Millions 'will be £50 a week worse off by the end of the decade' thanks to Tory rule

Analysis from the Policy in Practice consultancy found millions will be £50 a week worse off by the end of the decade. Almost two-thirds of them will be people in work.

While some of Britain’s seven million low-income households will be better off by 2020, the report says they will face an average loss of £40.62 a week compared with last year.

The study finds that the government’s flagship policy of introducing Universal Credit, which combines a series of benefits into a single payment, will lead to an average income loss of £11.18 per week.

Last week, MSPs debated the rollout of the new benefit, with Labour, the SNP and LibDems all backing calls for it to be halted. Citizens Advice say that some of those already receiving Universal Credit have found themselves in serious debt.

Increasing housing costs are identified as a main cause of falling real-terms income. More than two million low-paid private renters face an average loss of £38.49 a week by 2020.

For low-income private renters with three or more children, the average income loss that they face by 2020 in real terms is £67.21 a week. This compares with £30.67 for private renters without children.

The authors also say rents are rising faster in some areas than others, with housing benefit not rising to match them because of the planned Local Housing Allowance cap, which will mean the level of benefit is no longer linked to real rents.

Polly Neate, chief executive of Shelter, told the Observer: “This is the everyday experience of millions of people forced to the edge of homelessness.

“That’s why we’re calling on the government to act now, in this year’s budget, to end the freeze on housing benefit and to commit to building decent homes at affordable rents. Without this action, this is a crisis which can only get worse.”

The SNP’s Alison Thewliss said: “This new research confirms that after seven years of Tory government, many already poor families are becoming worse off, with looming inflation compounded by the Tories’ failed austerity policies and mismanagement of the economy.

“In Scotland, the SNP is bringing in a new £50 million Tackling Child Poverty Fund, introducing a Child Poverty Bill, building more social housing and spending £100m a year mitigating the Tories’ welfare cuts.

“If the Tories want to create a fairer and more equal United Kingdom then they must urgently end the benefit freeze, scrap the two-child cap on tax credits and stop targeting austerity cuts at the poorest in our society.”

During the debate on Universal Credit, Labour’s interim leader Alex Rowley told Parliament: “It is clear that the system is deeply flawed and that we must work together to address that ... no government should inflict something on its citizens that will do more damage than good.

“No government should push people further into poverty, and no government should be so arrogant as to ignore the concerns that have been raised by individuals, organisations and communities the length and breadth of our country.

“Until we find a solution to the problems that are found in Universal Credit, I urge everyone in Parliament to support the calls to halt the accelerated roll-out.”

SNP social security minister Jeane Freeman told MSPs: “In the face of all the evidence and experience north and south of the Border, there is no rationale for not pausing and fixing the system, so we are forced to conclude that the only reason must be utter contempt for the damage that is being done, arrogance about believing that it is always right, and a failure and unwillingness to admit to the sheer incompetence involved in the roll-out.”

The Department for Work and Pensions said: “This report assumes that people won’t make any attempt to change and to improve their lives.

“But our welfare reforms incentivise work and, for the first time, universal credit helps working people progress and earn more, so they can eventually stop claiming benefits altogether.”