Category: Budget

The budget will not alleviate inequality, poverty and hardship that government policies have created

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Watch Jeremy Corbyn’s excellent response to the budget, while facing the braying, sneering, smirking government. 

Hammond is economical with copies of the Budget 

The Labour party have accused the chancellor Philip Hammond of breaking the ministerial code after opposition parties were not given a copy of the budget in advance. The code states that when a minister makes a statement to MPs in the Commons “a copy of the text of an oral statement should usually be shown to the opposition shortly before it is made”. The rules are that 15 copies and associated documents should be sent to the chief whip’s office at least 45 minutes before a statement. The government have frequently flouted these rules, prefering to follow the rampant authoritarianism protocol of avoiding scrutiny, transparency and above all, democratic accountability

However, a Treasury source claims that there was ‘no official rule’ that other parties should get an early look at budget measures. “We did not do anything differently from what we have been doing for the past 20 years,” the source said. I half expected him to add that the Ministerial Code isn’t really a code, but more a kind of ‘loose guideline’. 

The opposition is said to be considering a formal complaint. 

Austerity has not ended

Jeremy Corbyn accused the government of a U-turn on Theresa May’s party conference pledge that austerity was over. Hammond told MPs that austerity was “coming to an end”. The Labour leader replied: “The prime minister pledged austerity is over. This is a broken promises budget. What we’ve heard today are half measures and quick fixes while austerity grinds on.”

The Labour party also criticised income tax cuts, which it said would favour the better off and said there were no guarantees that government departments would not face further cuts. The Resolution Foundation have also concluded the same. 

Government rattles the Office for Budget Responsibility

The Office for Budget Responsibility (OBR), whose role, unsuprisingly, is to scrutinise the budget are also disgruntled because the government only handed over the final Budget policy measures on 25 October, a day late. This means the OBR hasn’t been able to check that the government’s sums actually add up.

The precise changes to universal credit came too late for the OBR to assess them properly, too. The budget red book says that the roll-out of universal credit is now scheduled to end in December 2023. It says:

In response to feedback on universal credit, the implementation schedule has been updated: it will begin in July 2019, as planned, but will end in December 2023.

But until recently, as this House of Commons library briefing (pdf) reveals, the roll-out was due to end in March 2023.

Officially the government says that, if the UK had to leave the EU with no deal, it could manage. But the OBR doesn’t share this view:

A disorderly one [Brexit] could have severe short-term implications for the economy, the exchange rate, asset prices and the public finances. The scale would be very hard to predict, given the lack of precedent.

The Press Association (PA) reports that the Labour leader said eight years of austerity has “damaged our economy” and delayed the recovery, adding the government has not abandoned the policy despite the chancellor’s latest spending pledges. The PA says:

Leading the response to the budget, Corbyn also said the proposals announced will “not undo the damage done” by the squeeze on spending.

He told the Commons: “The prime minister pledged austerity was over – this is a broken promise budget.

“What we’ve heard today are half measures and quick fixes while austerity grinds on.

“And far from people’s hard work and sacrifices having paid off, as the chancellor claims, this government has frittered it away in ideological tax cuts to the richest in our society.”

Corbyn added: “The government claims austerity has worked so now they can end it.

“That is absolutely the opposite of the truth – austerity needs to end because it has failed.”

Corbyn later said the “precious” NHS is a “thermometer of the wellbeing of our society”, adding: “But the illness is austerity – cuts to social care, failure to invest in housing and slashing of real social security.

“It has one inevitable consequence – people’s health has got worse and demands on the National Health Service have increased.”

Corbyn also condemned the “horrific and vile antisemitic and racist attack” in Pittsburgh, noting: “We stand together with those under threat from the far-right, wherever it may be, anywhere on this planet.”

The Labour leader criticised pay levels for public sector workers, adding: “Every public sector worker deserves a decent pay rise, but 60% of teachers are not getting it – neither are the police nor the Government’s own civil service workers.”

The economy is also being damaged by a “shambolic Brexit”, Corbyn added.”

Elements of the budget have revealed a Conservative party in ideological retreat. One of Jeremy Corbyn’s greatest achievements as leader of the opposition is the undermining of the neoliberal hegemony and his presentation of an alternative narrative and economic strategy. Personally I am glad that neocon neoliberal Francis Fukuyama didn’t get the last word after all. 

Over the last couple of years, the government have imported policy ideas and adopted rhetoric from the Labour party to use as strategic window dressing. Hammond announced an end to the government signing off on much-loathed private finance initiative contracts – something Corbyn had already promised. As a former Treasury advisor noted:

Originally introduced by John Major, and continued under New Labour, PFIs are essentially a way for the state to finance and then look after new infrastructure. The traditional way for the government to build a new piece of infrastructure, such as a hospital, a school, or a new road bypass, was to raise the money in taxes, or borrow it from the bond markets, and then pay builders to deliver the project. After that, the public sector would own the asset. 

The theoretical justification for Private Finance Initiatives (PFI) is that the private sector is more efficient at delivering and managing infrastructure projects than civil servants. PFI also supposedly transfers the financial risk of a construction project over-running from the public to the private sector. However earlier this year, the National Audit Office (NAO), released a new report which highlighted a lack of evidence that PFIs offer value for money for taxpayers.

The report followed the collapse of the construction and services firm Carillion which has shone a bright spotlight on the flawed process of  state contracting and outsourcing.

According to the Treasury data there are 716  PFI projects (of which 686 are operational) with a capital value of just under £60bn. Of this total the Department of Health was responsible for £13bn, the Ministry of Defence £9.5bn and the Department of Education £8.6bn.

Hammond pledged a tax crackdown with a UK “digital services tax”, aimed only at multimillion companies rather than startup businesses. On universal credit, the government attempted to neutralise the toxic issues with an extra £1bn to ‘ease issues with its rollout.’

But Hammond’s generous tax cuts to the very wealthiest households indicate that this is still very much a government for the few, not the many. 

Alison Garnham, chief executive of the Child Poverty Action Group, commented:

The work allowance increase is unequivocally good news for families receiving universal credit but a bigger salvage operation is still needed for the benefit. And bringing forward higher tax allowances – which will cost much more than the universal credit change – will mainly benefit the richest half of the population. We look forward to hearing more detail on how the secretary of state will use the extra £1bn to ease the migration of people on existing benefits to universal credit.

This is crunch time for universal credit. We hope the chancellor’s positive announcements on work allowances will be followed by a pause in the roll-out to allow for a fundamental review of its design and, crucially, for a commitment to restoring all the money that’s been taken out of universal credit.

Final comment:

 

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Wealthiest tenth of households are ‘overwhelmingly’ the biggest beneficiaries of Hammond’s budget tax cuts

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Image result for Philip hammond rewards for the wealthy

The Resolution Foundation is a non-partisan think tank that works to improve the living standards of those in Britain on low to middle incomes.

The foundation’s initial comments on Hammond’s budget: 

The big print giveth and the small print taketh away.

Torsten Bell, director of the Resolution Foundation, says about the budget:

“In today’s budget, the chancellor has significantly eased – but not ended – austerity for public services. However, tough times are far from over.

The chancellor has set out plans to spend almost all of a very significant fiscal windfall on extra spending for the NHS, bringing to a close the era of falling overall public service spending. But unprotected departments are still on course for spending cuts into the 2020s – averaging 3% between 2019 and 2023.

The chancellor has also delivered a welcome boost to [‘hard working’] families on universal credit worth £630 a year.” 

Tomorrow the Resolution Foundation and the Institute for Fiscal Studies will both be publishing detailed assessments of the budget. I will be scrutinising these and commenting on them.

