Poverty in the UK: Families suffer as cuts to Council Tax benefit begin to bite

7th May 2013

They are defined by the right-wing press as ‘benefit scroungers.’ What was once a safety net is now tainted with unfair and unjust stigma. Benefit cheats are paraded as the government’s headline reason to cut benefits and reform welfare. The Chancellor, George Osborne uses repetitive rhetoric labeling them ‘skivers and not strivers’. The government act as if a life relying on the state is one chosen for its luxuries. Research shows that the word ‘scrounger’ has been used increasingly over the past few years which only encourages public perception that the majority of claimants are not worthy of the benefits. The graph below illustrates the number of times the word “scrounger” has been used in UK newspapers since 1994:

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The Government states that cuts to welfare are necessary in order to reduce the country’s deficit. That austerity is the way forward to avoid another financial disaster. Stories of benefit fraud are exaggerated by the press and made to appear as the norm for all benefit claimants, yet the government’s own statistics show that benefit fraud is actually just a small percentage of 0.7 per cent of the total benefit expenditure – or £1.2bn – which is being overpaid (Department for Work and Pension, 2012). In comparison, the HMRC estimates that £5bn a year is lost through tax avoidance and a further £5bn is lost due to people illegally not paying the tax they owe.

The head of the International Monetary Fund (IMF) Christine Legarde has recently said that Osborne needs to seriously reconsider his austerity plans and two top credit agencies – Moody’s and Fitch – have both reduced the UK’s previously prestigious AAA credit rating to AA+; a sign of a slow and declining economy. Despite this, and numerous other think tanks and economists telling the government to change direction the government continue with its harsh and cruel ‘plan A’.

April 1st 2013 saw yet another flurry of ill-advised cuts. Perhaps two of the biggest changes being the ‘bedroom tax’ or, as the government prefers to call it ‘bedroom subsidiary’, and a reduction in the amount of Council Tax Benefit any family (apart from the elderly) can receive. CTB has been abolished, and in its place Council Tax Support (CTS) aims to give England’s 326 local authorities the power to create their own schemes but with 10 per cent less funding from the government. This means that the amount of council tax a person will have to pay will be dependent on where you are lucky – or not – to live. This can be anything from £100 – £300 per year which will unsurprisingly push families, children and disabled people who rely on the state for help, into poverty.

The Joseph Rowntree Foundation (JRF) states that 2 million working-age people that claim Council Tax Benefit (CTB) are in poverty and furthermore, most are in deep poverty (1.5 million). The poverty line is calculated yearly by the governments own survey “Households Below National Income” or “HBNI” for short. For the year 2011/12 the HBNI set the poverty line at any household income that was below 60 per cent of the UK’s median income. Deep poverty is anything below 50 per cent.

With increasing numbers of people falling below the poverty line, more pressure is being applied to charities to pick up the governments shortfall. Housing charity Shelter has said that in the last year it has seen a 40 per cent increase in callers to its helpline. Rising living costs, cuts to benefits and services and increasing amounts of debt are putting families at risk of becoming homeless. Only last month Shelter reported that almost a third of people are cutting back on food in order to pay rent. This, along with other economic factors has meant the need for food banks has increased dramatically. The Trussell Trust states that there has been a 170 per cent rise in the number of people turning to food banks in the last year; the majority were working aged families.

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Graph showing the increased need for food banks since 2010 as documented by the Trussell Trust.

The government has stated that those under occupying social housing will either have to move or pay for the extra room(s). The bedroom tax works in the government’s favour. The National Housing Federation suggests that there are currently 180,000 social housing tenants under occupying two bedroom houses in England, yet there are less than 70,000 one-bedroom homes available. This means that tenants have no option but to make up the shortfall.

Talking to The Guardian, Dave Ireson, was forced to move out of his family home of 30 years when he decided he could not afford to pay the extra room subsidiary of £20 a week, he said: All my history was there; my friends and children are nearby. But I didn’t want to be in a situation where I couldn’t afford the rent.”

Dave’s story is, unfortunately, one of many. Charlotte*, 28 from Cornwall is currently faced with having to pay an extra £15 per week to keep her 4 year old daughter and herself from having to move out. She has recently been made unemployed after the small firm she worked at was closed down. Her daughter Ellie* has autism and finds change extremely difficult as well as struggling with mild learning difficulties. Speaking via email Charlotte said: “I really don’t want to move Ellie at a time when she’s just starting school […] I know I’m going to have to make up the shortfall in rent by cutting my food budget or something. The thought horrifies me.”

*name changed

As the Joseph Rowntree Foundation states in its research into “The impact of localising council tax benefit” it is hard to imagine how a person relying on Job Seekers Allowance (JSA) which is £71.70 per week, is considered by the government to have enough money to pay a proportion of council tax in one area of the country, yet too poor to pay in others. Many families which need financial support from the state do not have the luxury of a disposable income. Money to pay the bedroom tax and/or council tax will likely come out of money which is put aside for food, electricity and gas.

 

Collectively the UK needs to eradicated poverty myths. The right wing media needs to stop scoring political points off of the small amount of benefit fraud. The only thing the UK is thriving in is inequality. The UK needs to find its compassion, after all, anyone of us could find ourselves in need of help.

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