Tory conference: Freeze on benefits will hit families hardest, warn charities

Speaking at the Conservative party conference today, the chancellor George Osborne pledged to freeze benefits for two years after the next election, in 2016 to make savings of £3 billion.

The freeze will affect jobseekers’ allowance, income support, tax credits, child benefit and housing benefit.

Matthew Reed, chief executive of The Children’s Society, called the move a ‘brutal blow’ for millions of families already hit hard by repeated cuts to critical support.

‘The majority of those affected would be the children of working parents who would see further real-term cuts to their child benefit and child tax credits,' he said.

‘Far too many families in this country are already struggling to provide a basic standard of living for their children because of the three-year one per cent annual cap in benefit rises put in place at the start of last year. 

‘This cap would extend the period of the one per cent squeeze on families to half a decade - a typical family could lose as much as £1,300 per year by 2018 as a result. Losses in support with rents will come on top of this.’

His comments were echoed by the Joseph Rowntree Foundation and the TUC.

JRF chief executive Julia Unwin said, ‘Plans to freeze welfare for two further years will make things worse for our economy, with more people living below the poverty line leading to lower tax revenues and the wasted potential of millions

‘The economy is beginning to recover, but for people on low-incomes, the forecasts are heading in the wrong direction. Without concerted action, millions of people are going to find it harder to meet their basic needs and have already borne a sizeable burden of deficit reduction in this parliament.

 ‘George Osborne talked about the importance of choice - for many families today, their choices just got a whole lot tougher.’

Frances O’Grady, general secretary of the TUC, said, ‘The Chancellor’s new cuts would hurt working families with children most of all, pegging their tax credits and housing support behind rising prices and rents. This is yet more chipping away at the social safety net working families pay into, putting them in greater danger of destitution if they become sick or lose their job.’

The Child Poverty Action Group (CPAG) argued that freezing benefits would put more children in poverty, while the charity Gingerbread expressed concern for single parents.

Alison Garnham, chief executive of CPAG, said, ‘This is bad news for working parents struggling on low wages, already coping with rising living costs and previous benefit cuts

‘Independent projections by the Institute of Financial Services make clear that cuts in the uprating of benefits will be the single biggest driver of the sharp rise in child poverty expected in the next few years. Today’s announcement would inevitably put more children in poverty and further questions claims the Government is on track to meet its 2020 child poverty targets.’

Fiona Weir, chief executive of the charity for single parents Gingerbread, said, ‘This is a cut that would hit families both in and out of work. Two-thirds of working single parents say their finances are already a constant struggle. Freezing benefits paid to people coping on low-incomes, such as working tax credits, means making some of the poorest in society bear the brunt of cuts.

‘Our research has found single parents are doing all they can to make up the difference, whether taking on extra hours, doing a second job or even cutting back on food. This new cut would put intolerable pressure on those who have already been hit disproportionately by the recession and public spending cuts.’