Jeremy Corbyn’s verdict:

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The uncouth and uncaring Conservative Party’s budget

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After trying to address a rudely interrupting, unhearing, unfeeling, jeering and sneering Conservative party to deliver his response to the budget today, Jeremy Corbyn called the government “uncouth” and “uncaring” in a passionate speech, with barely constrained anger at how Conservatives’ policies are creating hardship and suffering for some of our most vulnerable citizens. A Conservative had made an inappropriate and ageist comment about Corbyn’s age, while he was addressing the Conservatives’ brutal cuts to social care.  

Corbyn spoke in defence of those elderly people suffering cuts in care budgets. It has been alleged that Conservative Party whip Andrew Griffiths – hiding out of sight of the Speaker’s chair – said the Labour leader should “be in a care home” himself.

Many of us have also used those words among others – uncouth and uncaring – many times over the past seven years to describe a government that laughed when hearing about people suffering because of their policies, laughed at the accounts of those suffering hardships because of the impact of the bedroom tax, laughed at the misery of those having to visit food banks. This is the same government that has stripped our public services bare, presided over falling and stagnating wages and huge hikes in the cost of living, removed lifeline support from ill and disabled people, stripping them of the means of meeting their basic needs, their independence and dignity, and savagely reducing funding to our local authorities, and essential public services such as health and social care. 

As Labour MP Laura Pidcock says: “It was absolutely right to be angry at the attitude of members on the benches opposite – shouting him down when he’s talking about serious issues, like the lack of social care services as a result of massive cuts (£6 billion) to budgets. This neglect, these holes in our safety net for vulnerable people, hurt people in reality. It is not a game.”

We have seen, over the last 7 years, the Conservatives’ authoritarianism embedded in punitive policies, in a failure to observe the basic human rights of some social groups, in their lack of accountability and diffusion of responsibility for the consequences of their draconian policies, and in their lack of democratic engagement with the opposition. Hurling personal insults, sneering and shouting over critics has become normalised by the Conservatives. They don’t debate, they simply attack on a personal level. This is not the standard and quality of debate that the public expect. Yet people don’t recoil any more from what has often been dreadfully unreasonable hectoring and terribly poor decorum. But they reallty ought to.

The budget details – pretty much more of the same

Philip Hammond finally faced up to the problem of “slower growth than predicted.” What a pity he didn’t have the balls to own the REASONS for that, which are chiefly linked to the seven year long economically inept, miserly austerity programme, aimed solely at ordinary people, especially the poorest citizens, and the deluxe “incentivisation” package designed to overindulge the hoarding wealthy.

The nations’ redistributed wealth simply trickles offshore, as we have discovered.

Those of us opposing the implicit “trickle down” philosophy of the government have won this debate several times over. Yet still the Tories persist in peddling magical thinking and neoliberal mythologies. The budget is simply more of the same economic ineptitude.

The answer to failing neoliberism is apparently more neoliberalism. It’s a budget of more of the same. 

The Office for Budget Responsibility (OBR) has presented a rather grim picture, slashing an average of 0.7% percentage points off UK trend productivity growth each year. That means the economy will be at least 3% smaller in 2020 than previously expected, leading to the sharp growth downgrade.  It’s another sign that the UK economy is weaker than we were led to believe by the bumbling government, who are not delivering the “robust” growth that policymakers have claimed. 

From the Institute for Fiscal Studies (IFS)

The OBR has also revised up its expected mortality rate. It’s now expected that 502,000 pensioners will die each year, up from 476,000 previously. 

The OBR says:

“This is consistent with life expectancy increasing less than projected since mid-2014. By 2022, the population in this age group [adults aged above the state pension age] is 1.2% lower than previously assumed.” 

What this means is that our life expectancy is falling, which is shameful in a developed and wealthy nation. 

Here is the response to the budget from John McDonnell, the shadow chancellor. And here is an excerpt:

“This is a ‘nothing has changed’ budget from an out-of-touch Government with no idea of the reality of people’s lives and no plan to improve them.

Philip Hammond has completely failed to recognise the scale of the emergency in our public services.

Today’s budget has found no meaningful funding for our schools still facing their first real terms funding cuts since the mid-90s and nothing even approaching the scale needed to address the crisis in our NHS or local government.”

Corbyn has also condemned Philip Hammond’s second Budget as Chancellor, saying that it demonstrates a “record of failure with a forecast of more to come”.  

The Labour leader, who was not provided with an advance sight of Hammond’s Budget, criticised the Government for repeatedly pushing back its target to eliminate Britain’s deficit, now it’s not likely to be “paid down” until at least 2030. If ever. I don’t think the Conservatives care about the deficit. They are rather more interested in privatising public services, and taking money from the poorest to hand out to the wealthiest. Their policies are not practical, they are simply ideological, revealing the very worst of their own traditional prejudices.

Corbyn said that 120,000 children would spend this Christmas living in temporary accommodation, he said: “Three new pilot schemes for rough sleepers simply doesn’t cut it.

“It’s a disaster for those people sleeping on our streets, forced to beg for the money for a night shelter,” he added. “They’re looking for action now from government to give them a roof over their heads.” 

Corbyn also cited cuts to police officer numbers and rising levels of in-work poverty. He also criticised the Government for failing to take action to tackle credit card debt.

He said: “Debt is being racked up because the Government is weak on those who exploit people, such as rail companies hiking up fares above inflation year on year, and water companies and energy suppliers.” 

The Labour party leader also criticised the Government’s measures on housing, saying very little was mentioned about the private rented sector – even though landlords were paid £10bn in housing benefit.

“With this Government delivering the worst rate of house building since the 1920s and 250,000 fewer council homes, any commitment would be welcome,” he said.

“But we’ve been here before. The Government promised 200,000 starter homes three years ago. Not a single one has yet been built in those three years.

“We need a large scale publicly funded house-building programme, not this Government’s accounting tricks and empty promises.” 

Concluding his speech, Corbyn said: “We were promised with lots of hype a revolutionary Budget, the reality is nothing has changed.

 

You can watch Corbyn’s speech in full here

Here is a transcript of the core parts of his speech:

Mr Deputy Speaker, this Budget has been an advertisement for just how out-of-touch this government is with the reality of people’s lives. 
 
Pay is now lower for most people than it was in 2010 and wages are now falling again.

Economic growth in the first three quarters of this year is the lowest since 2009 and the slowest of the major economies in the G7.

It’s a record of failure with a forecast of more. Economic growth has been revised down. Productivity growth has been revised down. Business investment revised down.

People’s wages and living standards revised down. What sort of “strong economy, fit for the future” is that?

The deficit was due to be eradicated by 2015, then 2016, then 2017, then 2020 and now 2025. They’re missing their major targets but the failed and damaging policy of austerity remains.

The number of people sleeping rough has doubled since 2010 and 120,000 children will spend this Christmas in temporary accommodation. In some parts of the country life expectancy is actually starting to fall.

The last Labour government lifted a million children out of poverty. Under this government an extra 1 million children will be plunged into poverty by the end of this Parliament. 1.9 million pensioners and one in six are living in poverty – the worst rate in Western Europe.

Falling pay, slow growth, and rising poverty. This is what the Chancellor has the barefaced cheek to call a “strong economy”.

His predecessor said they would put the burden on “those with the broadest shoulders”. How has that turned out?

The poorest tenth of households will lose about 10 per cent of their income by 2022 while the richest will lose just 1 per cent.

So much for “tackling burning injustices”. This government is tossing fuel on the fire.

Personal debt levels are rising and 8.3 million people are over-indebted. If he wants to help people out of debt, he should back Labour’s policy for a Real Living Wage of £10 per hour by 2020.

And with working class young people now leaving university with £57,000 of debt – because this government trebled tuition fees – this government’s new policy to win over young people is to keep fees at £9,250.
 
But that is just one of a multitude of injustices presided over by this government. Another is Universal Credit, which Labour has called on ministers to pause and fix.
 
That’s the view of this House. It’s the verdict of those on the frontline with evidence showing food bank use increases 30 per cent where Universal Credit is rolled out.
 
