Tuesday, January 19, 2021

Tory cuts will leave millions of families ‘permanently worse off’, says think tank

Fifteen-year income squeeze could leave families £1,200 a year worse off by 2025.

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Tory plans will leave millions of families permanently worse off unless the Chancellor reverses cuts to public sector pay and Universal Credit, as new analysis from the Resolution Foundation finds average pay packets could be cut by £1,200 a year by 2025.

The Resolution Foundation think tank warned “weaker pay growth and higher unemployment will serve to prolong Britain’s living standards squeeze”, which is on course to last for 15 years following the economic shocks of Brexit, Covid-19 and the financial crash.

The think-tank also warned the Chancellor’s plans to cut Universal Credit from April “will see around six million households losing over £1,000… just when unemployment is at its highest.”

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Torsten Bell, Chief Executive of the Resolution Foundation, said: “The Covid crisis is causing immense damage to the public finances, and permanent damage to family finances too, with pay packets on track to be £1,200 a year lower than pre-pandemic expectations.

“The pandemic is just the latest of three ‘once in a lifetime’ economic shocks the UK experienced in a little over a decade, following the financial crisis and Brexit. The result is an unprecedented 15-year living standards squeeze.

“Yesterday, the Chancellor chose to ramp up his Covid spending to £335 billion. But he also quietly dialled down his spending plans beyond the crisis.

“For all the talk of ending austerity, its legacy will continue for many public services throughout the parliament.

“While the priority now is to support the economy, the permanent damage to the public finances mean taxes will rise in future. But which taxes those will be, like which Brexit we can expect, are questions the Chancellor left for another day.”

It comes as a poll from YouGov suggests 61 per cent of Scots, and 54 per cent of people across Britain, think the Tory government is ‘wrong’ to freeze public sector pay’.

Commenting, SNP Shadow Work and Pensions Secretary Neil Gray MP said: “The Chancellor must reverse his decision to slash pay for public sector workers and cut Universal Credit – or he will leave millions of families permanently worse off.

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“The threat of a 15-year squeeze on incomes, comes after families have already suffered a decade of Tory austerity cuts and the damage of Brexit, which has taken billions out of the UK economy and pushed millions of people into poverty and hardship.

“By taking money out of people’s pockets, the Chancellor is making the Tory unemployment crisis even worse.

“He must think again and boost people’s incomes by reversing cuts to public sector pay, making the £20 uplift to Universal Credit permanent, extending it to legacy benefits, and delivering a fiscal stimulus of at least £98billion.”

Meanwhile, new benefit cap statistics released today show that 17,000 families will continue to be hit by the cruel policy, despite the impact of the Coronavirus pandemic on houshold incomes.

Seema Malhotra MP, Labour’s Shadow Minister for Employment, commented: “It is devastating to see the number of families hit by the benefit cap is still rapidly rising, with more households across the country being pulled into hardship.

“The Chancellor said this week that our economic emergency has just begun. The Government should try telling that to families being hit by the benefits cap at a time when people need the support the most.

“To help families struggling to get by this Christmas, the Government must scrap the cap now.”

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DWP faces judicial review after mentally ill man found ‘starved to death’

Errol Graham starved to death in June 2018 after the DWP stopped his benefits.