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Discretionary welfare payments that are seen as a vital “lifeline” for Britain’s poorest families are being “hacked away” by the Tory Government, a Labour MP warned this week.

Frank Field MP, who chairs the commons work and pensions select committee, was responding to new statistics showing that more than £300 million has been hacked from the Discretionary Social Fund and Flexible Support Fund.

The emergency funds, which have replaced crisis loans, come in the form of interest-free budgeting loans that can be used to purchase crucial items like fridges and cookers.

The figures were uncovered by Labour’s former shadow cabinet minister Lucy Powell and show that Government spending on the two funds has fallen dramatically.

£419.5 million will be made available for the Discretionary Social Fund next year, compared to £679.7m in 2010-11 – amounting to a 38% cut in spending.

Meanwhile, Government spending on the Flexible Support Fund, which supports people in moving back into employment, has been slashed from £115m in 2012-13 to just £51m in 2016-17.

Frank Field said: “Once, we had a universal safety net protecting everybody from destitution.

“Then we moved to discretionary payments which might prevent destitution. Now, that even more crucial safety net is being hacked away.”

Lucy Powell said: “Funding from the flexible support fund can be a lifeline to some people, making the difference between a job and remaining out of work.

“With many people still unemployed, entrenched worklessness in some areas, and higher costs for some groups to get back into the labour market, the fund is an important tool to break the cycle of joblessness and provide extra support to help people get a job and keep it.

“It’s worrying then that the total budget for the fund has more than halved in recent years. If ministers really want to shift the dial on unemployment, they’ll ensure that there is adequate support for all those who need it.”

A spokesperson for the Department for Work and Pensions said: “We’re committed to providing support for people who need it and spend around £90bn a year on working-age welfare, an amount that will continue to rise.

“Changes to discretionary benefits are part of our wider welfare reform which is restoring fairness to the system, supporting those who can into work and helping those who can’t.”