The five most controversial welfare cuts the Government is making

Labour is split on whether to oppose some of the provisions in the Welfare Reform and Work Bill

Jon Stone
Tuesday 21 July 2015 12:56 BST

Scores of Labour MPs are set to defy their acting leader and vote against the Government’s planned welfare changes and cuts. Amid all the political positioning and talk about who will vote for what, it’s easy to forget what is actually being proposed.

The Welfare Reform and Work Bill contains of a large number of measures, but there are five that have stood out as particularly controversial.

Reducing the welfare cap

reduce its “welfare cap” on the total amount a household can receive from £26,000 to £23,000

The reduction mainly effects households with large numbers of children in areas where rents are expensive, because figures this high can in practice only be reached through child benefit and housing benefit.

In March 2014 when the original welfare cap was introduced, the charity Save The Children warned that 345,000 children would be pushed into poverty by it.

Shortly after the election this year a leaked DWP memo warned that the further reduction in the cap confirmed in the Budget would push a further 40,000 children into poverty.

Labour claims it is against child poverty but that it must accept the policy for strategic reasons. The Government claims that it is unfair for state support to outstrip wages.

The measure saves very little money as it only affects a very small number of people, albeit harshly.

Abolishing child poverty targets

scrapping a legally binding child poverty target

The current target measures how many children are in families with a low income. The target is also legally binding, which means the Government could be open to legal challenge if a policy appears to be particularly damaging to child poverty.

Iain Duncan Smith says this measure is not relevant and that instead child poverty should be measured by looking at educational attainment and worklessness in households.

The new measure would also not be legally binding, meaning that any Government policies that raise child poverty could not be challenged in court.

Most people would probably say these metrics are either causes or symptoms of child poverty rather than actual poverty itself, which is about how poor you are. Labour is united in opposition to the move.

Cuts to child tax credit

The Government is cutting the benefit to save money. Families with more than two children who apply for the payments in future will not receive tax credits for their third or subsequent children.

Critics have labelled the cut a ‘two-child policy.

The Government is also steeply reducing the level at which tax credits are withdrawn from families who earn money from work. 500,000 households will move off tax credits and 300,000 off Universal Credit.

Harriet Harman, Labour’s acting leader, said Labour should not automatically oppose the proposals, but she faced strong opposition.

Disability benefit changes

Claimants on ESA assessed as likely to be able to return to work at some point in the future will have their payments cut by £30 a week.

The disability charity Scope warns that the cut will “make life harder at a time when disabled people are already struggling to make ends meet”. Labour says it opposes the cuts.

Cutting housing assistance for young people

Two homelessness charities, Crisis and Shelter, have said that the policy will lead to a further increase in homelessness.

“Some young people have very clear reasons why they cannot live in the family home,” a joint briefing by the charities from earlier this year warned.

The policy saves very little money. George Osborne has said he believes the cut will be “good for” young people. It may also be a political trap for the opposition.

Labour did not rule out a similar cut at the election and considered similar restrictions on benefits for young people in the previous parliament.

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