And the benches opposite should listen to Martin’s experience, a full-time worker on the minimum wage, he says: “I get paid four weekly meaning that my pay date is different each month”, because of that, under the UC system he was paid twice in a month and deemed to have earned too much so his UC was cut off. He goes on: “This led me into rent arrears and I had to use a food bank for the first time in my life”.
 
This Chancellor’s solution to a failing system causing more debt; is to offer a loan. And the six week wait, with 20 per cent waiting even longer, becomes a five week wait.
 
This system has been run down by £3 billion cuts to Work Allowances, the two-child limit and the perverse ‘rape clause’ – and caused evictions because housing benefit isn’t paid direct to the landlord.
 
So I say to the Chancellor: put this broken system on hold, so it can be fixed, and keep a million more children out of poverty.
 
For years we have had the rhetoric of a “long-term economic plan” that never meets its targets; when what all too many are experiencing is long-term economic pain.
 
And the hardest hit are disabled people, single parents and women.
 
So it is disappointing the Chancellor did not back the campaign of my Hon Friend for Brent Central, Dawn Butler, to end period poverty.
 
The Conservative manifesto has now been shredded and some ministers opposite have since put forward decent proposals, several conspicuously borrowed from the Labour manifesto.
 
Let me tell the Chancellor, as socialists we are happy to share. 
 
The Communities Secretary called for £50 billion of borrowing to invest in housebuilding. Presumably the Prime Minister slapped him down for wanting to “bankrupt Britain”. 
 
The Health Secretary has said the pay cap is over but where is the money to fund a pay rise? The Chancellor hasn’t been clear today, not for NHS workers nor for our police, firefighters, teachers or teaching assistants, bin collectors, tax collectors or our armed forces personnel.
 
Will the Chancellor listen to Claire? She says, “My Mum works for the NHS. She goes above and beyond for her patients. Why does the government think it’s ok to under pay, over stress and underappreciate all that work?”
 
The NHS Chief Executive says “the budget for the NHS next year is well short of what is currently needed”. 
 
The Health Secretary said in 2015 he would fund another 5,000 GPs, but in the last year we have 1,200 fewer GPs. We’ve lost community nurses. We’ve lost mental health nurses. 
 
The Chancellor promised £10 billion in 2015 but delivered only £4.5 billion so we’ll wait for the small print on today’s announcement. It certainly falls well short of the £6 billion Labour would have delivered.
 
Over a million of our elderly aren’t receiving the care they need. Over £6 billion will have been cut from social care budgets by March next year. 
 
Our schools will be 5 per cent worse off by 2019 despite the Conservative manifesto promising that no school would be worse off. 
 
5,000 head teachers from 25 counties wrote to the Chancellor, saying “we are simply asking for the money that is being taken out of the system to be returned”. 
 
Robert wrote to me saying, “As a senior science technician my pay has been reduced by over 30 per cent. I’ve seen massive cuts at my school. Good teachers and support staff leave“.
 
According to this government, 5,000 head teachers are wrong. Robert is wrong. The IFS is wrong.
 
Councils are warning that services for vulnerable children are under more demand than ever, yet have a £2 billion shortfall. Local councils will have lost nearly 80 per cent in direct funding by 2020.
 
In reality, across the country this means women’s refuges closing, youth centres closing, libraries closing, museums closing.
 
But compassion can cost very little and just £10 million is needed to establish the child funeral fund campaigned for by my hon friend for Swansea East, Carolyn Harris.  
 
Under this government there are 20,000 fewer police officers. And another 6,000 community support officers, and 11,000 Fire Service staff have been cut too. 
 
Our communities cannot be kept safe on the cheap.
 
Tammy explains how this has affected her: “our police presence has been taken away meaning increasing crime. As a single parent I no longer feel safe in my own village, particularly after dark.”
 
Mr Deputy Speaker, five and a half million workers earn less than the living wage, a million more than just five years ago. 
 
And the Chancellor can’t even see 1.4 million unemployed people. 
 
There is a crisis of low pay and insecure work, affecting 1 in 4 women, and 1 in 6 men, a record 7.4 million people in working households in poverty. 
 
If we want workers earning better pay, less dependent on in-work benefits, we need to strengthen trade unions. the most effective means to boost workers’ pay. 
 
Instead this government weakened trade unions and introduced Employment Tribunal fees – now scrapped thanks to Unison’s legal victory.
 
And Mr Deputy Speaker, why didn’t the Chancellor take the opportunity to make two changes to control debt?
 
Firstly, to cap credit card debt so that nobody pays back more than they borrowed.
 
And secondly, to stop credit card companies increasing people’s credit limit without their say so.
 
Debt is being racked up because this government is weak on those who exploit people: the rail companies hiking fares above inflation year-on-year, the water companies and the energy suppliers.
 
During the general election it promised an energy cap that would benefit “around 17 million families on standard variable tariffs”. But every bill tells millions of families the government has broken its promise.
 
And with £10 billion in housing benefit going into the pockets of private landlords every year, housing is a key factor in driving up the welfare bill.
 
With this government delivering the worst rate of housebuilding since the 1920s and a quarter of a million fewer council homes, any commitment is welcome. 
 
But we’ve been here before. The government promised 200,000 starter homes three years ago and not a single one has been built. 
 
We need a large scale public house building programme, not this government’s accounting tricks and empty promises.
 
We back the abolition of stamp duty for first-time buyers because it was another Labour policy at the election, not a Tory one.
 
It’s this government’s continual preference for spin over substance that means, across this country, the words “Northern Powerhouse” and “Midlands Engine” are now met with derision.
 
Yorkshire and Humber gets only one-tenth of the transport investment per head given to London. 
 
And government figures show that every region in the north of England has seen a fall in spending on services since 2012. 
 
The Midlands, East and West, is receiving less than 8 per cent of total transport infrastructure investment, compared with over 50 per cent going to London.
 
In the East and West Midlands 1 in 4 workers are paid less than the living wage. So much for the ‘Midlands Engine’.
 
Re-announced funding for the Transpennine rail route won’t cut it and today’s other announcements won’t redress the balance.
 
Combined with counterproductive austerity, this lack of investment has consequences in sluggish growth and shrinking pay packets, and public investment has virtually halved.
 
Under this government, the UK has the lowest rate of public investment in the G7, but it is now investing in driverless cars after months of road-testing back seat driving in government.
 
By moving from RPI to CPI indexation on business rates the Chancellor has adopted another Labour policy, but why don’t they go further and adopt Labour’s entire business rates pledges including exempting plant and machinery and annual revaluation of business rates.
 
Nowhere has that been more evident than over Brexit.
 
Following round after round of fruitless Brexit negotiations the Brexit Secretary has been shunted out for the Prime Minister who has got no further.
 
Every major business organisation has written to the government telling them to pull their finger out.
 
Businesses are delaying investment decisions, but if this government doesn’t get its act together soon they will be taking relocation decisions.
 
Crashing out with ‘No deal’ and turning Britain into a tin-pot tax haven will damage people’s jobs and living standards, serving only a wealthy few.
 
It’s not as if this government isn’t doing its best to protect tax havens and their clients in the meantime.
 
The Paradise papers have again exposed how a super-rich elite is allowed to get away with dodging taxes.
 
This government has opposed measure after measure in this House, and in the European Parliament, to clamp down on the tax havens that facilitate this outrageous leaching from the public purse.
 
Mr Deputy Speaker, too often it feels like there is one rule for the super-rich and another for the rest of us.
 
The horrors of Grenfell Tower were a reflection of a system that puts profits before people, that fails to listen to working class people.
 
In 2013 this government received advice in a coroner’s report that sprinklers should be fitted in all high rise buildings.
 
Today this government failed to fund the £1 billion investment needed to make homes safe. The Chancellor says councils should contact them, but Nottingham has, Westminster has, and they’ve been refused!
 
