In an attempt to divert attention from his failure to meet his own fiscal targets, George Osborne knew that he would have to pull a political rabbit out of the hat in last week’s autumn statement. So he pledged to uprate benefits by just one per cent in each of the next three years, placing a trap in which he hopes the opposition will fall. He claims to be on the side of the ‘strivers’, and anticipates that by rejecting the cap Labour would position themselves alongside the ‘scroungers’.
The chancellor seemed rather pleased with himself, but I believe he will fail. And that is because the story he told is frankly not one that I recognise in my constituency of North Durham. Here, and throughout the many hard-pressed areas of the UK, wages are often low and the work is too often part-time, meaning that many rely on benefits to top-up their income.
On the whole benefits are not funding lifestyles of closed curtains and widescreen TVs. They are a way of keeping many hard-working families’ heads above water. Median gross weekly pay for a full-time employee in North Durham is only £440 per week (compared to a national average of £510). It would take almost 20 years’ wages for my average constituent to make the same amount of money that the chancellor made in profit from the sale of his country manor and horse paddock.
4,200 households in my constituency receive working tax credits, who will lose anything between £88 and £124 a year because of the chancellor’s freeze. Additionally, 12.5 per cent of my constituents receive housing benefit, most of whom are in work, and almost three-quarters of whom receive less (often much less) than £75 per week. These are people who will feel the full force of Osborne’s cynical politicking, and the people whose side we in the Labour party need to be on.
Many people are unaware of the changes that will take effect from April next year. One exception is a particular constituent of mine. He is a 59-year-old who has worked all of his adult life, with his wife working all the hours she could get as a part-time cleaner. He was recently made redundant, and has since taken a job part-time in a petrol station. They live in a three-bed house, which will now also be targeted by the Treasury’s new ‘bedroom tax’, losing £728 per year in addition to Osborne’s autumn statement benefits cut. This may not seem a lot to the millionaires on the government frontbench, but makes a huge difference to those striving and struggling to keep afloat.
The benefits bill is too large, but the only way to cut it is to instil jobs and growth in the economy, and to find ways to raise stagnant wages. Of course, there are some who play the system, who we must make every effort to prevent from doing so.
However, punishing those who work hard and try to do the right thing is not only unfair but is also economically illiterate. By definition and necessity poorer people tend to spend most of their income, whereas richer people save more. By capping benefits increases at a rate lower than inflation, therefore, Osborne is removing vital cashflow from the demand side of the economy in areas like North Durham, which are already struggling because of this government’s economic mistakes.
My fear is that decisions like this will only hasten the arrival of a two-speed Britain, something I have written about before. This government is exacerbating and entrenching longstanding regional inequalities, with areas like the north-east being left behind.
The chancellor thinks he has backed Labour into a corner. Instead, by giving millionaires a tax cut, by failing to clamp down on corporate tax avoidance, by cutting maternity pay, and by cutting benefits for the majority of recipients who are in work and struggling on low incomes, he will have roused the British sense of fairness.
My constituents know the reality of the situation, and they know that Osborne’s attempt to label all those on benefits as scroungers is insulting and will not work.
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Kevan Jones is MP for North Durham. He tweets @KevanJonesMP
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The article gives one example of a 59 yrs young man who is working for, say, 50 quid a week at a petrol station. Bravo. The guy has some get-up-and-go; IDS will be chuffed . The April 2013 laws by regarding his rental increase should be looked at again. They are expecting people to pay extra for what is, more than likely, only a boxroom ? . These new extra room rents-laws are not aimed at the guy above, but at some other, quite distinct parties who may not be named as it may offend certain PC sensibilities ? ( btw – 3xbedrooms for a couple ? Pushing it a bit ? )
But there is a massive Elephant in that spare Room that needs to be addressed.
Knock the box room into a bathroom and you have solved it, no well people are doing it by me.
It’s not just working people who are ‘striving’, many disabled are too. The difference is we’re striving to get up in the morning, striving to make our meals, striving to have some sort of social life, striving to not be suicidal.
I’d like to see the Labour Party ‘striving’ to stop us being demonised, get to it comrades.
sadly Labour’s not the party for you then, and Progress is still in mourning for Blair .
It’s not just working people who are ‘striving’, many disabled are too. The difference is we’re striving to get up in the morning, striving to make our meals, striving to have some sort of social life, striving to not be suicidal.
I’d like to see the Labour Party ‘striving’ to stop us being demonised, get to it comrades.
It is so important to get these matters in the media so the appalling demonisation of low-income people from the Mail and Express is met with some resistance. Yes- Many people in the South East are really lucky- I must know of at least 4 families or more jetting off for cruises and long haul holidays -but all of them dislike Osborn’s attack on the low income groups lets not assume the real middle class down here are pro-Tory especially when its Thatcherite. There is disgust in the UK at this government and its all over the country.