There are talks that the budget tomorrow may include a proposal that involves freezing benefits, something which will be highly regressive when taking into account the worries that inflation will increase and therefore the benefit freeze will turn into a benefit cut. Right wingers are highlighting what they see as a ‘economic benefit’ of such a freeze. For example, The Telegraph cite the following figures:
“According to the Institute for Fiscal Studies, freezing all benefits would save £4.1bn a year. Freezing benefits for an entire parliament would generate savings of £24.6bn by the fifth year, or 1.5pc of national income.”
This would be a disastrous move, and would be miles away from the progressive ‘aims’ of the coalition. Consider the 2005 General Household Survey, which provided a very stong link between poverty experienced and the benefits claimed by the heads of households. For example, 93.1% of Job Seekers Allowance heads of households claimants experienced poverty, and 75.2% heads of households did when claiming Income Support. This shows how damaging the cuts would be, as it would only see an increased level of inequality as the poorest become poorer.
This links to an interesting blog by Left Foot Forward that addresses how the coalition has failed and is failing to meet progressive values/bench marks. When considering progressive aims, if the benefit freeze does take place this would only further undermine government ‘attempts’ to make society fairer.
Take health inequality. Benefit levels being effectively cut would result in an increase in poverty and would make it harder for many people to eat properly, for example. The desire to abolish child poverty by 2020, well that will be further undermined if this came in place – as we would see families become poorer – and this will be compounded by increases in VAT, tax credit cuts and child benefits cuts. Income inequality has remained steady throughout the past decade after experiencing a sudden increase in the 1980s, the benefit cuts will only seek to increase income inequality and make it harder to reduce the income distribution in society.
Overall, cutting benefits would be extremely regressive. Instead, benefits need to see an increase alongside the introduction of a living wage. But seeing as the government only intend to increase minimum wage by a few pence, there is no sign that they would introduce such progressive measures.