Category: Budget

Austerity Is a Choice, Labour Must Offer Another – Jeremy Corbyn

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Austerity is a political choice not an economic necessity. When the Chancellor rose to his feet at the emergency Budget in July, and when he does so for his Spending Review in October, what is being put forward is an ideologically-driven rolling back of the state.

The analysis published today by the TUC reveals how the Budget gives money to the rich, but takes away from the poor.

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This is the Conservative project, dressed up in the post-crisis language of budget deficits and national debt for extra impetus. Inequality doubled under the Thatcher government, and her heirs seem to be doing all they can to ensure that legacy is extended.

The Budget showed austerity is about political choices, not economic necessities. There is money available: the inheritance tax cuts announced in the Budget will lose the exchequer over £2.5billion in revenue between now and 2020. What responsible government committed to closing the deficit would give a tax break that only applies to the richest 4% of households?

The Conservatives are giving away to the very rich in inheritance tax cuts twice as much as reducing the benefit cap will raise by further impoverishing the poorest, and socially cleansing many towns and cities.

Another choice was to cut UK corporation tax to 18%, which at 20% is already the lowest in the G7, lower too than the 25% in China, and half the 40% rate in the United States.

The Treasury estimates that this political choice will see our revenue intake from big business fall by £2.5billion in 2020. That’s nearly twice the amount saved by cutting the tax credits available families with more than two children.

In such circumstances, Labour must be clear: we oppose the Budget, and we oppose austerity. As a group of 40 economists wrote to the Observer a few weeks ago, “opposition to austerity is actually mainstream economics, even backed by the conservative IMF”.

The language of “bringing down the deficit” is non-controversial, it is the method (austerity) that reveals the Chancellor’s agenda as just a cover for the same old Conservative policies: run down public services, slash the welfare state, sell-off public assets and give tax cuts to the wealthiest.

I stood in this race because Labour should not swallow the story that austerity is anything other than a new facade for the same old Conservative plans.

We must close the deficit, but to do so we will make the economy work for all, and create a more equal and prosperous society. Bringing down the deficit on the backs of those on low and average incomes will only mean more debt, more poverty, more insecurity, more anxiety and ultimately more crisis.

We must invest in a more productive economy. Our national infrastructure – energy, housing, transport, digital – is outdated, leaving the UK lagging behind other developed economies. In the Budget, the Chancellor cut back public investment even further.

You cannot cut your way to prosperity. We need to invest in our future. And that takes a strategic state that seeks to shape the economy so that it works for all.

That is the choice for Britain and the choice that Labour must offer.

Jeremy Corbyn is the Labour MP for Islington North and Labour Party leader.

This article was originally published on 7.09.15

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Pictures courtesy of Robert Livingstone

 

The Psychological Impact of Austerity – Psychologists Against Austerity

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A recent report from the Psychologists Against Austerity collective directly links cuts to public services with mental health problems.

Well-established psychological research that explains these links already exists. However, this knowledge has been missing from the debate on austerity so far.

Psychologists are often in a position to see the effects that social and economic changes have on people. We also occupy a relatively powerful position as professionals and therefore have an ethical responsibility to speak out about these effects.

Introduction

The Coalition government since 2010 has implemented a program of cuts to public services and welfare that has disproportionately affected  the most vulnerable people in our society in the name of ‘Austerity’. Measures like the bedroom tax, cuts to disability benefits, the introduction of Universal Credit and cuts to local government, social services and NHS budgets have been presented by the Coalition as necessary to the UK’s economic recovery.

Ideas like ‘the nation has maxed out its credit card’ and austerity as a painful but necessary medicine have been used to frame these policy choices as unavoidable and moral.

We argue that recent cuts are both avoidable and immoral. As psychologists we are often in a position to see the effects that societal and economic conditions have on people.

Psychologists also occupy a relatively powerful position as professionals with access to resources like theory and research and therefore have an ethical responsibility to speak about these effects. Indeed, according to the British Psychological Society (BPS) code of ethics, part of the standard for competence is sensitivity to developments in our social and political context.

It is imperative to take into account the psychological costs of austerity for individuals and communities. Psychological impacts of recent austerity policies have been little discussed in media and policy debates, yet there is clear and robust research linking recent austerity policies with damaging psychological outcomes.

Work at an epidemiological level on social determinants of health like the Marmot Review and The Spirit Level shows robust evidence for the effects of social inequality on health, including emotional well-being. Mental health problems are associated with markers of low income and social economic status in all the developed nations, no matter which indicator is used. There are indications of higher levels of mental health problems following austerity, with a rise in antidepressant prescriptions, and GPs reporting increasing numbers of mental health appointments, and a rise in male suicides.

Since the financial crisis, suicides have increased in European countries that have adopted austerity policies (UK, Greece, Spain and Portugal), but not in those who have protected their welfare state (Iceland and Germany). In this paper, we assume that the emotional well-being of societies and individuals is determined by multiple factors that interact with each another. These include economic, societal, familial, psychological and biological influences.

