Benefits freeze warning

The Children’s Society is warning that from April the freeze will hit almost 500,000 low-income families across the North West.

It risks pushing many more children into poverty over the next four years as living costs rise.

Two thirds of the families affected on the Fylde coast live in working households who receive benefits to top-up low pay.

The charity believes the freeze will affect 15,000 working families across Blackpool, Fylde and Wyre, and some 7,500 families where neither parent works.

Freezing Child Tax Credits, Working Tax Credits and Job Seekers’ Allowance – rather than raising them in line with living costs – could see affected families losing up to 12 per cent from the real value of their benefits and tax credits by 2020, said the charity.

The freeze forms part of the Welfare Reform and Work Bill, which was debated in Parliament on Tuesday.

Ahead of the debate, and ahead of next month’s Budget, the charity urged the Government to reconsider its plan to freeze benefits and agree to a moratorium on further cuts in support for low-income families.

Rob Jackson, area director for The Children’s Society in the North West, said: “Families on low incomes across the North West are facing a barrage of cuts.

“If ministers are genuinely concerned about child poverty they must reconsider plans to freeze benefits over the next four years.

“At the very least, the Government needs to guarantee there will be no further cuts when the Chancellor delivers his Budget next month.

“Austerity has hit families hard, including those in work. Further cuts to support would push more children into poverty and undermine incentives for families to move into work or earn more.”

In Blackpool, the charity estimates 8,000 working families, including 13,800 children, will be affected. Including those out of work, the figures rise to 12,800 families and 22,900 children.

In neighbouring Fylde, 2,700 working families and 4,800 children will be hit buy the freeze; some 3,600 families and 6,400 children in total.

And in Wyre, 4,300 working families and 7,700 children – 6,100 families and 11,000 children in total – will also be hit by the freeze.

Research by the End Child Poverty coalition shows 28 per cent of children in the UK live in poverty – and that nearly two thirds of children in poverty live in working households.

The Children’s Society’s briefing, The Future of Family Incomes: How key tax and welfare changes will affect families to 2020, reveals fthe collective impact of a range of welfare, tax and benefit measures announced.

While some changes, such as the introduction of a higher minimum wage, might increase household incomes by 2020, others will cancel out any gains

Planned changes that threaten to make life harder for struggling families, aside from the benefits freeze, include limiting Child Tax Credits to a family’s first two children and scrapping the family element of Child Tax Credit. In addition, Universal Credit claimants may receive less support than they might have under other benefits.

Young parents and families with disabled children claiming Universal Credit for the first time are particularly likely to lose out.