Desperation On The Dole As The Value Of Unemployment Benefit Falls.

 

Analysis published by the Joseph Rowntree Foundation (JRF) shows that in April the value of the basic rate of unemployment benefit fell by the greatest amount since 1972.

 

Peter Matejic, Deputy Director for Evidence and impact at the JRF said “A decade of cuts and freezes to benefits have left many people in our society in increasingly desperate situations, struggling to afford food, energy and basic hygiene products. Without urgent action from the government, the stark reality is that the situation could get much worse” [1].

 

Benefits increased by 3.1% in April, far behind an increase in inflation expected to hit 7.7% and continue rising. As a result, households receiving benefits will see real terms cut to their income that could pull another 600,000 people into poverty.

 

Analysis carried out by the JRF shows that in eight out of ten benefits level changes between 2013 and 2022 the basic level of unemployment benefits has lost value in real terms.

 

They identify a precedence of benefit levels not keeping pace with inflation, but this latest fall represents a significant loss in value as prices continue to rise.

 

Peter Matejic said “With living costs predicted to rise further this year, it is difficult to comprehend the logic behind a choice not to act to protect the value of benefits, thereby imposing the single biggest benefit cut of its kind in fifty years. The government has chosen to weaken the incomes of the poorest at the worst possible moment”.

 

This latest blow to the incomes of the most vulnerable households comes as the cost of living is continuing to rise.

 

In March the Office for Budget Responsibility (OBR) predicted that inflation could reach a forty year high of 8.7% as wages fail to keep pace, they warn living standards are set to fall by 2.2% [2].

Additional problems have been caused by the 54% hike in energy costs introduced at the start of April, this is set to be followed by another significant rise in the Autumn. Speaking to the commons Business, Energy and Industrial Strategy committee leaders of the main energy companies warned an increase in people living in fuel poverty is inescapable [3].

 

Further pressure is being added to family budgets by the rising cost of food caused by higher costs for producers and the impact of the war in Ukraine on global supply chains.

 

Speaking on the BBC Radio 4 Sunday Morning programme ASDA chair Stuart Rose said that while retailers were, he believed, committed to “doing what we can to shield customers”, prices would inevitably rise and that many families already struggling with the cost-of-living crisis “are going to suffer” [4].

 

Across the country communities go to the polls in local elections this week, traditionally national issues cut less ice than matters such as poor road maintenance and other parochial issues. That will not be the case this time.

 

These local elections will be the first chance since 2019 for the public to express an opinion on the progress of a Johnson government that promised to level up struggling communities. A cost-of-living crisis sandwiched between a pandemic and a possible European war has thrown things significantly off track. Not least because their efforts to address all three have been slow, confused and often ineffectual.

 

This should be a boom time for Labour, they are ahead in the polls and should do well picking up seats lost in previous local elections. Yet something about them fails to convince and often even confuses voters.

 

Despite being in a position to land a killer blow on a seemingly weekly basis leader Kier Starmer pulls his punch more often than not. Preferring to rely on showing how nifty his footwork is at keeping balance on the centre ground, even though the latitude and public desire for something more challenging, even radical is evident.

 

Predicting election results is a far from exact science, what is clear though is that an election the public go into feeling antagonism towards the government and bafflement as to what alternative the opposition offers does not promise a happy outcome locally or nationally.

 

 

[1] https://www.jrf.org.uk/press/main-out-work-benefit-sees-its-biggest-drop-value-fifty-years?utm_medium=email&utm_campaign=JRF%20Newsletter%20April%202022&utm_content=JRF%20Newsletter%20April%202022+CID_acbac5f93d1bb505fef901f0abc9cbbe&utm_source=Email%20marketing%20software&utm_term=British%20silver%20coins

[2] https://obr.uk/overview-of-the-march-2022-economic-and-fiscal-outlook/

[3] https://commonslibrary.parliament.uk/economic-update-cost-of-living-has-wide-ranging-impact/?utm_source=HOC+Library+-+Research+alerts&utm_campaign=337604fbff-EMAIL_CAMPAIGN_2022_04_30_08_00&utm_medium=email&utm_term=0_a9da1c9b17-337604fbff-102538305&mc_cid=337604fbff&mc_eid=f71b05b479

[4] https://www.bbc.co.uk/news/business-61271562