July 2015 Budget
Briefing from RNIB
Blind and partially sighted people, like others with disabilities, are disproportionately likely to be out of work. If they are in work, they are disproportionately likely to be low paid. RNIB therefore takes a keen interest in measures that bear on low incomes, in or out of work.
National Living Wage
The proposed National Living Wage is certainly a step in the right direction. It will start next April at £7.20 per hour, rising to £9.00 per hour by 2020. This is significantly lower in real terms than the current Living Wage (£7.85 UK 2015 rate or £9.15 in London) – but its mandatory nature will greatly extend coverage.
Increased tax threshold
In principle, the proposed increase in the tax threshold should also help low-paid workers (although the gain spreads right up the income range).In practice, though, the effect at the lower end of the earnings range is limited, not only because some earn less than the existing threshold anyway, but because for many, the increase is largely offset by reductions in means-tested benefits
By increasing net pay through tax cuts, the Government will be able to reduce the amount it spends on Housing Benefit and Universal Credit. At the same time, by increasing gross pay through a National Living Wage, there will be a reduction in spending on Tax Credits. It is through these positive and constructive measures that people should be floated free, as far as possible, from means-tested in-work benefits. But at the same time, the Chancellor proposes severely to cut those benefits, which will seriously increase in-work poverty.
Moreover, the pattern of gains and losses that is likely to emerge, once the numbers have been crunched, will sharply discriminate against certain groups – notably people with children and/ or high rents. This is because wages do not take account of family structure or housing costs.
People with children and/or those who pay high rents are also the main at-risk groupsfor the benefit cap. Along with the proposed restriction of some children’s benefits to the amount payable for a maximum of two, this represents an approach that seems to see children as an expensive consumer choice, rather than young people who will grow up to become the next generation of workers. They will be needed in order to keep society functioning – including supporting tomorrow’s older people, whether the latter have individually raised children or not.
Families,whether in or out of work, with disabilities and without, who are raising children on a low income, are likely to be very uneasy at the direction of travel in this policy area.
Personal Independence Payment (PIP)
We note and welcome the fact that the rumoured taxation of Personal Independence Payment and working-age Disability Living Allowance has not materialised. We campaigned hard on this in the run-up to the Budget and many blind and partially sighted people wrote to their MPs, so we are pleased with the Chancellor’s decision not to pursue that option and to recognise that these benefits are there to help with the additional costs of disability.
Employment and Support Allowance (ESA)
We are dismayed by the announcement that the Employment and Support Allowance (ESA) rate for the Work-Related Activity Group (WRAG) is to be reduced (for new claimants) to the Jobseeker’s Allowance level – currently, at £73.10, almost £30 per week less (rates for those aged 25 and over).
Claimants in the WRAG are, by definition, preparing for the point at which they will be able to work. Most will not have reached that point and many will not reach it for some time. Some will be wrongly in the WRAG, rather than the Support Group, in the first place. This measure will push into poverty and debt many people who have no realistic escape route via an imminent job.
University Maintenance Grants
Changing university maintenance grants, designed to support lower income students, to a maintenance loan could be yet another deterrent to disabled students considering the option of higher education. Current Government plans to change Disabled Students’ Allowance have left many disabled students worried that they will not receive enough support at university in order to study effectively. Additional worries about paying back this money could dissuade potential students.
This move could further undermine Government aspirations to support more disabled people into work. For example,blind and partially sighted people often need to have the highest possible qualifications to compete for jobs against other candidates, often with lower qualifications.
All in all, the Budget has some positive aspects, but many that will be deeply worrying for blind and partially sighted and other disabled people. A positive attitude to pay is counteracted by a negative approach to the benefits upon which many depend in order to make ends meet, in or out of work.
For further information please contact Geoff Fimister:
Tel. 020 7391 3266
(m) 07743 813740
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