In a Parliament building scheduled to be retrofitted with sprinklers, to protect us, the message from this government to people living in high rise homes is: You matter less.
 
Our country is marked by growing inequality and injustice. 
 
We were promised a revolutionary Budget. The reality is nothing has changed.
 
People were looking for help from this Budget, they have been let down. 
 
Let down by a government that like the economy they’ve presided over is weak and unstable and in need of urgent change.
 
They call this Budget, ‘Fit for the Future’. The reality is this is a government no longer fit for office.

  
 

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A brief view of the budget

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budget-hammond-commons-6

He’s not very bright our chancellor, is he? Self-employed people face an increase in their National Insurance (NI) contributions as the Chancellor says he wants to “tackle the unfair burden on people in employment”. Presumably he means self employed people are not in employment. Yet they certainly aren’t included in unemployment figures, either. Last time I checked, employment means “the state of having paid work.”

That’s yet another broken manifesto pledge.

Gutto Bebb, Conservative Welsh minister, hit out at the proposals and called on the Government to “apologise.” Iain Duncan Smith added his voice to calls for a rethink of proposed changes to the National Insurance contributions after Hammond suggested that Brexit is responsible for the Government’s tax raid – conveniently mentioning Brexit for the first time regarding his budget. But he later denied that self-employed workers were paying the price for Brexit. Hard to keep up with what passes as the Conservative brand of reasoning and justification. It certainly makes me feel dizzy and nauseous, that’s for sure.

Hammond could have simply reduced the rate of NI that employees pay instead. He’s a bit of a wally. We did have a period of economic growth last year, second to only Germany, apparently. Good old Tories, eh?  Hurrah!

But I wonder who will benefit from that, assuming it’s really a growth in the economy? It won’t be disabled people claiming Personal Independence Payment (PIP) with severe psychological distress who can’t leave the house, that’s for sure. Or those suffering epilepsy, both types of diabetes and blackouts who need support with managing their treatments and monitoring their health conditions.

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A period of Orwellian growth. The economy is currently being propped up by increasing personal debt.  

All of these conditions in fact: Diabetes mellitus (category unknown), Diabetes mellitus Type 1 (insulin dependent), Diabetes mellitus Type 2 (non-insulin dependent), Diabetic neuropathy, Diabetic retinopathy, Disturbances of consciousness – Nonepileptic – Other / type not known, Drop attacks, Generalised seizures (with status epilepticus in last 12 months), Generalised seizures, (without status epilepticus in last 12 months), Narcolepsy, Non epileptic Attack disorder (pseudoseizures), Partial seizures (with status epilepticus in last 12 months), Partial seizures (without status epilepticus in last 12 months), Seizures – unclassified Dizziness – cause not specified, Stokes Adams attacks (cardiovascular syncope), Syncope – Other / type not known.

And these:  Mood disorders – Other / type not known, Psychotic disorders – Other / type not known, Schizophrenia, Schizoaffective disorder, Phobia – Social Panic disorder, Learning disability – Other / type not known, Generalized anxiety disorder, Agoraphobia, Alcohol misuse, Anxiety and depressive disorders – mixed Anxiety disorders – Other / type not known, Autism, Bipolar affective disorder (Hypomania / Mania), Cognitive disorder due to stroke, Cognitive disorders – Other / type not known, Dementia, Depressive disorder, Drug misuse, Stress reaction disorders – Other / type not known, Post-traumatic stress disorder (PTSD), Phobia – Specific Personality disorder, Obsessive compulsive disorder (OCD).

What kind of government cuts support for those needing help to manage medication, monitor a health condition, or both?

What kind of government cuts mobility support for people who can’t leave the house alone?

It seems that most people who are actually ill won’t be eligible for PIP. I wonder which people the government have in mind when they say “those in greatest need”?

Oh, it’s the millionaires again. Phew! Silly me.

From the Equality Trust:

pie wealth

The poorest people lose out from the budget yet again, of course. The distribution of wealth won’t change, with many households in the lowest deciles being worse off. The graph above does not show the full extent of the difference between the richest and the rest of society. This is because the top 1% have incomes substantially higher than the rest of those in the top 10%. In 2012, the top 1% had an average income of £253,927 and the top 0.1% had an average income of £919,882.

If you earn a few hundred thousand, you are set to do rather well yet again from another Tory budget. It’s remarkable how those need it least always get the financial “incentive” isn’t it?  Carrots for the fat cats.  It’s the delux model of “incentives”.

Meanwhile those who need it most pay for those who need it least. Poor people get the budget premium “incentive”, which includes standing on the naughty step, and thinking about what you have not done.

The Tories like wielding a stout stick and giving out a good thrashing for those who dare to fall ill. 

And just to clarify, social justice, equality and inclusion are NOT the same thing as work. They should exist independently of someone’s employment status. Otherwise, “inclusion” takes an Orwellian turn to the far right. We know from history that work doesn’t really set us free. People “enjoying the security and dignity of work” does not entail ensuring those who can’t work or who lost their job are utterly insecure, hungry or destitute. 

The government’s “pledge” to increase adult social care funding is being paid for by increases in council tax, some of which will be paid by those previously exempted from council tax because they are sick, disabled or unemployed. Social security was originally calculated to meet only the cost of fuel and food on the assumption that people needing support would be exempt from rent and council tax. That no longer is the case.

The rises due to come into force from April will not be sufficient to avoid strapped for cash councils having to make deep cuts to essential services, including road repair, parks, children’s centres, leisure centres and libraries. All of this in a time of “economic growth”. It looks like austerity is to be a permanent feature of Conservative neoliberal policy-making.

For many families who are just about managing, the withdrawal of state support for those who are in low paid work is hardly an incentive to “make work pay”. Of course Hammond has ignored the scandal of in-work poverty. This is one of the other austerity measures that he has chosen to keep. Introducing sanctions for those claiming social security because their employers don’t pay them enough to live on is simply a big bully’s stick, which would be better aimed at exploitative and miserly big business employers. Fancy punishing people because profit driven businesses pay as little as possible. 

It’s all the same peevish and spiteful mentality as “making work pay.” Instead of ensuring workers get a decent rate of pay, like you’d think from the Tory claim, the truly nasty party cut benefits and decided to impose punishing conditions on people who need state support indiscriminately, regardless of the reason, instead.

That’s pure upper class prejudice and malice.

And greed. 

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Meet Brexit, by the way, he’s the big elephant in the room, Mr Hammond

 

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Iain Duncan Smith abandoned his own sinking ship

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Analysis of George Osborne’s budget from the Institute for Fiscal Studies.

Stephen Crabb has been appointed as the new work and pensions secretary, after Iain Duncan Smith resigned in a flurry of controversy on Friday.

Mr Duncan Smith has said the latest planned cuts to disability benefits were “not defensible” in a Budget that benefited higher-earning taxpayers.

David Cameron said he was “puzzled and disappointed” that Mr Duncan Smith had decided to go when they had agreed to have a rethink about the policies

Iain Duncan’s Smith’s letter of resignation must be a BIG embarrassment to the  Government. It was certainly designed to inflict maximum damage particularly on Chancellor George Osborne. I’ve previously noted that the Chancellor has a tendency to regard the Department for Work and Pensions as little more than an annex to the Treasury, and the welfare budget as the Treasury’s disposable income, but I never anticipated that Duncan Smith would come to say that he sees it that way, too. This is, after all, a minister that has invented statistics and told some pretty far-fetched fibs to prop up justifications of his policies that entail some pretty draconian measures, such as sanctions and work fare, after all.

Yet surprisingly, Duncan Smith has also quite willingly and very publicly provided the government’s opponents with ammunition. He has effectively denounced not only Osborne’s budget, but also, his targeted austerity measures, yet curiously, Duncan Smith has until now been one of the most ideologically devout Thatcherite Conservatives, which is reflected in every policy he has formulated.

