale of cuts cannot be achieved without destroying the safety net that anyone at work might need.”

The Department for Work and Pensions’ most recent benefit expenditure tables show how much the government is currently forecast to spend on different elements of social security.

TUC analysis shows that even if the Chancellor abolished most of the safety net he would fail to meet the £12bn of annual welfare cuts the Institute for Fiscal Studies (IFS) has assessed will be necessary by 2018/19.

NOTES TO EDITORS:

DWP social security expenditure forecast

Sources: www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2013, www.ifs.org.uk/budgets/as2013/openingremarks_AS13.pdf and

www.gov.uk/government/uploads/system/uploads/attachment_data/file/208563/FEM_1213P.pdf

- Commentary from Paul Johnson of the IFS on the £12bn of extra cuts needed by 2018/19: “For let’s not forget the scale of the cuts in spending still to come. By the end of 2013-14 DELs (that’s Whitehall spending on public services) will have been cut by just over 8 per cent. Absent further welfare cuts, or tax increases, plans to 2018-19 now imply cuts of more than 20 per cent in total public service spending. This would actually imply an acceleration in the rate of public service spending cuts – from 2.3 per cent a year between April 2011 and March 2016, to 3.7 per cent a year between April 2016 and March 2019. Simply to avoid such an acceleration in three cuts in this kind of spending would require cuts in welfare (or other AME) spending of a further £12bn a year by 2018-19.”

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Contacts:

Rob Holdsworth    T: 020 7467 1372    M: 07717 531150     E: rholdsworth@tuc.org.uk

Liz Chinchen   T: 020 7467 1248    M: 07778 158175    E: media@tuc.org.uk