Deficits and Benefits

Because of the economic difficulties the government has extended the period during which it is aiming to reduce the structural deficit. This, however, has required the finding of additional saving.

Although I pressed for the full inflation increase on all benefits last year I did support the new Welfare bill which limits the increase to 1%. That is because we cannot expect the Welfare budget to be immune to savings. If we do not have a general limit on benefits then any specific targeted changes would have to be much more.

The proposal is to increase by inflation those benefits that specifically relate to disability, but to hold other state payments to the same figure as applies to public sector workers (viz 1%).

It is worth noting that there has been a 100% reduction on child benefit for families with earners earning over £60,000 (the only benefit available to such families)

In the mean time Labour seem to want to tax people on benefits in Birmingham. This, however, is not the same in other local authority areas. They have also refused to apply for the grant which would stop them taxing people on benefits.