Bishop of Durham asks about impact of cost of living increase and benefits freeze on families

On 2nd November 2017 the Bishop of Durham, Rt Revd Paul Butler, received two written answers to questions about income related benefits:

The Lord Bishop of Durham:

(i) To ask Her Majesty’s Government what is their assessment of the impact of the changing cost of living on incomes, particularly for those in receipt of income-related benefits.

(ii) To ask Her Majesty’s Government what is their assessment of the impact that the four-year freeze on income-related benefits will have on family budgets in England and Wales.


(i) Baroness Buscombe: The Office for Budget Responsibility (OBR) forecasts rates of inflation (through the Consumer Price Index) and average earnings known as the OBR Historical Official Forecasts database. A copy of this is attached.

Using figures published in the OBR Historical Official Forecasts Database, we note that between 2018 and 2021 earnings growth is forecasted to be consistently higher than inflation.

Our welfare reforms to working-age benefits are part of the Government’s commitment to incentivise work as the best route out of poverty and support working families. This includes the introduction of the National Living Wage and cutting income tax for over 30 million people. For those in a position to work, earnings provide the best opportunity for income progression. Further, benefits for the additional cost of disability and benefits for pensioners continue to be uprated, as we are committed to supporting the most vulnerable groups.


(ii) Baroness Buscombe: The Welfare Reform and Work Act 2016 has frozen the majority of working-age benefits for four tax years, from 2016-17 to 2019-20. The analysis published at the time of the 2015 Budget assesses the impact of the measures in the Welfare Reform and Work Act 2016. 30 per cent of households were estimated to be impacted by the benefit rate freeze. The average notional loss was estimated to be £6 a week in 2019/20. This analysis does not take into account employment effects in response to our welfare reforms. I attach the analysis to this response.


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