He has basically said what many of us have been saying for a long time: that the cuts are political and not because of economic necessity, nor will they help the economy. He also as good as said he doesn’t think we are “all in it together”. It turns out that Osborne blamed Duncan Smith for the Personal Independence Payment (PIP) and Employment Support Allowance (ESA) cuts. But Duncan Smith has been a very quiet man recently, often conspicuous by his absence during parliamentary debates, with Priti Patel left defending the ESA cuts in particular in the Commons.

However, the Department for Work and Pensions did a review of PIP last year, and that’s where the “justification” for the cuts came from – a sample of just 150 people, which was hardly a representative sample. It’s difficult to imagine that IDS didn’t order that review. But it was Osborne who announced the cuts to PIP, not Iain Duncan Smith. Just who carries the original responsibility for the proposed PIP cuts is probably never going to be fully untangled from the crossfire of accusations and counter accusations. But surely Cameron is ultimately responsible for Conservative policies?

In his resignation letter, Iain Duncan Smith says:

“I have for some time and rather reluctantly come to believe that the latest changes to benefits to the disabled, and the context in which they’ve been made are, a compromise too far. While they are defensible in narrow terms, given the continuing deficit, they are not defensible in the way they were placed within a budget that benefits higher earning taxpayers. They should have instead been part of a wider process to engage others in finding the best way to better focus resources on those most in need.

I am unable to watch passively while certain policies are enacted in order to meet the fiscal self imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.

Too often my team and I have been pressured in the immediate run up to a budget or fiscal event to deliver yet more reductions to the working age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not be repeatedly salami-sliced.

It is therefore with enormous regret that I have decided to resign. You should be very proud of what this government has done on deficit reduction, corporate competitiveness, education reforms and devolution of power.

I hope as the government goes forward you can look again, however, at the balance of the cuts you have insisted upon and wonder if enough has been done to ensure ‘we are all in this together’ “

You can read the letter in full here

You can see Cameron’s response in full here

Many Conservatives have suggested that Duncan Smith – a supporter of Brexit – had been looking over several weeks for an opportunity to resign, and claimed that he wanted to find a moment when he could inflict maximum damage on the campaign led by Cameron and Osborne to keep Britain in the European Union. But writing in the Observer, Bernard Jenkin, a Tory MP and chair of the Commons public administration select committee, says that Duncan Smith was not prepared to tolerate another raid on the disability budget.

Referring to the prime minister’s letter to Duncan Smith, in which Cameron said he was “puzzled” by the resignation, Jenkin says: “What that letter does not make clear is that the £4bn savings in the budget from welfare still stands and, once again, Iain was being told to find similar cuts from other benefits for working-age people – including for the disabled – again undermining the positive incentives that make it worthwhile for them to take work. That is what he finds morally indefensible.”

However, Debbie Abrahams, the shadow minister for disabled people, who has faced Duncan Smith many times during Commons debates and Work and Pensions Committee inquiries, says she does not accept the reasons Iain Duncan Smith has given for resigning, and believes he chose to resign so he could “embarrass the government as much as he can”.

She adds that planned cuts to disability benefit payments in the Budget were “grossly unfair” and would hit “the most vulnerable in society at the same time the highest earners are getting tax cuts”. 

She says she is grateful that many Conservative MPs are critical of the proposals, but adds: 

“We must make sure that this last cut that has been announced around Personal Independence Payments is stopped and does not carry on.”

The resignation is particularly surprising given that, just hours earlier, the Treasury shelved the proposed cuts to PIP – following threats of a Tory backbench rebellion. Three Tory MPs – including mayoral candidate Zac Goldsmith – have  also been asked to resign as patrons of disability charities over their support for the recent welfare cuts. The complete failure of the austerity project is finally unravelling the Conservatives, and at a time when the Brexit faction of the party is already causing considerable disarray.

Even some of the most loyal Tories were finding it difficult to defend taking money away from sick and  disabled people – particularly since many of those who receive PIP are in work, and in fact some rely on it to stay in work. The cuts to ESA and PIP take place in the context of a Tory manifesto that included a pledge not to cut disability benefits. In fact in March last year, the Prime Minister signalled that the Conservatives will protect disabled claimants from welfare cuts in the next parliament (this one). Cameron said the Conservatives would not “undermine” PIP, which was introduced under the Coalition to save money by “targeting those most in need.” Now it seems those most in need are not the ones originally defined as such.

Controversially, the cuts to disability benefits were planned to fund tax cuts for the most affluent – the top 7% of earners. The Chancellor raised the threshold at which people start paying the 40p tax, in a move that will  see many wealthier people pulled out of the higher rate of income tax, in the coming budget. Mr Osborne said that he wants to “accelerate progress” towards the Conservative’s manifesto pledge of raising the threshold for the 40p rate to £50,000 in 2020. The average annual income in the UK is around £27,000.

The Labour Party have urged Stephen Crabb to appear before MPs on Monday to announce formally that the cuts to disability benefits had been dropped. Owen Smith, the shadow work and pensions secretary, said: “His very first act as secretary of state must be to come to parliament on Monday to announce the full reversal of cruel Tory cuts that will see 370,000 disabled people lose £3,500 a year.”

He also urged Crabb to “stand up to a Treasury that is intent on cutting support for those most in need to pay for tax breaks for those who least need them”.

The main retaliation from the Conservative frontbench has been that Duncan Smith knew about the disability cuts (which he did) and that this is an act of mischief and sabotage designed and timed to destablise Cameron regarding Europe. It may well be. But the divisions had already caused wobbles, Duncan Smith just delivered a swift and hefty kick to the “in” crowd.

However, it’s also clear there has been a rising tension between the Treasury and the Department for Work and Pensions for some time. Duncan Smith felt that the benefits system could be scaled back only so far. Osborne and Cameron would prefer to see the welfare state completely dismantled.

Nonetheless, we have witnessed Duncan Smith’s long term disconnection from the impacts of his policies. He has persistently refused to engage with critics raising serious concerns about the consequences of the welfare “reforms”. He has refused to carry out a cumulative impact assessment of his policies and absolutely refused to monitor the impacts, most of which have been dire for sick and disabled people, and when the specifics of negative consequences were pointed out to him, he has typically reacted with denial, anger and accusations of “scaremongering.”

Duncan Smith used the mantra “there’s no proof of causality” to dismiss those who recognised a correlation between his welfare “reforms” and an increase in premature mortality rates and suicide. He has consistently and quite unforgivably shown that he is more concerned about hiding evidence and stifling criticism than he is about conscienciously investigating the harmful and sometimes devastating consequences that his policies have had on many people.

On the day he resigned, Duncan Smith’s department lost a four year legal battle to keep the many potentially humiliating problems with Universal Credit from the public.

Whatever the reasons may be for Duncan Smith’s resignation, he has certainly highlighted very well that Conservative budget decisions are partisan, taken for  party political interest rather than with consideration for the national interest. But in more than one way.

It’s also worth bearing in mind that it is Iain Duncan Smith’s “reforms” that have prompted a United Nations inquiry into grave and systematic violations of the human rights of disabled people. It’s highly unlikely that Duncan Smith’s reputation will be enhanced in the long-term regarding his legislative legacy, particularly regarding disabled people. He has collaborated with other ministers in designing and extending techniques of neutralisation to attempt justify what are extremely prejudiced, discriminatory and punitive policies aimed at the poorest citizens.

This is a man who has removed people from a structural socioeconomic context and then intentionally blamed them for their individual socioeconomic circumstances, most of which have been created by this government’s actions since 2010. Every single Conservative budget has taken money from the poorest and gifted it to the wealthiest. It’s inconceivable that Tory ministers don’t understand such policies will invariably extend and perpetuate inequality and poverty.

Duncan Smith has damned himself, but nonetheless, a Conservative minister resigning and stating that it is because of a Conservative budget, publicly citing reasons that correlate with the opposition’s objections regarding the government’s ideologically driven and targeted austerity, is a particularly damning turn of events for the Conservative Party as a whole, that’s for sure.

