In this Election 2019 campaign, the main political parties are all marking the end of austerity by pledging substantial increases in public expenditure, particularly on the NHS, education and police. But what are the main parties saying about social security and welfare reform, and what will they do to increase living standards for low-income families – who have arguably have suffered most through austerity?
We now know that the benefit freeze will come to an end next year with most working-age benefits increasing by 1.7% and pensions by 3.9%. But full restoration of the average 6% cut in income that low-income families have lost as a result of the freeze doesn’t seem to be on the agenda.
The table below sets out the main welfare reform measures for the Conservative, Labour and Liberal Democrat parties:
|Policy area||Conservative||Labour||Liberal Democrat|
|General approach||Improve living standards by keeping taxes low and addressing low pay. Address cost of living pressures by delivering a ‘major package’ of measures to ensure that work always pays while protecting and supporting those who cannot work.||End ‘food bank Britain’. End poverty by guaranteeing a minimum standard of living. Tackle the structural causes of poverty and inequality.||Tackle poverty and inequality. Invest £6 billion to make the benefit system work for those who need it.|
|Universal Credit||Continue roll-out. Do more to help the most vulnerable. Continue to support the main carer in any household receiving UC.||Scrap (in time). Stop people moving on to it immediately. End sanctions and 5-week wait (introduce interim payment at two weeks). Pay fortnightly. Annual income assessments for self-employed. Pay housing element direct to landlords and child element to the primary carer. Pay childcare costs upfront.||Reduce 5-week wait to 5 days. Increase work allowances and introduce second-earner work allowance. Make UC ‘more supportive of self-employed’.|
|Two-child limit||Assume retain||Abolish||Abolish|
|Benefit cap||Assume retain||Abolish||Abolish|
|Local Housing Allowance|
Freeze has ended so assume uprate by the lower of CPI or increases in local rents.
|Link to 30th percentile of local rents.||Link to average rents in an area. Exempt homeless (and those at risk) from shared accommodation rate of LHA.|
|Bedroom tax||Assume retain||Abolish||Abolish. Introduce positive incentives to downsize.|
|Sanctions||Assume status quo||End. Ensure employment support is positive.||Replace with incentive-based scheme.|
|Sickness and disability||Reduce number of Personal Independence Payment re-assessments when a condition is unlikely to change. Publish a National Strategy for Disabled People before the end of 2020 (including ways to improve the benefit system).||Increase ESA by £30 a week for those in WRAG. Stop work capability and PiP assessments. Do all future assessments in-house. Increase level of support for children with disabilities to child tax credit level. Increase support for severely disabled people without a carer.||Increase ESA by £30 a week for those in WRAG. Replace work capability assessments with new system run by local authorities. Reinstate Independent Living Fund.|
|Other benefits||For people coming into the country from the EU, restrict access to principal benefits for 5 years. Withdraw Child Benefit for non-British children living overseas.||Pilot Universal Basic Income. Increase Carers Allowance to level of JSA.||Overhaul Bereavement Allowance.|
|Pensions||Keep triple lock. Keep Winter Fuel Payment, bus pass and other pensioner benefits as now. BBC to provide free TV licences to those aged 75+.||Keep triple lock. Leave pension age at 66. Guarantee the Winter Fuel Payment, free TV licences and free bus passes as universal benefits. Compensate women affected by increase in pension age. Uprate State Pension for those living overseas.||Keep triple lock. Compensate women affected by increase in pension age.|
|Administration||Not mentioned but arguably covered by the Spending Review which increased all Departmental budgets and provided funding for specific projects.||Replace DWP with Department for Social Security on day 1. End the ‘digital barrier’ and offer telephone, face-to- face and outreach support. Recruit 5,000 additional advisers. Restore specialist work advisers for disabled people.||Separate employment support from benefits administration. Increase spending on training and education.|
|Childcare||A new £1 billion fund to help create more high quality, affordable childcare, including before and after school and during the school holidays.||Within five years, ensure all 2, 3 and 4-year- olds have 30 hours of free preschool education per week and access to additional hours at affordable, subsidised rates staggered with incomes. Work to extend childcare provision for 1-year-olds.||Free high-quality childcare from nine months for all working parents, properly funded.|
|National Living Wage||Link to two-thirds of average earnings in 5 years. £10.50 by 2024.||£10 for all aged 16 and over, ‘rapidly’.||Establish an independent review to consult on how to set a genuine Living Wage across all sectors.|
|Other||Extend Statutory Maternity Pay from 9 to 12 months.||Establish a legal right to food.|
The Green Party
The Green Party is committed to introducing a Universal Basic Income by 2025 (£89 a week for those of working-age, £178 a week for pensioners). This means paying a set amount to all adults in the country regardless of income, with additional amounts for children and the extra cost of disability. Proponents say this would make a major contribution to ending poverty. However, it is very costly and, in order to preserve the concept of universality, it would involve paying a state-funded income to people who don’t really need it. It is also difficult to see how support for housing fits into the scheme.
