The Chancellor’s Spring Statement demonstrates the Government’s inability to comprehend the devastating impact of the cost of living crisis on disabled people.
Despite inflation, fuel costs and food prices skyrocketing, they have chosen to push through a reprehensible real terms benefits cut – forcing people deeper into poverty.
Living with a condition like, for example, multiple sclerosis can be relentless, painful and disabling and recent analysis from the Disability Benefits Consortium shows that some of the hardest hit disabled people will face an unthinkable real terms cut of £1,432 per year. This will leave some facing impossible choices between food, medication and other essentials.
Talking about a cost of living crisis while pushing through a real-terms benefits cut is like telling someone about a storm while drilling a hole in their boat. The Government must increase benefits levels in line with inflation, or disabled people’s health will suffer even more.
Another problem is that many disabled people in work are low-paid and Ministerial statements and media comment tend to be misleading whenever tax thresholds (the point at which you start paying) are increased.
Raising (from July) the National Insurance (NI) contribution threshold to align with the point at which Income Tax begins to be paid has to be right in principle. NI contributions are a form of income-based taxation so there really is no case for their kicking in at a lower level of income. Correcting this anomaly is long overdue.
However, raising tax thresholds (whether, as in this case, NI – or, as in previous Budgets, Income Tax) tends to be presented as a concession to low-paid workers. This is misleading, for two reasons:
· The extra income applies to all contributors or taxpayers, so is not particularly targeted at the low-paid
· Those claiming means-tested benefits will lose most of the extra income in reduced benefit. For example, a low-paid worker getting Universal Credit will lose 55p. in the £ of any increase in net income, plus possible further losses in local means-tested Council Tax Support.
Another measure announced by the Chancellor that is less good news than it at first seems is the extra £500m. for the “Household Support Fund” (a cash-limited pot administered by local councils on a discretionary basis). These are useful payments for those who receive them, but this is a small amount compared with the scale of the cost of living crisis and it enables central government to deflect responsibility onto local government. When individual cases of hardship come to light, Ministers can blame local Councils for not making discretionary payments.
To emphasise again: in our view, it is the Government’s responsibility to increase benefit levels in line with the real, current rate of inflation