Now that Duncan Smith has publicly denounced the Conservative austerity project, I wonder if he will also recognise and embrace the rational expertise and economic competence of a real party of social justice, which rescued this country from the consequences of a global recession by the last quarter of 2009, whilst Osborne had us back in recession by 2011, and lost us our triple A Fitch and Moody credit ratings after promising not to. I wonder if Duncan Smith now supports the fair party with a track record of verifiable economic expertise – that would be the Labour Party.

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Picture courtesy of Robert Livingstone

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Government plans further brutal cuts to disability support

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Disabled people are already carrying a disproportionately high burden of the austerity cuts, despite government claims of economic recovery.

Government ministers are planning to cut a key element of the Personal Independent Payment (PIP). Last year a consultation indicated that the Conservatives were considering ways of reducing eligibility criteria for the daily living component of PIP, by narrowing definitions of aids and appliances.

From January 2017, the cut is likely to hit people experiencing incontinence, who struggle to dress themselves, and those facing other fundamental barriers to health and essential basic care. The cut, it is estimated, will affect at least 640,000 disabled people by 2020.

Controversially, it is alleged that the cuts to disability benefit will fund tax cuts for the most affluent – the top 7% of earners. The Chancellor is set to raise the threshold at which people start paying 40p tax, in a move that will probably see  many wealthier people pulled out of the higher rate of income tax, in the coming budget. Mr Osborne says he wants to “accelerate progress” towards the Conservative’s manifesto pledge of raising the threshold for the 40p rate to £50,000 in 2020, it is understood.

Meanwhile, under the plans announced on Friday, sick and disabled people will be much less likely to receive essential disabled benefits if they use aids such as a handrail or a walking stick to get dressed or use the toilet.

The Department for Work and Pensions reviewed a sample of 105 cases of people who had scored all, or the majority, of their points for PIP due to aids and appliances, in order to assess the extent to which the award may reflect extra costs.

The review led the government to conclude that PIP “doesn’t currently fulfil the original policy intent”, which was to cut costs and “target” the benefit to “those with the greatest need.” That originally meant a narrowing of eligibility criteria for people formerly claiming Disability Living Allowance, increasing the number of  reassessments required, and limiting the number of successful claims.

Prior to the introduction of PIP, Esther McVey stated that of the initial 560,000 claimants to be reassessed by October 2015, 330,000 of these are targeted to either lose their benefit altogether or see their payments reduced. Of course the ever-shrinking category of “those with the greatest need” simply reflects a government that has simply made a partisan political decision to cut disabled people’s essential income to fund a financial gift to the wealthiest citizens. There is no justification for this decision, nor is it “fair.”

The government now  claim that the proportion of people awarded the daily living component of PIP, who scored all of their points because they need aids and appliances, has more that tripled, from 11 per cent in April 2014 to 35 per cent in 2015.

The PIP assessment currently examines an individual’s ability to complete ten daily living activities and two mobility activities. Regular reviews were also introduced by the last government to ensure that claimants continue to receive the “right level of support.”

The increase has largely been driven by a significant and sustained rise in relation to activities one, four, five and six: preparing food, washing and bathing, dressing and undressing, and managing incontinence and toileting. Around three-quarters of those who score all of their points through aids and appliances score the minimum number of daily living points needed to qualify for the standard rate of the daily living component.

The government ridiculously claim that the “evidence” presented to the review suggested that in some instances points were being awarded “… because claimants chose to use aids and appliances, rather than needed them.”  And noted that in many cases “ these were non-specialised items of very low cost.”

However, it’s very difficult to justify cutting support for people who require aids to meet fundamental needs such as preparing food, dressing, basic and essential personal care and managing incontinence.

Ministers have now announced their intention to cut PIP for people who currently receive it to help them afford specially-adapted appliances and equipment. Examples of qualifying equipment currently includes adapted cutlery for people who find it difficult to hold things for long periods of time and specially-designed household items for people less able to stand.

Justin Tomlinson, the disabilities minister, said that the cuts to funding for aids and appliances for the disabled could save about £1bn a year and was announced the week before the budget. Charities warned that the cuts to personal independence payments (PIP) would be devastating after the move was confirmed by Tomlinson on Friday.

Tomlinson, said: “The introduction of Personal Independence Payment to replace the outdated Disability Living Allowance for working age claimants has been a hugely positive reform.

But it is clear that the assessment criteria for aids and appliances are not working as planned. Many people are eligible for a weekly award despite having minimal to no extra costs and judicial decisions have expanded the criteria for aids and appliances to include items we would expect people to have in their homes already.

We consulted widely to find the best approach. And this new change will ensure that PIP is fairer and targets support at those who need it most.”

Only a Conservative minister would claim that taking money from sick and disabled people is somehow “fair,” and they frequently do. The cuts of £120 a month to the disability benefit employment support allowance (ESA) are also claimed to be “fair.” and “supportive.” Though I have yet to hear an explanation of how this can possibly be the case. Ministers claimed that people subjected to the ESA Work Related Activity Group cuts could claim PIP if they required support with extra living costs, but now we are told that PIP is to be cut, too.

Bearing in mind the Department for Work and Pensions “review” was based on a sample of just 105 people, it’s very difficult to see how further inhumane cuts to the lifeline income for this group of amongst the most disabled citizens can possibly be justified. How did ministers “plan” the assessment criteria for aids and appliances to work, exactly?  People qualifying for PIP need extra support in meeting their living costs.

A coalition of 25 disability charities has written to the Government to warn against plans that would strip some disabled people of a key payments meant to help them live more independent lives.

The Disability Benefits Consortium wrote to Justin Tomlinson, to argue that proposed changes to Personal Independence Payment – or PIP – assessments would have a “severe impact” on people’s security and make it harder for them to find work.

Debbie Abrahams, the shadow disabilities minister, said: “Removing support for people who need help to use the toilet or dress is an attack on dignity.”

“These further cuts would represent another huge blow, making life even more difficult for many people who already facing huge barriers.”

Phil Reynold, policy and campaigns adviser at Parkinson’s UK, said: “If someone needs aids and appliances to carry out the most basic tasks that most people take for granted then they clearly need ongoing support to live independently, which is often expensive. They should not be penalised by making personal independence payments even more difficult to claim.”

Michelle Mitchell, chief executive of the MS Society, said: “This decision could have a devastating impact on the lives of people with MS. In the worst cases, they could lose up to £150 a week.

PIP is an essential benefit which goes towards the extra cost of being disabled. The new plans will fail some of the most vulnerable people in society and we have serious concerns about the future health and welfare of those affected.”

The government is currently being investigated by the United Nations because of  serious allegations that many of us have made regarding the welfare “reforms”, which have extended gross and systematic abuse of the human rights of disabled people. The UK is the first country to be subject to an investigation regarding the government’s failure to meet legal obligations to uphold disabled people’s human rights. In the 6th wealthiest nation of the world, and a so-called liberal democracy, this treatment of an already marginalised and protected social group is utterly shameful.

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Conservatives plan stealth raid on in-work benefits and the long-term phasing out of child benefit

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Picture courtesy of Tina Millis

The respected Institute for Fiscal Studies (IFS) has warned in a recent Green budget report that George Osborne’s plan to achieve a budget surplus will result in 500,000 families losing child benefit and tens of thousands having to pay a higher tax rate. More than half a million families will be stripped of child benefit over the next five years under a series of “stealth” tax raids by the Chancellor to help “balance the books.” Fuel duty will also need to be be significantly raised over the next five years or Osborne will face a £3billion black hole in his surplus plans.

Currently those earning £50,000 will lose some benefit and those earning £60,000 or more lose it all. Eventually, the report concluded, even those earning modest wages and paying the basic rate of tax will start to lose their child benefit entitlement.

