Restoring the benefit cuts – a look at our manifesto and the Labour Party’s manifesto

In 2017 we proposed spending more than the Labour Party on reversing some of the benefit cuts since 2010. This year the Institute for Fiscal Studies after looking at both of our manifestos concluded, that while we both increase benefit spending “to around its 2010 level … this money doesn’t go as far as it used to, because of underlying pressures pushing up benefits spending, including rising housing costs and a bigger population. Taking these into account, these pledges would only reverse around a quarter of discretionary cuts to benefits since 2010.”

According to the Labour Party’s costings they plan to increase spending on working-age social security by £8.4 billion by 2023/24 (page 4). (They just give a total without breaking the figures down.) In their manifesto they state they will scrap the benefit cap and the two-child limit, they will split benefit payments for couples, and they will restore fortnightly payments and paying the housing element directly to landlords (page 73).They will also end the ‘digital only’ approach for claiming benefits. All these reforms were suggested by Philip Alston the UN Rapporteur on extreme poverty in his report this year. Furthermore, they will scrap the bedroom tax and increase the Local Housing Allowance by an unspecified amount, end Work Capability and PIP Assessments and make sure these are done “in-house”. They will restore the extra money for those in the Work-Related Activity Group receiving Employment and Support Allowance cut by the Conservatives.

The Labour Party claim that they “will eradicate in-work poverty in our first term by tackling the structural causes of poverty and inequality, such as low pay and high living costs, while raising the floor provided by our social safety net” (page 59 of their manifesto). I couldn’t find in their manifesto what they would increase benefit levels to. I believe for a couple, one of which works 16 hours a week on Labour’s new National Living Wage of £10 an hour, for their income to reach the poverty line the couple’s benefit level would need to be increased by just over £46 a week (about 40%) even assuming work allowances were restored to their 2015 level for people without children. I estimate this would cost in the region of £11 billion a year.

 According to our costings by 2023/24 we will be spending £3.33 billion on tackling in-work poverty, £2.82 billion on tackling child poverty, £1.28 billion on supporting disabled people and £2 billion to make the welfare system fairer (page 3). We state these amounts will succeed in “ensuring that the welfare system incentivises people to work by reversing cuts to work allowances, introducing a new second-earner work allowance and increasing support for self-employed people. … making changes to the welfare system that will reduce child poverty by scrapping the two-child limit and the benefit cap. … reform(ing) the welfare system to better support disabled people by reinstating the Independent Living Fund and reversing cuts to the Employment Support Allowance for the Work-Related Activity Group. … making the welfare system fairer (by) … increasing support for bereaved parents, scrapping the bedroom tax, linking Local Housing Allowance to average rents in an area and raising the amount people can earn before losing their Carer’s Allowance from £123 to £150 a week while reducing the number of hours’ care per week required to qualify for it.” 

In our manifesto we state, we will “introduce an incentive-based scheme to replace the current sanctions system” and “end Work Capability Assessments and replace them with a new system that is run by local authorities and based on real-world tests” (page 65).

 Our extra annual spend by 2023/24 totals £9.34 billion, £1.03 billion more than Labour is promising.

So just as in 2017 we are promising to spend more than the Labour Party on the working-age benefit system.

* Michael Berwick-Gooding is a Liberal Democrat member in Basingstoke and has held various party positions at local, regional and English Party level.

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21 Comments

  • According to the Resolution Foundation (https://www.resolutionfoundation.org/press-releases/conservative-manifesto-risks-child-poverty-reaching-record-highs-while-no-manifesto-will-reduce-it/) “major policy changes have reduced support for working-age households since 2010, resulting in overall spending in 2023-24 being around £34 billion a year lower on current plans than had the 2010 benefit system remained in place”.

    This means that the Labour Party are reversing 24.7% (8.4/34) of the working-age benefits cuts, while we are reversing 27.7% (9.43/34). Sorry for the mistake £9.34 billion should be £9.43 billion.

