Ministers’ logic ‘difficult to comprehend’ as benefits hit 35-year low

Poverty experts have condemned the government’s choice to let benefits levels fall far below the real cost of living.

From today [April 11] social security payments will rise by just 3.1 per cent, despite inflation hitting 7.7 per cent and expected to reach 9 per cent later this year..

It means a real-terms income cut for millions of people relying on benefits to afford essentials, and the single biggest cut in the value of basic unemployment payments for 50 years.

It is “difficult to comprehend the logic” behind the chancellor’s choice not to protect the value of benefits, said Peter Matejic, deputy director for evidence and impact at the Joseph Rowntree Foundation (JRF). The organisation’s analysis showed that benefits have dropped in real-terms value in eight of the last ten years.

“The government has chosen to weaken the incomes of the poorest at the worst possible moment,” Matejic added. 

“A decade of cuts and freezes to benefits have left many people in our society in increasingly desperate situations, struggling to afford food, energy and basic hygiene products.

“Without urgent action from the government, the stark reality is that the situation could get much worse.”

JRF repeated calls for ministers to increase benefits in line with the real rise in living costs as well as strengthening the social security system, which was “already woefully inadequate” before the cost of living crisis. Around 600,000 more people will be pulled into poverty this month, the analysts said, around a quarter of whom are children.

Rishi Sunak told MPs he did not want to borrow more money to increase public spending on benefits, and that the government would focus on helping people into work instead. Around 40 per cent of people claiming universal credit are already in work.

The 3.1 per cent rise is tied to inflation levels recorded in September 2021, before energy bills and food prices soared so high that financial guru Martin Lewis was forced to publish a “cost of living survival kit” for those with an immediate need to cut down their essential spending. Families impacted by the benefit cap – which limits the amount someone can receive through social security, even if the government assesses their need to be higher – will not receive any more cash at all.

Sunak said that it would not be possible to increase benefits in line with current living costs, because the system used by the Department for Work and Pensions creates a “four- to five-month lag” between policy decisions and implementing them.

Dame Clare Moriarty, chief executive at Citizens Advice, said the charity has “heard stories of families resorting to heating up tins of beans over a tealight, or choosing between giving their kids a hot bath at bedtime and putting on the heating for an hour while they dress for school.”

The second biggest annual fall in benefit value was in 2010, but this followed a significant increase in payments the previous year meaning low-income households did not have to wait a year for their incomes to catch up with prices. Today’s real-terms cut places the value of benefits at a 35-year low.

“We are deeply concerned about the consequences of today’s benefits changes”, said Emma Revie, chief executive at the Trussell Trust. “This is a real-terms cut for millions of people on the very lowest incomes, during the worst cost-of-living crisis in a generation.

“Right now, too many families are already making impossible decisions between heating and eating, and we know people are skipping meals, unable to afford to run cookers and fridges and taking on debt to buy the essentials.”

The government is at risk of “pushing hundreds of thousands more people through the doors of food banks over the coming months”, Revie added.

“For people most at risk from soaring living costs – who cannot work or work longer hours due to disability, caring responsibilities or mental health issues – there is very little protection ahead and many will now be pushed beyond breaking point.”

A government spokesperson said ministers had cut fuel duty, increased the minimum wage and provided support to pay for energy bills, adding: “We recognise the pressures people are facing with the cost of living, which is why we’re providing support worth £22bn across the next financial year and benefits are being uprated by the usual measure, September’s inflation figure.”