The authors of the report concluded that Mr Osborne’s tax plans “lack any coherent principle” and called for more transparency, adding: “If the desire is for these tax rates to apply to a greater fraction of individuals than is currently the case, it would be better for politicians to state this clearly, rather than achieving the outcome through stealth using fiscal drag.”

Osborne’s promise to deliver a budget surplus from 2019-20 is “risky” and could have a long-term impact on the UK because the Government refuse to borrow money to fund large-scale infrastructure projects, despite low inflation.

Total public spending, excluding health, will be at its lowest level since 1948 as a proportion of national income.

The authors said: “If continued indefinitely, child benefit would be received by fewer and fewer families over time.

“But if this is the government’s intention, it would again be better to state this clearly rather than achieving it by stealth.”

Tim Loughton, a former Conservative education minister, branded the IFS findings a “double whammy” for families who are already paying the 40p higher rate of income tax.

He said: “This was inevitable. It inevitably means more and more families suffer a double whammy of having to pay higher rate tax because of the freezing of the threshold and losing out on all or most of their child benefit at the same time.

“This is hardly helpful for hardworking families trying to do the right thing for their children – if you don’t index up the rates and if you have very complicated formula that doesn’t accurately reflect household income … it’s a double unfairness.”

The Treasury has declined to comment on the IFS criticism of the Office of Responsible Budget (OBR) charter, which Osborne has committed to. But a spokesperson has said: “There may be bumpy times ahead – so here in the UK we must stick to the plan that’s cutting the deficit.”

That will invariably mean further austerity cuts. Up until recently austerity targeted those claiming out of work benefits, particularly those who are unemployed because they are sick and disabled. But increasingly, austerity is being aimed at those in low paid or part-time work, and the middle classes are set to lose further income, under the Conservative plans, too.

Despite being a party that claims to support “hard-working families,” the Conservatives have nonetheless made several attempts to undermine the income security of a signifant proportion of that group of citizens recently. Their proposed tax credit cuts, designed to creep through parliament in the form of secondary legislation, which tends to exempt it from meaningful debate and amendment in the Commons, was halted only because the House of Lords have been paying attention to the game.

The use of secondary legislation has risen at an unprecedented rate, reaching an extraordinary level since 2010, and it’s increased use is to ensure that the Government meet with little scrutiny and challenge in the House of Commons when they attempt to push through controversial and unpopular, ideologically-driven legislation. The Shadow secretary for Work and Pensions, Owen Smith, has pointed out that cuts to benefit in-work entitlements being introduced through Universal Credit mean controversial tax credit reductions have been simply been “rebranded” by the government rather than reversed.

In the Spending Review last November, George Osborne announced that tax credit reforms, which were set to almost halve the income level at which support is withdrawn from £6,420 to £3,850, would not be enacted, an analysis of the changes published by the Office for Budget Responsibility (OBR) highlighted that cuts to work allowances in Universal Credit, which set the level at which benefits will begin to be withdrawn under the new system, have not been reversed. Furthermore, people claiming Universal Credit needing in-work benefit because of low pay and  part-time hours will be expected to increase their wages and working hours, or controversially, face losing their benefit.

The Chancellor has cut in half the amount people can earn before their working tax credit starts to “taper” (reduce) – down from £6,420 to £3,850 from April 2016. Restrictions to eligibility for child tax credit means that families with more than two children are set to lose a significant amount of weekly income from April 2017. whilst the flat £545 “family element” paid before the amount for each child will also be removed completely. This will affect people in work, the think-tank Resolution Foundation said that working mothers would be worst hit – accounting for 70% of money saved by the Treasury, but overall the cuts will hit those out of work the hardest.

Many of us recognised the Tory “making work pay” mantra for what it was in 2012, when the first welfare “reforms” were pushed through parliament against widespread resistance, on the back of “financial privilege.” It was and always has been a diversion to allow the Conservatives to dismantle our welfare state, and reduce the value of labour, in much the same way as the 1834 Poor Law principle of less eligibility, which fulfilled the same purpose. The Poor Law Committee also wanted to “make work pay.” Since 2012, steadily rising in-work poverty has shown that having a job no longer provides a route out of poverty.

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The IFS report conclusions simply confirm what many of us have suspected since 2012: that the government have a secret long-term aim to completely dismantle the social gains of our post-war settlement: the welfare state, affordable social housing provision, the National Health Service and access to justice through legal aid.

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Picture courtesy of Robert Livingstone

Cuts under Universal Credit are discriminatory and may be illegal

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The Labour Party released details of research last month, showing how new claimant families will get lower in-work benefit entitlements when tax credits are replaced by the Universal Credit benefit system.

Owen Smith, the shadow Work and Pensions secretary, said research commissioned from the House of Commons library shows that next year, thousands of working families will be at least £2,500 a year worse off as a result of the government’s cuts to Universal Credit.

Mr Smith MP, responding to Iain Duncan Smith’s recent claim on the Andrew Marr show that “nobody loses a penny” from cuts to Universal Credit, said:

Iain Duncan Smith is completely wrong to say nobody loses a penny from his cuts to in-work support.

 Cutting Universal Credit raises £100m for the government next year and that money has to come from somewhere.

What the Tories aren’t telling us is that the £100m – and a further £9.5 billion over the next five years – comes from the pockets of low- and middle-income families.

That means those currently on Universal Credit face losses of up to £2,400 come April.

Just like tax credit cuts, working families will be worse off next year and just like those cuts, Labour will fight them at every turn.

Earlier this month, analysis from the independent Office for Budget Responsibility, (OBR) suggested the changes to universal credit announced in the July budget would save the Chancellor close to £3bn by 2019-20.

The Labour Party is taking advice from lawyers about the legality of the benefit cuts under universal credit. Owen Smith, the shadow work and pensions secretary, said it is discriminatory that a single mother working full-time on the minimum wage could be almost £3,000 worse off under universal credit than a mother in precisely the same circumstances on tax credits.

The challenge raises the possibility that the new welfare system could be challenged in court.

Although the Chancellor abandoned plans to cut tax credits affecting millions of working families, in his Autumn Statement, it was due to  pressure from the opposition, because the cuts were rejected by the House of Lords and a number of uneasy Tory backbenchers also raised concerns about the negative impact the cuts would have on working families.

Labour MPs have highlighted that claimants will be substantially worse of claiming Universal Credit, the  in-work benefit payments are much lower.

In his autumn statement speech, the Chancellor said: “The simplest thing to do is not to phase these changes in but to avoid them altogether.” But he added: “Tax credits are being phased out anyway as we introduce universal credit.”

The OBR’s analysis show that by 2021 the changes to Universal Credit will save the Treasury almost as much each year as the controversial tax credits policy would have done.

Mr Smith said:

Those lucky enough to stay on tax credits will be massively better off than those on universal credit … That disparity cannot be fair, it cannot be right and it may not even be legal, and we are seeking advice as to the legality of that move.

Mr Smith also confirmed that a Labour government would reverse cuts to benefits happening under Universal Credit. He said:

We will press for the same reversal for the victims of the universal credit heist that will hit precisely the same Tory and Labour constituents just before the next election.

He made the comments in a debate about the welfare cap, after the government sought approval for a motion that said the breach of Osborne’s own fiscal rules were justified because of the reversal of tax credit cuts.

Junior Work and Pensions minister, Shailesh Vara, has confirmed that on current forecasts the cap will not be met for three years.

Universal Credit is to be rolled out gradually, with about 500,000 people on the new benefit by next April. The government has insisted they will be compensated for lower payments through a special scheme called the flexible support fund.

However, Owen Smith said the only money on offer was a £69m grant for job centre managers to help people who are close to getting into work with costs such as bus fares and new clothing.

He said:

Even if it were permissible to use that money, it is in no way going to make up for the £100m shortfall next year, the £1.2bn shortfall the year after, and certainly not the £3bn shortfall in 2020. It is completely impossible and I fear it is also misleading to the public.

