Brent and Harrow
5 May 2016 Vote for
Sadiq Khan Mayor of London
Navin Shah GLA Brent & Harrow
Labour Party Londonwide

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“Heartless” Government targets most vulnerable with benefit changes

The changes to tax and welfare introduced by the Government this week will penalise some of the most vulnerable people in London, including children. The changes will also affect people with disabilities, young people, and bereaved families. I have urged the Government to “think again”, and said those who need advice about how they are impacted by the changes should contact the Citizen’s Advice Bureau. 

One area seeing major changes is Child Tax Credits, which provide up to £2,780 a year per child for families with children on low-incomes. Future payments will be now by cut by £545, and a two child limit has been introduced meaning families will not receive any further support if they have more than two children, unless at least one of their children was born before 6th April of this year. Latest figures from HM Revenue and Customs show that 158,700 children in London are in families who are in receipt of Child Tax Credits, with 8,200 of those living in Brent and 4,800 of those living in Harrow. 32% of children in Brent already live in poverty and the figure in Harrow is 26.6% after housing costs are taken into account. This is a figure that Mr Shah believes could rise as a result of the Government’s changes.

Employment Support Allowance (ESA), which is paid to people whose disabilities mean that they either cannot work at all, or need more support to stay in their jobs, will also be subject to cuts. People with disabilities who are deemed fit for ‘work related activity’ under ESA will lose almost £30 a week. There will be a complete withdrawal of housing benefit for those aged 18-21 who are out of work, and bereaved families will also be hit. Previously, families with children in which one parent died would receive just under £500 per month until the youngest child leaves full-time education. These payments have now been cut to £350 per month and will stop 18 months after the parent’s death, regardless of the age of their children.

Research from the Resolution Foundation has found that richer households will be unaffected whilst poorer households will lose out. London has the biggest gap between the richest and poorest residents in the country, and 27% of Londoners live in poverty after housing costs are taken into account.

These punitive cuts will leave many Londoners financially worse off, including the most vulnerable.

London’s high cost of living means that many people are dependent on child tax credits, housing benefit and Employment Support Allowance to get by. Amongst those penalised most severely by these cuts are families, people with disabilities, young people and the bereaved.

This is a heartless move from the Government who should be making life easier for those who are struggling, not making things harder. The 30 pence increase in the National Minimum Wage from £7.20 to £7.50 will do very little to bring Londoners out of poverty, especially in the context of these other changes.

Unsurprisingly, these changes will see the richest protected whilst the poorest lose. The Prime Minister needs to think again if this is what she considers an economy that works for everyone. I would urge anyone that needs advice about the changes to visit their local Citizens Advice Bureau.”

 

ENDS

 

Notes

 

-    Changes include:

  • Two-child limit on child tax credit, from 6th April;
  • Scrapping the “family element” of child tax credit for all families except those with a child born before 6th April;
  • Employment and Support Allowance claimants in the Work-Related Activity group (WRAG) will get £29.05 less per week;
  • Housing benefit scrapped for jobseekers aged 18-21, from 1st April;
  • New Bereavement Support Payment. Lump sum given to grieving families will increase from £2,000 to £3,500, but weekly taxable benefit of £112 (up until the youngest child leaves education) will be cut to £350 a month (with a time limit of 18 months), from 6th April. £500 per month figure is calculated by multiplying £112 by 52 and dividing by 12;
  • A report from End Child Poverty shows the number of children in poverty;
  • A report from the Resolution Foundation found that incoming tax and benefit changes will leave poorer households worse off, whilst richer households unaffected by benefit changes will be better off;