  • It’s good to have Michael BG’s expertise in setting out the detail. What I hope now is that the party leadership and spokespersons will do the same with clarity and conviction….. instead of being on the embarrassed defensive whenever they are tackled on, for example, the bedroom tax. A struggling football team never wins if it fails to get out of its own penalty area.

    My concern is a lack of interest and knowledge in the issues set out so clearly in the Alston Report. Our Deputy Leader even admitted to me in conversation in September that he hadn’t read it.

    Jeremy Corbyn’s evident discomfort last night in the Andrew Neil interview on his broadbrush approach to the WASPI women where, for example, the millionaire Teresa May would qualify for a £ 22,000 pay out shows that the devil is in the detail.

    I hope Ms Swinson gets her homework done before she too enters the arena with the dreaded and very well informed Mr. Neil.

  • I wish the Liberal Democrat and Labour Manifesto went a little further in their manifesto on ending the WCA and bringing them in house.
    I think there was scope to also develop 1 test that covers all disability benefits.
    As it stands we have some seriously disabled people who claim multiple disability benefits, ESA, PiP and possibly even industrial Injuries Benefit.
    Often these vulnerable claimants are having to fill in multiple different forms and undergo multiple assessments with different review dates for each benefit. This puts an enormous amount of undue stress on already vulnerable people when it could quite clearly be developed to have one disability test that covers all benefits. It would save all this costly bureaucracy of multiple testing. It would also ensure that the correct amount of benefit is going to those that need it, there are Hundreds of Millions of pounds that goes unclaimed by vulnerable disabled people because either A) they are unaware that they can claim or B) the process itself is so disabling that they decide not to claim and will settle for the subsistence level of 1 Benefit to lower the stress upon themselves.
    This surly cannot be right in a compassionate society that wants to look after its most vulnerable citizens. We do it for the elderly and try to ensure that they claim what they are entitled to and their is wide spread support for that, so why not for disabled people?

  • I thought I was pretty sure that I was going to be voting Tory ( for the first time in my life) as yes I want Brexit done.
    However, due to todays leaks around US/UK trade talks on the NHS and specifically around US patents on medicines being made for longer and costing the NHS more money I am now awaiting a response from the Tories and Boris and what assurances I can get.
    I am glad that I have not yet put a mark on my postal ballot and will wait to see the outcomes over the next week before posting.

    I still will not vote LD in this election and cannot risk putting Corbyn in Government as that scares me even more, so it is looking more likely that I will not actually vote for the first time in this election.

    As much as I want Brexit done, I will not risk our NHS which will be detrimental to our most vulnerable people in society

  • Rightwing thinktanks unveil radical plan for US-UK Brexit trade deal

    Groups linked to Trump and Fox want foreign competition in NHS and regulations bonfire
    ……..

    The IFT/Cato Institute free trade deal recognises that its proposals are likely to be unpopular. “Health services would benefit from foreign competition, although we recognise any change to existing regulations would be extremely controversial,” it says.

    It recommends testing the waters with foreign competition in education and legal services first.

    The proposals are likely to meet fierce opposition from trade experts on the left. Nick Dearden, director of Global Justice Now, said: “The measures supported in this paper represent a free trade utopia, entirely divorced from economic reality. The authors view good government as ‘getting out of the way’ of business, and letting profit drive every aspect of our society. If carried out, these policies would destroy huge swathes of our economy, including farming, and they would lay waste to public services.”

    https://www.theguardian.com/politics/2018/sep/18/rightwing-thinktanks-unveil-radical-plan-for-us-uk-brexit-trade-deal-nhs

    Tis the Brexiteers long term plan Matt. You can have Brexit or you can have the NHS you can’t have both. Your call live with the consequences.

  • Matthew Huntbach 27th Nov '19 - 3:09pm

    matt

    I thought I was pretty sure that I was going to be voting Tory ( for the first time in my life) as yes I want Brexit done.

