Cuts to push 250,000 into poverty as living standards for the poorest under continuing assault – JRF

Responding to the Chancellor's Spring Statement and the publication of the government's impact assessment for their planned cuts to disability benefits, Paul Kissack, Chief Executive of the Joseph Rowntree Foundation said:

“The Chancellor said today that she would not do anything to put household finances in danger, yet the government's own assessment shows that their cuts to health related benefits risk pushing 250,000 people into poverty, including 50,000 children. This will harm people, deepening the hardship they already face.

“The Chancellor also said the world has changed, and today's announcements places the burden of that changing world on the shoulders of those least able to bear the load – the 3.2 million families left worse off by these cuts. 

“With living standards for the poorest under continuing assault, the government needs to protect people from harm with the same zeal as it attempts to build its reputation for fiscal competence.”   

Key points from impact assessment: •  250,000 people could be pushed into poverty, including 50,000 children•  800 000 will lose money from PIP according to the OBR, and almost half will be from reassessments•  3 million will lose money from changes to the main health element of Universal Credit, £500 a year for existing claimants, and £3000 for new claimants•  £500m will come out of the carers benefits bill as 150 000 lose carers allowance or UC care elementNotes to Editors

1. JRF will be conducting analysis of the Chancellor's Spring Statement and impact assessments on disability benefits throughout the day. This includes example families and how they may be affected by the various cuts, which will be updated later today How health-related benefit cuts add up | Joseph Rowntree Foundation
2. Last weekend, JRF modelled forecasts from the Bank of England and other major forecasters ahead of the spring statement to project households' disposable income (including their housing costs and amounts paid in tax) for each year until 2029/30. JRF found that the past year could mark a high point for living standards in this parliament as the average family looks set to end the decade £1,400 worse off than they are today, with the poorest hit hardest. This will be updated today to reflect the new picture on living standards.
3. The methodology is the same as is outlined in Annex 1 here The real inheritance: UK living standards crisis at October Budget | Joseph Rowntree Foundation, but updated with new forecasts.
4. Proposals the Chancellor could look at around tax could include building on existing reforms designed to tax the returns on wealth and investments at an equivalent rate to earnings from work, such as reforming Capital Gains Tax or applying National Insurance Contributions to investment income.