by Gordon Brown has urged Jeremy Hunt to act on shocking new research into Britain’s fiber benefits system which has shown that the poorest families have to spend an average of 63p in every pound to meet basic food and energy needs.
The former prime minister said the paper was a “wake-up call” to the Chancellor which “reveals the arithmetic of poverty”, and forces the UK to “face the fact that it is in crisis”.
The study highlights how a couple on benefits with two children will spend almost 50% more of their income on food and energy than in 2012, when the figure was 46p. This is due to the sharp fall in the value of benefits in real terms. The average UK household has the equivalent spend of around 20p in every pound earned, the report says.
Brown said the chancellor should use his budget on March 6 to “implement root and branch reform of the benefits system” to prevent further impoverishment of Britain’s poorest children.
On Thursday Hunt gave his biggest hint yet that he plans to make a big tax gift in his next budget ahead of this year’s general election. He was speaking at the World Economic Forum in Davos, an annual meeting at the Swiss ski resort attended by billionaires and politicians.
The unpublished briefing paper by Professor Donald Hirsch, entitled The UK’s Inadequate and Inequitable Safety Net, concludes that Britain’s benefits system no longer provides the basic amount needed “to function day-to-day and live a healthy life at you”.
He added that the need for competing basic costs – such as clothing, toiletries and transport – was likely to make the poorest households’ expenditure on food and energy inadequate, leading to serious health consequences for households. . Even if they cut back on basic items, other essentials would not be affordable, according to the Trust for Financial Fairness study.
The gap is even sharper for single adults on benefits. In 2012, the basic costs of food and energy rose to 73% of their weekly income, but in 2023 these costs were 22% more than the benefits provided to them, leaving them unable to eat to do right, not to mention clothes, toiletries and transport. expenses.
Hirsch wrote: “The level of working age benefits in the UK today is denying claimants access to the most basic material resources needed to function day to day and live a healthy life.”
He added: “There have always been shortcomings in the UK benefits system, with benefit rates not linked to evidence of need, serious administrative hurdles and delays and some people falling through the net income protection it is meant to provide.
“But today, all these features have become so pervasive that the benefits of protecting citizens in hard times are falling badly and systematically.”
Speaking to the Guardian, Brown said: “Britain has to face up to the fact that it is in a poverty crisis. Donald Hirsch’s important and ground-breaking research reveals the arithmetic of poverty, showing exactly why so many families on benefits are no longer able to make ends meet.
“It is an evidence-based call for the Chancellor to use his March budget to implement root and branch reform of the benefits system.”
The research into the inadequacy of the benefits system comes amid alarming growth in the number of families facing deep levels of poverty. Over 1 million children in the UK suffered from poverty last year, which meant their families could not afford to feed, clothe or clean them properly, or keep them warm.
Working age benefits fell to 13% below their 2009 peak, and their real terms value fell most significantly when the government froze benefit levels between 2016 and 2019. But this is exacerbated by holes designed into the safety net which mean most claimants now. receive less money than they are entitled to.
These include the bedroom tax, the two-child limit and the benefit cap, and deductions used to repay loan advances made to universal credit claimants who are waiting five weeks for their first benefit payment.
“These holes in the safety net are so large that receiving full entitlement is now the exception rather than the rule,” writes Hirsch.
He called for the current system to be reformed to ensure it provided a “fair and reliable” safety net, by setting up a government task force similar to the 2005 Turner commission, which established the principle that pensions should rise at least agree with him. earnings.
Hirsch calculated food costs by adapting publicly agreed minimum income standards that agree on how much is needed to have a moderately nutritious diet. Alcohol and eating out are not included in his calculations.
Writing in the Mail on Sunday, Hunt reiterated his desire for tax cuts in the next budget, comparing himself to former tax-cutting chancellor Nigel Lawson.
Hunt said: “Just as Nigel Lawson positioned the City of London for the financial boom of the 1980s, the UK is positioned in the period of the Conservative government for the huge technological boom that we will see in the coming years.”
Speaking at Davos on Thursday, he said: “In terms of the direction of travel, we look around the world and we notice that the economies that are growing faster than us in North America and Asia tend to have lower taxes that have, and I fundamentally believe that they are low. -tax economies are more dynamic, more competitive and generate more money for public services such as the NHS.
“That’s the direction of travel we want to go in, but it’s too early to say what we’re going to do.”
A spokesman for the Department for Work and Pensions said: “The best thing we can do to help those who are struggling is to put money back into people’s pockets. That’s why we’ve cut taxes and cut inflation by more than half while supporting those who need it most.
“We continue to help families with living cost support worth an average of £3,700 per family, including a 6.7% increase in benefits in April.”