Mr Smith also queried the Chancellor’s absence from the House of Commons during the debate, saying he had “carelessly, ignominiously fallen into his own welfare trap” and “slipped on his own smirk”.

He said:

But inexplicably, he’s not here to account for it. Last spring he was quite definite that he should be. He said: ‘The charter makes clear what will happen if the welfare cap is breached. The chancellor must come to parliament, account for the failure of public expenditure control’”.

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Conservatives in disarray as Osborne signals raid on Duncan Smith’s Universal Credit funds

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George Osborne and Iain Duncan Smith have clashed over the chancellor’s plans to soften the impact of tax credit cuts by raiding the budget for Universal Credit.

The Centre for Social Justice (CSJ), which was founded by Iain Duncan Smith, insists that the Chancellor could use this month’s Autumn Statement to ease the impact of the controversial changes without risking his drive for a budget surplus.

In a critical report, the thinktank warned against taking money from Duncan Smith’s flagship Universal Credit scheme to sweeten the tax credit pill. Duncan Smith said that he’s concerned that the raid will serve to “undermine people’s incentive to work.”

The CSJ said in their report that the UC reforms meant by 2020 only 9% of those currently getting tax credits would still be receiving them.

Instead, it was suggested that the Government could “help people to work more hours” or introduce a transitional fund for those hardest hit.

But Osborne is nonetheless preparing to fund plans to soften the impact of tax credit cuts by making people claiming Universal Credit forgo as much as 75p of every extra pound they earn. At present Universal Credit recipients lose 65p for every extra pound they earn. Osborne is thought to be examining plans to increase the figure, known as the “taper”, to 75p.

The most expensive course of action would be to only impose the tax credit cuts on new claimants – but the authors note that it would have the “least social and political cost”.

The chief executive of the Centre for Social Justice, Baroness Stroud, who is a former special adviser to the Work and Pensions Secretary said:

“There are no easy choices, but these are the options the Chancellor has. What he should not do is raid Universal Credit to pay for any transitional changes or he will be recreating the same problem there.

“The projected savings through changes to tax credits is £4.4 billion, the Government plans to turn a surplus of £10 billion in 2019-20 and of 11.6 billion in 2020-21.

“Why have a surplus if we can’t protect those on the lowest pay, doing the right thing by taking work?

“The Chancellor can protect these workers and have a surplus by 2020.

“This Government is set to achieve its historic aim to make sure work always pays more than welfare, we shouldn’t put that at risk.”

Paul Johnson, the Director of the respected Institute for Fiscal Studies, questioned whether the move would raise enough to limit the impact of tax credits. He said: “If you are also increasing the taper rate then you are losing quite a lot of the key design of Universal Credit.”

Both the Treasury and the Deparment for Work and Pensions have declined to comment, but Conservative Tim Montgomerie, a columnist for The Times and founder of the Conservative Home website, said he believed George Osborne “could be forced to resign” over his tax credit omnishambles, and he warned that the chancellor faces a “massive rebellion” from his own party because the policy  is “terrible politics”.

“You cannot fight an election saying you are standing up for hard-working families then you cut benefits for hard-working families,” he said.

Perhaps it is time for the Conservatives to recognise that policies are not an ideological tool designed to ensure the government gets its own way in exercising traditional Tory prejudices towards the working and non-working poor.

However, in fairness there has been a series of right-wing backbenchers that have aired their disquiet at the cuts, although that unease may have be motivated by a pragmatic rather than an any ethical objection. The proposed tax credit cuts do make a mockery of the Tory claims to ensuring that “work always pays,”and presents the public with an incoherent narrative that has now lost any credibilty.

Montgomerie said:

“I don’t think George Osborne will tweak,” he said. “If he does just try to get away with this, he will not just be defeated in the Lords, he will be defeated in the Commons.”

539627_450600381676162_486601053_n (2)Courtesy of Robert Livingstone

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This post was written for Welfare Weekly, which is a socially responsible and ethical news provider, specialising in social welfare related news and opinion.

Jeremy Corbyn confronted the Tories with the poverty they’re creating at PMQs – and all they could do was laugh – Liam Young

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Originally published in the Independent by Liam Young.

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The Tories seem to forget that they were the last government – at some point they will have to take responsibility for their handling of the nation.

As Jeremy Corbyn stood for his second PMQs today, the mocking Tory laughs told us everything we need to know about their enduring Bullingdon Club-style politics. Old habits die hard, it seems. But Corbyn opened strongly, with an issue that unites the Labour party: the cuts to working tax credits which penalise the lowest earners, known colloquially as the Tory work penalty.

Again, the Tories laughed at the name ‘Kelly’, so apparently unbelievable do they find the first names of Corbyn’s constituents; they soon fell silent, however, as they heard of her struggle as the mother of a disabled child earning minimum wage in a 40.5-hour-per-week job. Corbyn tackled the bullyboys by pausing at their laughter this time. ‘Some may find this funny,’ he said, as he continued to talk about mass inequality and the housing problem in London. It was a subtle highlight of something glaringly obvious: for millionaires protected by Tory policies, inequality bolstered by unfair taxes and buy-to-let properties really is hilarious.

Cameron’s reply to the work penalty issue was the same old line: apparently a £20-a-week increase in wages will magically solve the problem. This is not true, of course, as Corbyn promptly replied: working families are set to be £1,300 a year worse off as the Conservative government hammers the working and middle classes so as to give to the super rich.

Cameron claimed that Corbyn’s figures on poverty were wrong, but perhaps that is something to do with the fact that the Work and Pensions Secretary fixed the definition of ‘poverty’ recently. You don’t feed and clothe homeless children by changing a definition, and the government should be ashamed. The fact that 50 per cent of wealth is in 1 per cent of hands globally is shambolic, and reports today that inequality is growing in the UK even as our country now has the third most ‘ultra-high net worth individuals’ in the world put paid to Cameron’s claims to have driven opportunity. There could be no bigger proof that his policies continue to squeeze the middle and punish the poor.

Jeremy Corbyn probably had a headache even before PMQs started. George Osborne’s proposal of a ‘fiscal charter’ has been causing problems for Labour over the last few days, not least because it was once a Labour policy rubbished by Cameron himself. It seems strange, then, that Tories are so desperate to implement it now, considering that the Governor of the Bank of England has not endorsed its proposal and no economist has come out in support of it. Most commentary has focused on how it is unrealistic to try and tie the hands of future governments – almost as though Osborne is trying to make an ideological (and erroneous) point about how Labour ‘caused the recession by their overspending’, rather than the truth about rich bankers running wild without regulation. Of course, it also gave Osborne an excellent opportunity to personally ask Labour MPs to rebel – little more than a cynical attempt to ruffle some feathers.

In June, over 70 economists published a letter that clearly noted that the charter has ‘no basis in economics’ and that permanent surplus would increase the debt of households and businesses. The policy is not about protecting the British economy; it is an attempt to bury the Labour party under the same message of the last government. The Tories seem to forget that they were the last government – they have been in power now for almost six years, and at some point they will have to take responsibility for their handling of the nation.

Despite all this, PMQs today were the best moment of Corbyn’s leadership of the Labour party so far. Osborne’s attempt to destabilise the Labour party and force Labour MPs to rebel spectacularly failed, while Corbyn asked if he could bring the Prime Minister back to reality as Tory rhetoric failed against his grassroots facts.

Cameron wants to get Britain building houses, he wants to alleviate poverty, and he wants to rebuild the economy – or so he’d have you believe. In the last five years, house-building has stalled, poverty has increased, inequality appears to be rising and the national debt has doubled. At some point, the Tories have to stop blaming Labour for their own disastrous record. Corbyn is now attacking their mythology head-on – and he might just be getting somewhere. 

Liam Young is a freelance political journalist studying international relations at the LSE