Gordon Brown has urged Jeremy Hunt to take action on surprising new research into Britain’s threadbare benefits system, which found the poorest families have to spend an average of 63p per pound to meet basic food and energy needs.
The former prime minister said the paper was a “wake-up call” for the chancellor, which “reveals the arithmetic of poverty” and forces Britain to “face up to the fact that the country is in the grip of a crisis”.
The research shows how a married couple with benefits and two children must spend almost 50% more of their income on food and energy than in 2012, when that was still 46 cents. This is due to the steep decline in the real value of benefits. The equivalent expenditure of an average British family is roughly 20p per pound earned, the report said.
Brown said the Chancellor should use his March 6 Budget to “deliver deep reform of the benefits system” to prevent further impoverishment of Britain’s poorest children.
On Thursday, Hunt gave the biggest hint yet that he plans to deliver a major tax road in his next budget ahead of this year’s general election. He was speaking at the World Economic Forum in Davos, an annual gathering at a Swiss ski resort frequented by billionaires and politicians.
Prof Donald Hirsch’s unpublished briefing paper, entitled The UK’s Inadequate and Unfair Safety Net, concludes that the UK benefits system no longer provides the basic amount needed “to function from day to day and live a healthy life”.
He added that the need to balance competitive basic costs – such as clothing, toiletries and transport – meant that spending on food and energy by the poorest households was likely to be inadequate, leading to serious health consequences for families . Even if they cut back on basic items, other essentials would be unaffordable, the Financial Fairness Trust research concluded.
The gap is even greater for single people on benefits. In 2012, minimum basic food and energy costs ate up 73% of their weekly income, while in 2023 these costs exceeded their benefits by 22%, leaving them unable to afford to eat well, let alone clothes, toiletries and transportation to be paid. cost.
Hirsch wrote: “The level of working age benefits in Britain denies claimants access to the most basic material resources needed to function from day to day and lead healthy lives.”
He added: “The UK benefits system has always had its shortcomings, with benefit rates unrelated to evidence of need, serious obstacles and delays in administration and some people falling through the net of income protection it tries to provide .
“But today, all of these features have become so ubiquitous that the benefits fall woefully and systematically short of protecting citizens from difficult times.”
Speaking to the Guardian, Brown said: “Britain must face the fact that the country is in the grip of a poverty crisis. Donald Hirsch’s important and groundbreaking research reveals the arithmetic of poverty and shows why so many families can no longer make ends meet on benefits.
“It is a fact-based wake-up call for the Chancellor to use his March budget to implement deep reform of the benefits system.”
The examination of the inadequacy of the benefit system takes place against the backdrop of an alarming growth in the number of households facing deep poverty. Last year, more than 1 million children in Britain experienced poverty, meaning their families could not afford to adequately feed, clothe, clean or keep them warm.
Working-age benefits have fallen to 13% below their 2009 peak, and their real value fell most dramatically when the government froze benefit levels between 2016 and 2019. But this has been exacerbated by holes in the safety net that mean most benefit recipients now receive even less money than they are entitled to.
These include the bedroom tax, the two-child limit and benefit cap, and deductions used to repay loan advances to universal credit claimants waiting five weeks for a first payment.
“These holes in the safety net are so large that receiving full rights has become the exception rather than the rule,” Hirsch writes.
He called for a review of the current system to ensure it provided a “fair and reliable” safety net, by setting up a government taskforce along the lines of the 2005 Turner Commission, which established the principle that pensions should at least would increase in line with revenues.
Hirsch calculated the cost of food by adjusting publicly agreed-upon minimum income standards, which agree on how much is needed to fund a modest, nutritionally adequate diet. His calculations do not include alcohol and eating out.
Writing in the Mail on Sunday, Hunt again signaled his desire to see tax cuts in the next budget, comparing himself to former tax cuts chancellor Nigel Lawson.
Hunt said: “Just as Nigel Lawson positioned the City of London for the financial boom of the 1980s, this period of Conservative government has positioned Britain for the huge technology boom we will see in the coming years. ”
Speaking in Davos on Thursday, he said: “In terms of the direction of travel, we look around the world and note that the economies in North America and Asia that are growing faster than us tend to have lower taxes, and I believe that in essentially low. -Tax economies are more dynamic, competitive and generate more money for public services such as the NHS.
“That is the direction we would like to take, but it is still too early to say what we will do.”
A Department for Work and Pensions spokesperson said: “The best thing we can do to help those who are struggling is to put money back in people’s pockets. That’s why we cut taxes and cut inflation by more than half, while providing support to those who need it most.
“We continue to help families with living costs support worth an average of £3,700 per household, including a 6.7% increase in benefits in April.”