    And you want our country to be run by an extreme right-wing government, as that is what the right-wing of the Conservatives, who have taken over the party, want to leave it for.

  • Katharine Pindar 27th Nov '19 - 4:34pm

    Matt, it is incredible to me that anyone with any Liberal Democrat sympathies can consider voting for the Conservatives under the present government led by Boris Johnson, which has already been denounced by former Tory leaders and present Tory moderate MPs. Apart from the failings of its leader, a man apparently without a moral compass, it is of no use to look to that party now for help for the working poor, the disadvantaged and unfortunate, or people with disabilities. They have been left to suffer during these years of Tory hegemony, and their numbers have grown. The Alston report in May, and the reports of think-tanks such as the Resolution Foundation, as Michael BG highlights, are falling on the deaf ears and indifferent mindsets of the present Tory leadership.

    It is good to know, as this very useful article shows, that both the Labour Party and our own are intending to enhance welfare benefits, and that our intended provision is larger than Labour’s, probably contrary to popular belief. But it is clear that less than 30% restoration is not generous, and as David Raw writes, we need our leadership to take up the cause with clarity and conviction. What relevance has passing Brexit, other than making their situation possibly worse, to the struggling families and ill-housed or homeless individuals of our society, as they face another winter?

  • For the avodence of doubt Matt you can have Brexit or you can have a functioning NHS you can’t have both. Hard choice and it is yours to make.

  • Matt, I wonder in what way Brexit will be “done”, by the Tories winning the election. The other 27 EU countries have not voiced their demands yet and we are in for years of negotiation with the world and his dog and we will be massacred in my view. Johnson has shown that he is willing to move some workers rights, consumer and environmental standards from the table and my own fear is now that he has been gifted an early election, the stable door has been opened and he will gallop through.
    By refusing any extension next year, to me, he is signalling that he is heading for a no deal, hard brexit and will blame the EU and it has been shown that it is easy to whip up popular feeling.
    It will not be a question of restoring benefit cuts or extending cover.

  • Jayne Mansfield 27th Nov '19 - 8:00pm

    @ Matt,

    As you await a response from the Tories and ‘Boris’ and the assurances they might offer, on a scale of 1-10 how confident are you that you that those assurances would be truthful?

    If 1 is not at all, and 10 is absolute trust , I would give a score of 0 based on past evidence.

    I am afraid that voting Tory to get Brexit done, surprises me, I hadn’t marked you out as someone who would be so easily gulled.

  • @frankie
    I believe you can have Brexit and a functioning NHS (which is privatised off)

    @Margret @ Jayne
    I am actually quite prepared for a No Deal Brexit as I have said all along that I take view that the UK is better placed in the long term away from the EU as I believe the whole experiment is going to fall on it’s backside when the next financial crash come and Italy, which we all know is a totally bankrupt country holding over 40% of all of the EU’s bad banking loans (seriously do some research on Italy and tell me it does not scare you)

    @Jayne
    With regards to the Tories and those assurances. No I do not have a lot of trust for the tories, that is why I have never voted for them ever before in my life, BUT, Brexit is a huge issue for me. However, you can rest assured that I will be spending my time constructively over the next week trying to find out all that I can about those NHS negotiation Trade leaks and I will come to an informed opinion at the end of it, If I am not satisfied and I feel that the NHS is going to be sliced up in a trade deal with the US then you can rest assure that I would not vote Tory in this election and I put my desire for Brexit behind my beliefs for the NHS and I will more than likely not vote at all in this election.