Wales and Scotland
Plaid Cymru has pledged to pay an extra £35 a week to every child in low-income families, lifting 50,000 children in Wales out of poverty. The Scottish National Party says they have been doing everything possible to mitigate austerity-driven social security cuts, including using their limited devolved powers. They would support many of the measures proposed by Labour and the Liberal Democrats, including ending the two-child limit, the bedroom tax and benefit sanctions. The SNP would also support halting Universal Credit (both natural and managed migration).
The Brexit Party
The Brexit Party has issued a contract rather than a manifesto. The contract includes reforming Universal Credit which ‘needs to be revisited’. There would be a 12-month review with reforms implemented within 2 years. The Brexit Party is also committed to reviewing the position of women who are affected by changes in the State Pension age.
Interesting but not new ideas for social security
In general, the manifestos contain interesting ideas across many policy areas. But there is not a lot of new thinking about social security. The Conservatives do not want to repeat the mistake of 2017 when they included a lot of detailed policy proposals in their manifesto, some of which unravelled quickly. Therefore, they have gone for safety first. Commitments are phrased in very general terms to avoid any hostages to fortune. Also, non-specific proposals don’t need to be costed.
The Labour Party are flirting with the idea of a Universal Basic Income but say it will take time to develop (learning the lessons of Universal Credit, they say). Meanwhile, halting the roll-out of Universal Credit would leave many people in limbo and in effect would mean two systems will operate for the forseeable future. The Liberal Democrats wish to reform Universal Credit and make the system less punitive, as they see it. But it is difficult to see how the 5-week waiting period can be reduced to only 5 days.
How will the living standards for low-income households be boosted?
Of course, there are many other policies that affect living standards, such as tax, National Insurance and energy policies for example, so it is important to look at all policies in the round. Policy in Practice helps councils to understand the combined impacts of policy reforms on low-income households, recently modelling the impact on Brexit for a number of local authorities.
We recently published the outcome of several research projects which show that more and more households lack the financial resilience to absorb any sort of interruption or reduction in their income. The latest research into the financial resilience of low-income households outlines 7 factors that determine a household’s ability to cope with the transition to Universal Credit. Whether by increasing household income or reducing household expenditure, Policy in Practice believes more needs to be done to prevent such families from falling into crisis. Our recommendations include a targeted grant in place of advance payments and a two-week run-on of Child Tax Credit. We are also discussing the approach to government debt with both DWP and the Cabinet Office.
Universal Credit is the best platform to build on
Policy in Practice remains convinced that Universal Credit is the best foundation for an effective benefits system. It provides a single award, run by a single department with a single set of rules. It also improves the gains from working. But it was introduced at a time of austerity and has been tarnished by wider cuts. There has always been a strong case for making Universal Credit more generous, by increasing benefit rates for those unable to work, and to increase the gains from work. It’s disappointing that none of the major parties see this as a strong platform to campaign on. Policy in Practice supports measured proposals that improve the lives of low-income families who have borne the brunt of the austerity years.