Critics Challenge Conservative Claims of Benefits Rising Too Much
- 02 Jan
The Government claim that out-of-work benefits have increased in value by 20% since 2007, compared to a rise of 12% in private sector pay.
However, Labour say they overall they are lower than wages and that Conservative are out of touch with reality with further cuts are pushing people into poverty.
Work and Pensions Secretary Iain Duncan Smith has said that the increases have cost £6.3bn since the start of the recession, and he says these figures prove that raising benefits with inflation is unfair on tax payers.
The Government wants to cap most working-age benefits and tax credits, including child benefits, housing benefits and universal credit, and stop them from rising with inflation, to which Labour opposes.
Critics say this cut to the budget will hit working families who are struggling on low wages the hardest, and increase homelessness and hunger.
Mr Duncan Smith said:
Working people across the country have been tightening their belts after years of pay restraint while at the same watching benefits increase. That is not fair.
The welfare state under Labour effectively trapped thousands of families into dependency as it made no sense to give up the certainty of a benefit payment in order to go back to work.
This government is restoring fairness to the system and Universal Credit will ensure it always pays to be in work.
However, Labour has produced its own analysis claiming that Jobseeker's Allowance (JSA) has risen less than wages in the past decade. The shadow work and pensions secretary Liam Byrne said longer-term figures showed JSA had risen by 32% since 2002/3 while average earnings rose 36% over that time.
Liam Byrne said:
Iain Duncan Smith has given the green light to a £14bn cut to tax credits that's pushing millions of working families into poverty and now means thousands of part-time workers are better off on benefits.
Now he wants to hit working families again with his strivers tax bill. Yet this omnishambles government thinks its right to give an average £107,000 tax cut for 8,000 millionaires.
This Tory-led government is comprehensively out of touch with the reality of Britain's working families.
On Monday the work and pensions secretary released figures claiming fraud and error in the tax-credit system had cost taxpayers £10bn under Labour.
Critics have challenged many of the facts produced by the government, saying they exaggerate problems such as fraud and the number of large families who depend on benefits. Channel 4's FactCheck blog have questioned Iain Duncan Smith's claim and said figures from HM Revenue & Customs showed fraud accounted for just 0.7% of all tax credits paid out by Labour from its introduction in 2004 to 2010.
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