    Anyway, lets get back to the topic at hand “welfare and restoring the benefits system” and talk about the article itself as it is not getting anywhere near the attention that it deserves

  • Ooops sorry previous post was supposed to (which has NOT been privatised off)

  • Matt,
    You believe many things most of which are incorrect. You so want you Brexit that you’ll ignore reality. You are far from alone in that the Brexit obsession is wide spread. But when it happens and bad things happen and they will, they may well happen to you. Don’t think conservativehone will listen to your pleas when the bad times roll, it will be devil take the hindmost and I’m afraid many a Brexiteer will find the hindmost is them. Reality will cure you of Brexit, the reality of trying to survive will leave you no time for Brexit inspired fantasy assuming of cause you survive and with austerity on steroids many won’t. We are entering the school for fools and many won’t make it through to graduation. I’m aware many fantasists only learn from hard experience and my God they will be learning rapidly with Brexit.

  • Jayne Mansfield 28th Nov '19 - 5:14pm

    @ Matt,

    The NHS as a bulk buyer of drugs is viewed with avaricious eyes by the American Pharmaceutical Industry.

    In America, and I have a relative who is recently retired from working within the American healthcare system, he who pays the piper calls the tune , whereas within the NHS, our National Institute for Clinical Excellence, takes an evidence based approach to NHS procedures, balancing costs against possible, if any benefits of particular drugs/ medical/ surgical procedures. This currently protects UK patients from expensive, unnecessary procedures carried out at needless public expense.

    Do you really think that Trump is going to take an American stake in the NHS off the table when negotiating trade deals?

    I agree that you should check out the claims made by Labour regarding the un-redacted documents for yourself. It is important that you do so. Whatever our differences on Brexit,I think we can agree that the NHS has been a noble endeavour. One that I aver would have collapsed without the contribution made by commonwealth health workers, since the 1940’s and those encouraged by Enoch Powell as conservative health minister) in the 1960. Without them, and the unpaid dedication of those still working against the odds, and to the point of exhaustion to provide a service, we would have no NHS.

  • Katharine Pindar 29th Nov '19 - 12:44am

    Returning to the important subject of this article, about restoring the benefit cuts, it’s good to know that the Institute for Fiscal Studies find us more fiscally responsible than the two larger parties, despite our more generous welfare intentions. But we need to do so much more, and for my part I would rather hear more details about intended provision for the poorest than that our childcare provisions are going to be quite lavish. It’s the facts about growing child poverty in this country, and how many working parents are having to scrape by with the assistance of the Food Banks, which I would like to hear our leaders repeating and demanding action on from the next government.

  • Yesterday I came across a March 2018 OBR report on welfare. I was shocked to read that “the cuts in welfare spending announced in the 2010 to 2015 Parliament session, (are) estimated to amount cumulatively to £21 billion in the (year) 2015-16. They value the Conservative post the 2015 general election benefit cuts at £10.3 billion by 2019-20. The value of the increase to some Universal Credit Work Allowances announced in 2018 are £1.1 billion in 2020-21 which are not taken account of. Therefore the cost today of these cuts is about £30.2 billion. No political party is promising to reverse all of these cuts. Personally I think both us and the Labour Party should be saying how we are going to reverse these cuts at least over the next seven years. It is only once these cuts have been reversed that the benefit levels can be raised further to raise everyone in the UK out of living below the poverty line.

    Katharine,

    We are promising spending an extra £9.43 billion on our benefit changes by 2024-25 and £13,990 billion on “Early years and childcare: providing free, high-quality childcare for children of working parents from nine months and for all children aged 2-4; investing in children’s centres; tripling the Early Years Pupil Premium; and, increasing statutory paternity leave from two weeks to six weeks” (pages 3-4 of our costing document).

  • Thank you Michael for pointing out the true £ 30 billion financial cost of the welfare cuts over the last nine years. Truly staggering. In people rather than money terms, will Lib Dems please ponder the direction of travel of stats from the Trussell Trust up to April 2013 – and then more recently April 2019.

