Unions raise benefit cuts concerns

Sarah TeatherPublic support for a real-terms cut in most working-age benefits is based on ignorance of who will suffer, opponents of the welfare squeeze claimed as MPs prepared for a key vote.

Trade union leaders said polling showed most voters only backed the Government's proposed 1% annual increase because they believed the jobless were the main target.

Ministers say the cap is needed because it is unfair that state handouts have been rising twice as fast as wages during recent years of austerity. It is projected to slash £3.7 billion from the welfare bill.

But Labour is opposing legislation ending inflation-linked rises, pointing to analysis showing seven million working households will lose out by an average £165 per year, while children's campaigners warn it will push many more youngsters into poverty.

The vote will also expose tensions within the coalition over the issue, with Liberal Democrat former minister Sarah Teather intending to vote against the Government. In a reflection of the concerns of many Lib Dem activists, the ex-children's minister said the cap would make already serious levels of child poverty "significantly worse".

Ms Teather also hit out at Conservative ministers for seeking to make the issue one of "scroungers" versus "strivers" - accusing George Osborne of indulging in "playground politics". The Chancellor sparked Lib Dem anger after announcing the change with a direct appeal to people angered by neighbours' closed curtains when they set off for work in the morning.

Deputy Prime Minister Nick Clegg said on Monday that it was unhelpful "to try and portray that decision...as one which divides one set of people off against another". But, standing beside David Cameron at a Downing Street press conference to launch the coalition's mid-term review, he said it was right to cap benefits when pay was frozen or rising slowly.

Analysis of the Welfare Benefits Up-rating Bill by the respected Institute for Fiscal Studies (IFS) found half of working-age households with someone in work would be affected in some way. The average loss would be £165 a year for seven million families - compared with around £215 for the 2.5 million workless households hit by the cap, it said.

Children's Society chief executive Matthew Reed said a nurse with two children would lose £424 a year by 2015 and an Army second lieutenant with three children £552 a year. He said: "Many more will struggle to pay for food, heat their homes, and provide other basics for their children as they find it increasingly difficult to keep up with rising prices. The Government needs urgently to reconsider this bill."

TUC general secretary Frances O'Grady said its polling showed that people who knew most about benefits were opposed to the squeeze and accused ministers of exploiting public "ignorance". A survey by YouGov showed overall support for the 1% cap by 48% to 32% but also that a much bigger majority (64% to 21%) that it would mainly affect the jobless. Once told that it would affect low-paid workers, the move was opposed by 40% to 30%.
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