Last month a new report was published using research from Sheffield Hallam University, Joseph Rowntree Foundation and Oxfam. The report highlights the effects of pre-2015 welfare reforms and the anticipated impact of further reform across the United Kingdom. It is estimated that new reforms will take in the region of £13bn a year from claimants by 2020-21.
Despite the inclination of the national media to portray claimants as out of work, a significant portion of people affected by the reforms are actually those in full time employment on middle-to-low incomes. The report goes into intricate detail on how individual aspects of the reforms will affect different demographics in each local authority.
Barking and Dagenham ranked seventh overall in estimated financial loss from welfare reform up to March 2016 – equating to £540 a year lost per working age adult. However the anticipated loss by 2020-21 arising from post-2015 welfare reforms puts Barking and Dagenham as the third worst hit district in the UK.
Changes to child benefit, tax credits and the extension of the benefit cap are set to have the largest impact on local residents across the borough. Looking closely at the statistics it is possible to argue that former industrial areas where the local economies have struggled to rebuild, have been disproportionately affected by welfare reforms. This is partially due to lower average incomes in these areas. The most effected household type according to the data are single person working age households, and the household type set to lose the highest amount are those with one or more children.
Jon Cruddas MP for Dagenham & Rainham said: “These cuts are hitting families and working people, many of which are already struggling in tough financial situations due to low pay and underemployment. It is very clear that the Tories are not for working people, preferring tax dodgers to tax payers, multinationals over small business, and bankers over steel workers.
“The safety nets are gradually being pulled out from under people to the tune of £540 in Barking and Dagenham, which is completely irresponsible of this government. The socially damaging welfare and housing benefit reforms of 2013 have had a huge impact across my constituency, and with the recent Tory budget working people are not in the clear yet.”
According to the report the upcoming ‘pay to stay’ legislation, which is being introduced with the Housing Bill is anticipated to add to the damage caused by overall welfare reform. Barking and Dagenham has been estimated as being the sixth worst effected local authority in the country.
Jon added: “Pay to stay is going to inflame the housing crisis, taking another swipe at the lowest paid. There is an ever increasing number of people coming to see me in Dagenham & Rainham with worsening social and economic problems, which for the most part can be traced directly back to ill-conceived Tory policies.”
‘Pay to stay’ could see council and housing association tenants paying up to full market rent depending on their household income. In London if the combined income is over 40,000 a social tenant is required to ‘pay to stay’. This means that a couple both earning 20,000 – way below the London average, could be forced to pay full market rent which in some cases could be up to £934 for a one-bedroom flat in Dagenham.
The full report on the impact of the welfare reforms can be found by clicking HERE