‘Ending the benefits cap much more popular than lifting the bankers bonus cap’

The Child Poverty Action Group is calling for the abolition of the benefits cap, which has been frozen for years and which will mean more families living in deep poverty amid spiralling prices. Its poll shows most support this, significantly more than support the lifting of the cap on bankers’ bonuses.

woman with empty purses

 

Over half of people [52%], including half of people who voted Conservative in 2019, want the benefit cap scrapped compared to only just over a quarter (27%) who want the cap on bankers’ bonuses to go, according to new polling from Child Poverty Action Group.

Just 34% of Conservaties want the benefit cap to stay. The poll comes as figures from the Government show 110,000 families were subject to the benefit cap in May, up 7,000 since February, and will be worse off as prices rise as the benefits they get will not rise. Most families who are capped (52%) have a child aged under five and almost a quarter (23%) have a child under two.

The cap, which has been frozen since 2016, limits the amount of benefits that non-working or low-earning households can receive to £383 a week for households outside London, and £442 a week for those in London.  The CPAG says almost all (94 per cent) households affected by it are only capped because of the failure to uprate the cap with inflation.

The CPAG says the cap affects 330,000 children and that 69% of all capped households are single-parent families, with 18% being couple-parent families.

The estimated average monthly amount of Universal Credit lost due to the cap is £246 for households which contain children. But some lose out on far more – the CPAG estimates that 26% of capped households with children lose out on over £325 a month. Six per cent lose out on £650 a month.

Previous governments have claimed that the cap is intended to incentivise employment or increased working hours, but the CPAG says initial evidence suggests that it has had a very small impact on employment, for instance, it states that single parents cannot increase hours due to childcare costs.

The CPAG’s analysis shows households subject to the cap will, from next April, be £65 a week worse off than they would be if they were not capped unless the cap is uprated. That includes those already capped and 35,000 households who will be newly capped.

The CPAG, which is calling for the cap to be removed, says its removal would cost £500 million – 0.2 per cent of total spending on social security.

It adds that if the cap had been increased in line with inflation from its implementation, in 2023/24 it would be £640 a week, £200 a week higher that it is now in London and £260 a week higher outside of London.

The CPAG’s chief executive Alison Garnham said: “The benefit cap is cruel and irrational at the best of times – many parents subject to it can’t escape it by working more because they are caring for very young children and housing costs are completely out of their control. But in the current crisis its effects will be truly catastrophic for hundreds of thousands of children, pushing many into deep poverty. It is early days for the new government and scrapping the cap would send a clear signal to families that the PM is on their side – there can be no doubt that leaving it in place will damage the lives of children up and down the country.   It must be abolished before it harms more children.”

Meanwhile, a recent report by The Living Wage Foundation has said that more than half of the UK’s lowest-paid workers have used a food bank in the past year, with a significant increase in the number visiting in recent months, while four out of five workers believe the cost of living crisis is the worst financial period they have experienced.

A survey for the Foundation found that almost half of low-paid workers regularly skip meals, while almost a third cannot afford to heat their homes, and almost a quarter of all workers have turned to payday loans. The survey comes amid concerns about the impact of Monday’s bank holiday on lower paid workers, particularly zero hours workers who won’t get paid if their employer closes down for the day. Many parents whose employment will be open are also likely to struggle with finding childcare as schools and nurseries close.

The Chancellor Kwasi Kwarteng is reported to be looking to remove a bonus cap which restricts banking executives’ pay in his mini-budget this week. The cap limits bankers’ pay at twice their annual salary and was brought in as part of EU-wide efforts after the financial crisis. Kwarteng is said to want to attract European bankers, make the City more competitive and deliver a post-Brexit shake-up of regulations.



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