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Tuesday, 22 April 2014

'Perfect storm' plunges poorest into still deeper poverty, says Oxfam

Written by The Editorial Team

Almost 1.75 million of the poorest families in the UK have been made poorer by a "perfect storm" of changes to the welfare system over the last three years, a new Oxfam report claims.

The families have been hit by one or more changes including fewer council tax exemptions and the under-occupation policy or "bedroom tax", according to Multiple Cuts For The Poorest Families.

The report, produced along with the New Policy Institute (NPI), says the the worst-hit 200,000 families affected are losing out by £18 per week or £864 per year.

Mark Goldring, Oxfam's chief executive, said: "This is the latest evidence of a perfect storm blowing massive holes in the safety net which is supposed to stop people falling further into poverty.

"We are already seeing people turning to food banks and struggling with rent, council tax, childcare and travel costs to job centres.

"At a time when the five richest families in the UK have the same wealth as the bottom 20% of the population it is unacceptable that the poorest are paying such a heavy price."

According to the report families have seen an "absolute loss of income" after being hit by four changes to the welfare system, plus a below-inflation increase in welfare payments for the second successive year.

The four policies are the under-occupation penalty, the lowering of the limit on Local Housing Allowance payments to people renting private homes rather than living in social housing, the introduction of a £500-per week benefit cap and the replacement of the council tax exemption with the council tax support (CTS) discount.

The latter has seen 1.4 million families become eligible to pay council tax for the first time since 2013, having previously been deemed too poor, the report claims.

It calls on the Government to introduce an "absolute minimum" level of support that applies regardless of local authority and which is "high enough to prevent people from having to walk the breadline".

Last week a new report revealed almost a million adults and children received emergency supplies from food banks in the past year, a "shocking" rise of 163% on the previous 12 months amid rising living costs, low pay and welfare problems.

The Trussell Trust said rising numbers were turning to food banks because their incomes are "squeezed", despite signs of an economic recovery.

A record total of more than 913,000 people received three days' emergency food in the last year, with over half blaming benefit delays or changes.

The trust now has more than 400 food banks across the UK, although it is opening two a week compared with three in 2012/13.

In response to the Oxfam report, a Department of Work and Pensions spokesman said: "Britain has a strong welfare state, but for too long the system trapped those it was designed to help in a state of dependency. There's nothing kind or fair about that.

"That's why the Government is fixing the system. Work is the best route out of poverty so we're making sure it pays to work and supporting people into employment - with an extra 1.5 million people in work since 2010.

"We're making the system fair to claimants and to taxpayers, and a strong safety net remains. We spend £94 billion a year on welfare for working-age people so those on low incomes or looking for work can meet their basic needs.

"Our reforms are specifically designed to improve the lives of the poorest in our society - with three million families better off as a result of Universal Credit."

Shadow work and pensions secretary Rachel Reeves said: "Oxfam's report is further evidence that the bedroom tax has been a complete disaster.

"This cruel and unfair levy has forced thousands to rely on food banks and risks costing far more than it saves. The Government should scrap the bedroom tax. If they don't, the next Labour government will."