Focus on: benefit cuts

Will Hodges reports on the coalition's cuts to welfare spending

This month saw the coalition government launch a major set of cuts to welfare spending with a cap of 1 per cent on a range of benefit payments and the scrapping of child benefit for higher earners.

The passing of the welfare uprating bill means that individuals receiving child benefit, tax credits, maternity pay and jobseeker's allowance will see their allowances increase by just 1 per cent a year until 2015, some way below the current 2.5 per cent rate of inflation. Meanwhile, individuals earning more than £50,000 will see significant reductions to their child benefit allowance and those earning over £60,000 will have their allowances stopped altogether.

The changes are part of the coalition's long-term efforts to reduce government spending on social programmes and narrow the UK's budget deficit. The move will reportedly save taxpayers £4.5 billion a year.

The benefits cap seeks to capitalise on a growing public backlash against benefit recipients characterised as "scroungers" who were able to "cheat the system" under the previous Labour government. Recent figures released by the government's work and pensions secretary, Iain Duncan Smith, appeared to support the cuts, claiming that a combination of benefit fraud and administrative error under Labour had cost taxpayers £10 billion.

The second demographic group to come under the axe is high-earning parents receiving child benefit. Until now, all families, irrespective of income, had been eligible to receive payments of around £20 a week their first or only and around £13 for any additional children. The removal of the payments means that a family of four where one parent earns more than £50,000 a year will be more than £1,700 worse off come 2014.

Despite perceived public support for the cuts, the measures have been the focus of a fierce media backlash in recent weeks because ordinary working individuals stand to be among those hardest hit. The Guardian claimed that the cap on benefit rises will leave a wide range of public sector workers worse off, including 40,000 soldiers, 300,000 nurses and 150,000 primary and nursery school teachers.

Meanwhile, the changes to the government's child benefit policy mean that a family with two parents both earning £49,000 a year will be entitled to full benefits, while a family with one earner on £60,000 will see their allowance cut altogether.

Far from tapping into the popular mood - and resentment against supposed abusers of the welfare state - the changes introduced by the coalition risk giving the impression that the parties are out of touch with ordinary people. The savings made to public spending through the measures are not insignificant, but they represent a relatively small proportion of the government's outgoings which currently total £700 billion a year. With a general election now just two years away, the coalition will need to tread carefully with its next step.

We asked students what they think about the cuts

*"I can't see how the cap would save that much money compared to other government spending, and it seems unfair to punish people who are already struggling to get by. It seems the government is only capping benefits to appease people who want to stigmatise benefits recipients." *Abi Bennett - University of Cambridge

*"Child benefit should be a privilege that is universally available; scrapping the benefit appears to be, primarily, a politically prudent move. The 1 per cent cap on welfare benefits leaves the poorest households exposed to inflationary shocks, which means that their benefit, in real terms, could diminish further in the coming years." *Tim Rooke - LSE

*"The scrapping of child benefit for high earners is, in my opinion, a really bad policy as it is middle class families who will suffer. The policy won't affect the highest earners as they're wealthy enough without it. It is the middle class families who put the most into the welfare system through taxes and pensions who will suffer, which seems unfair." *Ellie O'Sullivan - University of Bristol

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