, Labour’s Shadow Work
and Pensions Secretary, responding to the publication of
the Office for Budget Responsibility Welfare Trends Report,
said:
“This Report spells out the catalogue of risks that this Tory
Government poses to families’ finances.
“Whether it’s their failure to grow the economy, real-terms cuts
to social security, tax hikes, soaring economic inactivity, high
levels of fraud, or spiralling energy bills, Conservative choices
are making life harder for struggling families.
“Labour has a plan to tackle the cost of living crisis. We would
get our economy firing on all cylinders and bring forward an
Emergency Budget – including a one-off windfall tax on oil
and gas producer profits – to ease the pressure on
families.”
Ends
Notes to Editors:
- The Office for Budget Responsibility has published its
Welfare Trends Report.
Office for Budget Responsibility, Welfare Trends
Report, 24 May 2022,
https://obr.uk//docs/dlm_uploads/Welfare_trends_report_May_2022.pdf
- On economic growth, it says: “we forecast relatively
muted growth thereafter compared to each of these prior
recessions” (page 24) and “a weaker near-term growth
outlook due to persistently higher energy prices caused by the
Russian invasion of Ukraine has heightened the risk of another
recession this year” (page 10).
- On real-terms cuts to social security, it says: “Benefits
were uprated by 3.1 per cent this April – in line with last
September’s CPI – but inflation began rising rapidly just after
that and is forecast to average 8.0 per cent across fiscal year
2022-23 as a whole, meaning the real value of benefits falls by
around 5 per cent, or £12 billion in total (including pensioner
spending) this year” (page 50).
- On the costs of failing to tackle economic inactivity, it
says: “Our latest economy forecast assumes that working-age
inactivity will be 210,000 higher in the medium term as a result
of the pandemic. If this scarring were twice as large at 420,000,
working-age inactivity would be 2 per cent higher than forecast.
And if all these extra inactive people received incapacity
benefits, non-pensioner welfare spending would be £2.7 billion
(2.1 per cent) higher in 2024-25” (page 72).
- On levels of fraud within Universal Credit during the
pandemic, it says: “[there was] a spike in fraud and
error rates among new claims for UC (jumping from 9.4 to 14.5 per
cent of spending, with new claims subject to an estimated fraud
and error rate of 25.6 per cent” (page 40).
- On one of the impacts of soaring energy costs, it says:
“the pressure on household budgets this year will create a
risk of increased take-up of various benefits relative to our
forecast assumptions, as people seek alternative ways to cover
higher costs of energy and other essential items” (page
72).
