Monday, 15 October 2012

The straw that breaks the camel’s back

90% of the benefit cuts, that the government has announced so far, are yet to be implemented. And, because the coalition government’s economic strategy has failed, David Cameron has announced that an additional £10bn cut in the welfare budget must be made. The media were briefed that these additional cuts would be targeted at financial support for people in work.

Already, changes in the rules on eligibility for working tax credits have had a big impact on families who have been unable to increase their working hours. From next year, changes in housing benefit and council tax benefit will hit many low income working families very hard.

Let me tell you about Janet.

She left school at 16 and went straight into full-time work. It was low-paid and the prospects were poor. Later, she started evening-classes, got some qualifications, but had to move away from home to get a better job, but her bigger income was swallowed up by rent and travel costs.

When she was 25, she met Paul. Like her, he’d also got on his bike to find a job. They saved up and got married 2 years’ later, but found that, despite both working full-time, they would never be able to buy a home in London and the high rent meant there was little spare cash.

Paul was offered a job back home in Sheffield. They jumped at the chance, found a private flat to rent and, after a couple of months, Janet also got a part-time job. House prices were increasing rapidly, again out of their reach. They put their name down on the council’s waiting-list.

Then, Martin arrived; they hadn’t planned to have a baby then, but they were delighted. Janet gave up work to look after him. When he was 5, they were offered a three-bed council house; it wasn’t in the area they wanted, but they’d make it their home. Janet went back to work part-time. They paid full rent and council tax. They put all their spare money in to decorating and furnishing the house just as they wanted; they never borrowed for anything.

And then, when Martin had just started secondary school, Paul became ill. The cancer was ravenous. He had to stop work and, as he became more ill, Janet gave up work to look after him. Last year, Paul died. Janet and Martin were devastated. The funeral costs wiped out their savings. Janet’s mum gave them a lot of support, travelling 30 miles to stay with them for two nights each week. They’ve had to make a new life.

Janet has now got a part-time job, but her employer can’t offer her the extra hours necessary for working tax credit. Financially, they can keep their head just above water. But, she’s worked out the sums. Next year, she’ll have to pay more council tax, because of the government’s cut in council tax benefit. And, now, they’re deemed to be living in a house which is too big for them; so, her housing benefit will be cut as well. Together, she’ll be about £20 a week worse off. If she moves to a smaller home – from the one they’ve carefully made into a home over the last 7 years – she can’t afford to re-furnish it, and her pensioner mother would have to sleep on the couch.

Janet and 39 other similar Janets will be facing financial catastrophe and family disruption so that a millionaire can have a £40,000 tax cut next year. For Janet, these cuts will be the straw that breaks the camel’s back.