Food bank users triple in a year as the cuts bite

The number of people who received emergency food aid rose to 346,992 in 2012-13, up from 128,697 the previous year.

In these straitened times, food banks are one of the few guaranteed growth industries. New figures released by the Trussell Trust today show that 346,992 people received a minimum of three days emergency food in 2012-13, nearly triple the number the previous year (128,697) and  a fivefold increase since the coalition came to power. 

The trust, which does not accept walk-ins (only referrals), is opening food banks at a rate of three a week and says between 400 and 650 more projects are needed to cope with expected demand, not least as a result of the cocktail of welfare cuts introduced this month, including the 1 per cent cap on benefit increases (an unprecedented real-terms cut), the 'bedroom tax' and the 10 per cent cut in council tax support. As the New Policy Institute's Adam Tinson recently reported on The Staggers, 2.6 million families are affected by at least one of the three absolute benefit cuts, and 440,000 are affected by more than one, with the latter set to lose an average of £16.90 a week. 

Number of food bank users

2008-09 25,899

2009-10 40,898

2010-11 61,468

2011-12 128,697

2012-13 346,992

Figures from the charity showed that 30 per cent using food banks over the last year were referred as a result of benefit delays and 15 per cent because of benefit cuts. 

Here's the statement from Trussell Trust executive chairman Chris Mould:

"The sheer volume of people who are turning to food banks because they can't afford food is a wake-up call to the nation that we cannot ignore the hunger on our doorstep.

"Politicians across the political spectrum urgently need to recognise the real extent of UK food poverty and create fresh policies that better address its underlying causes. This is more important than ever as the impact of the biggest reforms to the welfare state since it began start to take effect.

"Since 1 April we have already seen increasing numbers of people in crisis being sent to food banks with nowhere else to go."

Those who had received emergency help, he said, included "working people coming in on their lunch breaks, mums who are going hungry to feed children, people whose benefits have been delayed and people struggling to find enough work."

Shadow environment secretary Mary Creagh said:

"The UK is the seventh richest country in the world yet under David Cameron’s leadership, we are facing a cost of living crisis and growing epidemic of hidden hunger, with some people increasingly unable to meet their family’s basic needs.

"These shocking figures show the number of people receiving food parcels from the Trussell Trust almost trebling in a year. This incompetent Tory-led Government needs to wake up to the human cost of their failed economic policies and change course now."

When challenged on the growth of food banks by Ed Miliband at PMQs last year, David Cameron unwisely hailed their volunteers as part of "the big society", prompting Miliband to reply, in one of his best lines, "I never thought the big society was about feeding hungry children in Britain." It will be worth watching to see how Cameron responds when, as they surely will, Labour MPs put the figures to him today. 

A volunteer sorts through donations of tinned food at the headquarters of the Trussell Trust Foodbank Organisation in Salisbury. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.