Indira Kartallozi explains why the introduction of the universial credit system, or changes to benefits enitlements will not lift people out of poverty
The Welfare Reform Bill 2011 represents the biggest change to the UK’s welfare system in over 60 years. Most crucially, it includes the introduction of a universal credit system, as well as a wide range of changes to social benefits, all with the intention of making the welfare system fairer and simpler.
I welcome the policy’s objective to simplify the benefit system. However, I do not believe that the new system will be fairer or that it will improve work incentives for a household. The policy states that the “universal credit should support all people to participate fully in society, including remaining in or returning to work; it will encourage families to get a job”.
So how is this going to work? The universal credit will replace current means-tested benefits. As from October 2013, all benefits – including income support, income based job seekers allowance, income related employment and support allowance, housing benefit and council tax benefit, child tax credit and working tax credit – will be abolished. These, together with crisis loans, community care grants and budgeting loans, will be replaced by single payments to each beneficiary’s account, subject to an overall cap or maximum benefit.
The employment minister Chris Grayling states that in “the households that are likely to be affected by the cap, approximately 30% of them will contain somebody who is from an ethnic minority.” Since the government has projected a maximum of £500 per week it is clear that large families will be affected.
When the government’s child poverty strategy was unveiled earlier this year it claimed to have a new approach to tackling poverty by “strengthening families, encouraging responsibility, promoting work, guaranteeing fairness and providing support to the most vulnerable”. Yet, at the same time, the government has cut crucial funding of services that provide support to the most vulnerable families, such as the closure of Children Centre’s across London.
The child poverty strategy highlights support that the government will offer parents to find work tailored to the particular barriers they face. Yet, they later introduced changes to benefits entitlements that will affect access to key support services, such as the right to free English classes. Specifically, all those in inactive benefits (such as income support, housing benefits) are expected to pay 50 per cent of the cost of their courses.
In an article for the Daily Mirror, CPAG Chief Executive Alison Garnham states: “Poverty for Britain’s children is now predicted to rise in the coming years and the £18 billion of benefit cuts will help drive this. The cuts to services will hit the poorest hardest too. It is grossly unfair to target children and families facing hardship when the bankers are back to their bonuses and tax cheats are costing us billions. This bill means too many vulnerable people are set to be losers, and too many people will find the promise to make work pay is not being kept.”
As an advice worker, working with homeless families, I cannot help but feel uncertain for the future welfare of the families I support and advise. I don’t see how the Welfare Reform Bill 2011 and the introduction of the universal credit system, or changes to benefits entitlements will lift people out of poverty
How will it support the families to achieve financial independence when further barriers are created? How can the same government that wishes ethnic minorities to integrate into the society and wants parents to find a job proceed to cut crucial services and the support in place to help alleviate poverty?
Indira Kartalozi is the Senior Advice and Outreach Worker for CARIS Haringey working with homeless families, migrants, refugees and asylum seekers.