The UK government is facing widespread condemnation after announcing a £1.7 billion real-terms cut to benefits while simultaneously implementing tax reductions in what critics are calling a deliberate attack on the nation's poorest households.
The Chancellor's Controversial Calculations
In his autumn statement delivered on Wednesday, Chancellor Jeremy Hunt confirmed he would not use the September inflation figure of 2.5% to uprate benefits, instead opting for the lower October rate of 1.7%. This technical decision has substantial real-world consequences, reducing the value of working-age benefits and tax credits by approximately £1.7 billion compared to what recipients would have received.
This move comes alongside a 2p cut to National Insurance, costing the Treasury around £9 billion annually. The contrasting policies have ignited fierce debate about the government's priorities and who truly benefits from their economic strategy.
Paul Nowak, general secretary of the Trades Union Congress (TUC), did not mince words, stating the government had "declared war on the poor" by making a political choice to fund tax cuts through reductions to the social safety net.
Charities Sound Alarm on Deepening Poverty
Leading poverty charities have expressed profound concern about the impact these changes will have on vulnerable families already struggling with the ongoing cost of living crisis.
Alison Garnham, chief executive of Child Poverty Action Group, highlighted the human cost behind the statistics, noting that "the chancellor is cutting benefits for 9 million families with children" while offering tax cuts that disproportionately benefit wealthier households.
The Joseph Rowntree Foundation echoed these concerns, pointing out that the government's decision means low-income families will be £500 worse off on average next year. This comes at a time when food bank usage remains at record highs and energy costs continue to strain household budgets.
Political Fallout and Government Defence
The opposition Labour party has seized upon the controversy, with shadow work and pensions secretary Liz Kendall accusing the government of "making the poorest pay for the failures of the Conservatives" and undermining the fundamental principle of the welfare system.
Meanwhile, government ministers have defended their approach, arguing that the National Insurance cuts will put more money in workers' pockets and stimulate economic growth. They maintain that the benefits system remains generous and that their policies are designed to encourage employment.
However, analysis from the Institute for Fiscal Studies suggests the overall package disproportionately benefits higher earners, with those on modest incomes seeing minimal gains from tax cuts while facing significant reductions in benefit payments.
As the political battle intensifies, millions of low-income households across Britain face the prospect of a more financially precarious 2025, with essential support failing to keep pace with the actual cost of living.
