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UKclosedI can’t say for sure that you saw it here first, but I’ll state it plainly: The government’s below-inflation benefits increase, coupled with the changes it is already bringing in, will break Britain’s economy altogether.

Companies up and down the UK will go out of business and nobody will take over from them. The cuts mean £40 billion will be removed from the economy this year – and, with no coherent plan to invest in jobs and growth, this means trouble for everyone. Even the fat cats who think they’re insulated.

I have covered the evidence in my previous few articles. The fact is that the working poor and those on benefits underpin the British economy. Without them, it cannot function. They spend most, if not all, of the money they receive, rather than seeding it away in banks or foreign tax havens, like the big businesspeople the government of millionaires has done so little to curb.

But benefits and wages are being cut, in real terms. Many people will find it hard to hold onto their homes because of the bedroom tax, cuts in housing benefit to meet the demands of the benefits cap, and increases in tax bills because Council Tax Benefit is to stop. Those buildings will remain empty because people will not be able to afford the cost of moving in. We will have legions of homeless people shuffling through one ghost town after another.

Malnourishment will increase. The average cost of groceries has risen by 17 per cent in the last two and a half years. No wonder our children have rickets.

So sickness and disability will increase – but those claiming disability benefits are among the most persecuted in this country, with the last recorded figure showing an average of 73 deaths every week in this part of society.

All because greedy private employers don’t want to pay their workforce enough money to cover their outgoings.

Sickening, isn’t it? People whose incomes have risen by more than 800 per cent over the past 30 years begrudge the 27 per cent rise their workers have had in the same time, and want to push those wages down still further.

That is why the Benefits Uprating Bill is going through Parliament. That is why Iain Duncan Smith is pushing through his punitive changes to the social security system – to create insecurity. Because people who fear that their jobs might be taken by somebody else are less likely to ask for a raise.

That is why our nearly-1,000-year-old civilisation is about to land on its arse.

If you think I’m overstating matters, think again. The UK economy contracted by 0.3 per cent in the last three months of 2012, according to the National Institute of Economic and Social Research (NIESR). And the figures relating to the government’s changes were reeled out during the debate on the Benefits Uprating Bill by the following MPs.

“We have to ask ourselves whether we want to continue to support a situation in which private employers in particular do not want to pay a living wage to the staff that they employ in order to make profits,” said Ian Mearns.

“Since this Government took office, the cost of the average weekly shopping basket has risen by 17 per cent.” (Michael McCann)

“People on low incomes tend to spend locally and to spend all their money. The Welsh economy is overwhelmingly made up of small businesses… Working tax credit reductions will suck demand out of local economies and make matters even more difficult for small businesses struggling to survive in the recession.” (Hywel Williams)

“It is estimated—the IMF is the source — that these benefit cuts will contribute to a £40 billion reduction in the country’s output when we desperately need the opposite to happen.” (Steve McCabe)

“The Treasury confirmed that the working tax credit lost in 2013-14 by people who are working full time on the minimum wage, due to the Government’s freezes and the increase in the earnings taper, will be £475 for a single person with no children and £660 for a couple with one child. Contrary to the assertions made in Parliament, the amount of working tax credit lost by families with one earner on the minimum wage will be greater than their saving of £420 in 2013-14 from the increase in the personal tax allowance.” (Yvonne Fovargue)

“The more people there are taking cuts to their tax credits and take-home pay, the fewer people there are spending in local economies. In an area such as mine, where there is a high proportion of small businesses that employ many people from the local area, that is devastating.” (Lisa Nandy)

“The policy is not only unfair but economically inept. As many have pointed out, people on the lowest incomes spend their money in local economies, and the last thing that we need is a further contraction in demand in local economies.” (Nic Dakin)

And Julie Hilling said: “The IMF has already warned the Government that their annual cut of £24 billion to benefits and tax credits will reduce economic output by up to £40 billion. Not only are they heartless; they are incompetent too.

“The way to get down the benefits bill is to get people into decently-paid work. By already having a double-dip recession and heading for a triple dip, the Government have demonstrated that we cannot cut our way out of a recession — we have to grow our way out.

“Punishing the poor and bringing them to desperation will not grow the economy; it will simply make it worse.”