    24/04/2013
    BIGGEST EVER INCREASE IN UK FOODBANK USE: 170% RISE IN NUMBERS TURNING TO FOODBANKS IN LAST 12 MONTHS

    Numbers given emergency food 100,000 higher than anticipated : UK Foodbank charity The Trussell Trust says this must be a wake-up call to the nation. 346,992 people received a minimum of three days emergency food from Trussell Trust foodbanks in 2012-13, compared to 128,697 in 2011-12 – up from 26,000 in 2008-09. In 2012-13, 126,889 (36.6 percent) were children.

    The year 2018/19

    The year April 2018 to March 2019 was the busiest year for food banks in the Trussell Trust’s network since the charity opened. Last year 1,583,668 three-day emergency food supplies were given to people in crisis in the UK; More than half a million of these (577,618) went to children – an 18.8% increase on the previous year.

    There is an article on LDV today supporting the Laffer Curve. Will Lib Dems please ponder how much is being taken out of the economy by taking £ 30 billion from the spending power of the poorest members of society.

  • Katharine Pindar 1st Dec '19 - 10:30pm

    Well, exactly, Michael and David. Not nearly enough financial commitment in our Manifesto to relieving benefit hardship, much more on early years’ provision and child care, which will clearly be of interest to parents of infants. But what of the many parents forced to ask more from food banks in the last year – the BIGGEST EVER INCREASE IN UK FOOD BANK USE IN THE LAST TWELVE MONTHS, as you report, David. And one cause has just been reported, in last Sunday’s Observer – that more than one million households had a deduction from their benefit payment made in May, the last month for which the figures are available .Nearly a third of all people currently receiving Universal Credit are having more than a fifth of their payment cut, the report continues, often to repay loans made to tie them over during the five-week wait for the first payment to arrive. In this vicious circle, no wonder they go to food banks for help.

  • Katharine,

    In May according to government figures there were 2 million people on Universal Credit. A third is about 667,000 people. In May 1.8 million households were “on Universal Credit” but 7% of them received no payment. (https://www.gov.uk/government/publications/universal-credit-29-april-2013-to-11-july-2019/universal-credit-statistics-29-april-2013-to-11-july-2019).

  • Peter Martin 3rd Dec '19 - 9:17am

    ” according to government figures there were 2 million people on Universal Credit. ”

    That’s too many. It’s time we stopped focusing so much on the raw unemployment figures and looked at the bigger picture of poverty and inequality. If the numbers on UC were much less then there would be less political opposition to the system being more generous.

    That can only happen if the progressive parties restore their commitment to the concept of full employment nationally and not just in the more prosperous SE of England. At present the Lib Dems are caught up in their own neoliberally spun web.

    The issue of the 20,000 lost police men and women is a good example. Removing them from the national payroll hasn’t helped reduced the govt deficit. The govt loses their tax and NI contributions for starters. The remaining money doesn’t circulate in the economy to be collected later as taxes. The Govt’s income is dependent on its spending. Reduce the spending and you reduce the income.

    So why not say ‘let’s just reverse the process’? Why insist on raising taxes to ‘cover the cost’? The cost of what? If the higher taxes weren’t needed before the cuts they aren’t needed now.

  • Peter Martin,

    Lots of people on Universal Credit are in employment or receiving other benefits rather than Job Seekers Allowance. Therefore the number on Universal Credit does not equal the number unemployed. There are 1.31 million people unemployed according to the ONS, which is 3.8% of the working age population (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/november2019 ). If there were less than 1 million I would consider we had reached full employment. However, there would still be people, a few millions (maybe 3), who would work if provided the right support.

    Regional unemployment varies from 2.6% in South West England (Northern Ireland 2.5%) to 5.9% in North East England. West Midlands and London rates are 4.5% (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/regionallabourmarket/november2019). (It is interesting to note that the inactivity rates are lowest for the South West (16.8%), South East (18%), and East (19%)).

    With 14 million people living in poverty in the UK it is not just an issue for those not in work. Political parties need to address this issue. Fiscal and monetary policies to achieve full employment will help and regional economic stimulations are needed as well.

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