The poorest and most vulnerable in the borough are not the only ones who need their benefits uprated by Jeremy Hunt – businesses and the local economy are depending on it, too, writes ANDREW FISHER
The Conservative Party’s claims to be “compassionate” will be tested in the coming weeks, both at Westminster and at Katharine Street.
Squeezed by rising bills and housing costs, more and more people are tightening their belts as winter approaches – and 100,000 households in Croydon will be waiting anxiously to see if their incomes will be cut later this month.
In two weeks’ time, at their delayed autumn statement on November 17, the Conservative Chancellor Jeremy Hunt is expected to reveal whether the government will uprate social security benefits in line with inflation.
Benefits are generally uprated in April each year, based on the inflation rate in the preceding September. In September 2022, the inflation rate hit 10.1per cent – and so in April 2023, benefits should rise by that figure just to allow people’s living standards to stand still.
If Hunt honours the inflation rate increase, it would mean a single person on the standard allowance of Universal Credit would receive an extra £33.83 per month, or £405 per year, or a disabled person receiving the higher rate of Employment and Support Allowance seeing their benefit increase from £117.60 per week to £129.48.
The 67,755 families in Croydon that receive Child Benefit will also be waiting to see if their incomes will be uprated in line with inflation. A family with two children could expect an extra £175 per year if Child Benefit is uprated by 10.1per cent.
Rishi Sunak, the new Prime Minister, claimed in the House of Commons, “I always acted in a way to protect the most vulnerable that’s because… those are the values of our compassionate party.”
Britain’s benefits are some of the least generous in Europe. In Ireland, if you lose your job and become unemployed you’ll most likely get around £180 per week. Here in Britain it’s £77. Ireland is no outlier. In Germany the system is even more generous.
The Joseph Rowntree Foundation states that the minimum income standard (which they define as the minimum necessary “to meet material needs and participate in society”) in the UK is around £227 per week.
Since 2010, benefits in this country have been held back, by three years of increases that were limited to 1per cent, followed by a four-year benefit freeze which eroded the value of working-age benefits.
There was some acknowledgement of the country’s poverty rates of benefits during the pandemic, when the government boosted Universal Credit by £20 per week. It’s telling than even a 10per cent increase in the standard allowance of UC equates to less than an extra £10 per week.
But even that is not guaranteed from Hunt’s first Budget as Chancellor. A 5per cent rise in benefits – mooted in some quarters as a compromise position, balancing the need for an uplift with the strains on public finances, would leave Croydon households £15million worse off in real terms.
Overall, around 100,000 households in Croydon will be affected by the decision, whether they’re unemployed, on benefits such as ESA, reliant on Universal Credit to top-up low wages, or just have children.
Between them they have more than £30million riding on whether or not Rishi Sunak and Jeremy Hunt decide to uprate benefits with inflation.
It is not just those households who will be praying, though. The Office for National Statistics confirmed last month that retail sales had fallen yet again, continuing “the downward trend seen since summer 2021”. Hard-pressed small firms know that without pounds in people’s pockets, their businesses will struggle even more in the coming year.
As more of household income goes on soaring rents and mortgage payments, and on energy bills that are 95per cent higher this year than last, families have less to spend in their local shops, pubs and restaurants, and other businesses. This is how “trickle-down economics” works – the only way it really works.
This comes after cuts in Council Tax Support for Croydon residents this year, as Croydon Council seeks to balance its books after a decade of funding cuts from central government, worsened by maladministration under successive regimes.
While we wait to see whether PM Sunak lives up to his commitment “to protect the most vulnerable”, it appears Croydon’s part-time Mayor (on full-time pay) is not going to.
Croydon’s charities and voluntary sector, who provide a range of services that support some of the poorest and most vulnerable in our community, face “an existential threat” with the withdrawal of the council’s £2.6million Community Fund.
Charities such as Croydon Citizens Advice say “we’re seeing more people coming to us for help with crisis support and energy problems than ever before” and “more and more people are going without heating, and are unable to do basics like turning on their fridge or heating their hob”.
Cutting the funding for that vital advice, which ensures people know their rights and are able to claim their entitlements, would be a cruel and malicious act against the most vulnerable people in Croydon.
- From 2015 to 2019, Andrew Fisher, pictured right, worked as the Labour Party’s Director of Policy under Jeremy Corbyn. He is the chair of the Croydon Central Constituency Labour Party. Fisher is also the author of The Failed Experiment – and how to build an economy that works, and now writes regular columns for InsideCroydon in a personal capacity
Some of Andrew Fisher’s recent columns:
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- ‘Rabbit hutch’ flats and the Chief Secretary: Philp’s conflicts
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