Osborne’s new social security spending cap ‘will increase disability poverty’

A controversial budget measure is set to increase even further the number of disabled people living in poverty.

The Conservative chancellor, George Osborne, announced last week that a new cap on social security spending would be set at £119.5 billion in 2015-16, and would then rise with inflation to reach an expected £126.7 billion in 2018-19.

Spending on the state pension – which makes up nearly half of total social security spending – will be exempt from the cap, as will jobseeker’s allowance, but disability living allowance, attendance allowance, personal independence payment and employment and support allowance will all be included.

Only 22 MPs – including a handful of Labour rebels – voted against the cap when it was debated this week.

The number of disabled people in “absolute” poverty rose by 100,000 during the coalition’s second year in office, figures obtained by Disability News Service (DNS) showed last year.

In 2010-11, there were 3.6 million disabled people in absolute poverty. By 2011-12, this had risen to 3.7 million.

Because the proportion of disabled people in the population is rising due to demographic factors, a spending cap on total social security spending is almost certain to lead to more disabled people living in poverty.

There is likely to be a rise in both relative poverty (those disabled people who are poor in comparison with the general population) and absolute poverty (disabled people who do not have enough income to meet their basic needs).

The number and proportion of disabled people in relative poverty is also likely to rise, as disability benefits will almost certainly increase at a lower rate than average wages, with disabled people more likely to receive benefits affected by the cap than non-disabled people.

John McArdle, a founding member of the user-led grassroots campaign group Black Triangle, said: “You cannot put a cap on people’s sickness and disability, so how can you cap the support which disabled people require?

“Poor, sick and disabled people, who are the victims of the bankers’ crisis, are yet again being singled out by all the main parties at Westminster to shoulder the burden.

“As a Scottish campaign, we can only say that this will be catastrophic for the Better Together campaign [which rejects calls for Scottish independence] as more and more Labour voters flock to this campaign [for independence] as the only way to deliver a just and fair society in Scotland.”

A Treasury spokesman said he “wouldn’t agree” that the cap would inevitably lead to an increase in relative poverty for disabled people due to their benefits rising at a slower rate than average wages.

He insisted that any such talk was “pure speculation based on assumption and assertion”, and it had already been the government’s policy for “some time” to increase benefits only by inflation, and more recently to limit the annual rise in many benefits to just one per cent.

But challenged on whether demographic factors would cause poverty among disabled people to rise because of the increase in the proportion of disabled people in the population, he declined to comment, other than to say: “The government believes the best way out of poverty is through work and therefore that is how the government responds to it.”

If the government wants to change the level of the social security spending cap, there will have to be a Commons debate and vote, led by the work and pensions secretary. There will also be a debate and vote if the government breaches the cap.

The Department for Work and Pensions refused to answer questions about the impact of the spending cap on disability poverty, but instead produced a statement claiming that its reforms would “improve the lives of some of the poorest families in our communities by promoting work and helping people to lift themselves out of poverty”.

27 March 2014