The Conservative-led Coalition Government has defended its controversial “welfare reforms” on the basis that most welfare benefit claimants are undeserving, work-shy scroungers who have been living a life of luxury funded by the hardworking tax-payer.
Back on planet earth, the Local Government Association (LGA) has done some research into who will be hit hardest by the “welfare reforms” – and it turns out it will be the lowest paid workers who will be losing out the most.
Coalition changes are due to cut £11.8 billion from the welfare budget in 2015-16 – which the governing political parties probably see as a great saving. However, the LGA has calculated that 59% of that cut will come out of 530,000 households in the UK where there is someone working – while only 41% of the cut will be paid for by cuts in benefits paid to the 1.18 million households where no one works.
This is bad news for low paid workers. It may also be bad news for their employers: the “in work” benefits the workers have been receiving have subsidised their wages, so that the employer can get away with paying as little as possible. It is also likely to be bad news for other employers, as the low paid workers cut back on spending and other employers find the market to whom they can sell the goods or services they produce is reducing.
In Tower Hamlets, thousands of households will be hit by Coalition cuts. And in our borough, the working poor are able to look out of their windows at luxury flats which are way out of their reach and at buy to let empires that are supported by vast public subsidy.
For now, Mayor Rahman has managed to cushion the blow of the Coalition cuts by finding £2.2 million to fund households in extreme hardship. This will come under pressure in future years, as the Coalition continues to knock money out of Council budgets too.