We use the terms ‘emotional well-being’, ‘distress’ and ‘mental health problems’ rather than ‘mental illness’. This is because there is disagreement about whether emotional difficulties are best understood as a product of individual pathology, or a consequence of toxic environments and difficult life experiences. We use diagnostic terminology as a proxy for a wide range of experiences of distress, which are biographically unique. As psychologists, we believe that the diagnostic and medical understanding of ‘mental illness’ often neglects socioeconomic context.

As Lynne Friedli says:

“Mental health is produced socially: the presence or absence of mental health is above all a social indicator and therefore requires social, as well as individual solutions.”

Psychological research provides evidence for some of the wide range of pathways by which increasing social inequality and austerity increase emotional distress. In this paper, we have outlined well-established pathways to short and long term psychological damage from austerity policies; we have called these ‘austerity ailments’.

They are:

  • Humiliation and shame
  • Fear and distrust
  • Instability and insecurity
  • Isolation and loneliness
  • Being trapped and powerless

Key conclusions

Austerity policies have damaging psychological costs. Mental health problems are being created in the present, and further problems are being stored for the future.

We have identified five ‘Austerity Ailments’. These are specific ways in which austerity policies impact on mental health. These experiences have been shown to increase mental health problems. Prolonged humiliation following a severe loss trebles the chance of being diagnosed with clinical depression. Job insecurity is as damaging for mental health as unemployment.

Feeling trapped over the long term nearly trebles the chances of being diagnosed with anxiety and depression. Low levels of trust increase the chance of being diagnosed with depression by nearly 50 per cent.

These five ‘ailments’ are indicators of problems in society, of poisonous public policy, weakness of social cohesion and inequalities in power and wealth. We also know what kind of society promotes good health.

Key markers are that societies are equal, participatory and cohesive.

Some important indicators of a psychologically healthy society are:

1. Agency
2. Security
3. Connection
4. Meaning
5. Trust

Mental health isn’t just an individual issue. To create resilience and promote wellbeing, we need to look at the entirety of the social and economic conditions in which people live.

Implications and recommendations

The evidence presented in this report indicates that a range of key psychological experiences can be directly linked to public policy, and are sensitive to macro social and economic changes.

It is therefore crucial that policy makers and service developers consider the psychological impacts of current and future policies. Creating the conditions for wellbeing and resilience directly helps to prevent distress in the short and long term, thereby saving resources and reducing suffering.

 We call for:

  • Social policy that works towards a more equitable and participatory society, to facilitate individual well-being, resilient places, and strong communities.
  •  Policy makers to take into account the psychological impacts of macro social and economic changes.
  • A social security system that empowers and supports, rather than punishing people in times of need.
  • Public services to increase focus on preventing distress, improving citizen participation and social justice, as well as help facilitate the five positive indicators above.
  • Co-production to be one such model of public service reform. This approach harnesses individuals’ and communities’ assets and expertise rather than viewing them just as passive recipients of and burdens on services.
  • A community-led approach to mental health and emotional wellbeing that develops collective responses to individual needs and by doing so works to strengthen communities and build on communal resources.

You can read the full briefing paper here.

 

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Benefit cuts “will involve cuts to benefits” shocker

imagesBy Private Eye Political Correspondent Noah Surprise.

There was widespread shock across Britain today that the £12 billion of welfare cuts promised in the Tory election manifesto would turn out to be £12 billion of cuts to the welfare budget.

“We definitely didn’t think these 12 billion worth of cuts would involve people like us,” said one first-time Tory voter, having her child tax credits halved.

“We thought it would only affect those wretched people on those awful benefit shows on Channel 4.” https://upload.wikimedia.org/wikipedia/en/b/bb/Benefits_Street.jpg “We feel utterly betrayed by the Tories,” said another father, who is having his family working tax credits slashed.

“Why didn’t Osborne say these 12 billion worth of cuts would affect me? I naturally assumed it would hit people in the North, guests on the Jeremy Kyle show and muslims. That’s why I voted Tory.”

George Osborne has insisted he’d worked hard to ensure that the cuts to benefits were spread evenly between those people most likely to vote Labour and those most likely to vote Lib Dem.

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See also:

Budget 2015: cuts to make Daily Mail readers wince, but not just yet

The budget: from trickle-down to falling down, whilst holding hands with Herbert Spencer

And finally, a timely reminder of Martin Niemöller’s words on the ultimately self-destructive complicity of bystander apathy, because despots never simply attack and persecute the group of your choosing:

Child protection must not be used for dealing with the symptoms of increased poverty

imagesSocial work academics discuss why we must pause to evaluate the growing need for child protection services amidst austerity.

Authors: Brigid Featherstone (The Open University), Anna Gupta (Royal Hollway, University of London), Kate Morris (The University of Nottingham), Jo Warner (University of Kent), Sue White (University of Birmingham).

According to a recent report by the Joseph Rowntree Foundation, 39% of people in households with children now live below the Minimum Income Standard. The figure has risen by over a third since 2008/09.

Families with children are now at greater risk than any other group of having an inadequate income and the number of homeless families living in bed and breakfast accommodation has risen by 300% over the last five years as a direct result of austerity.

Humiliation, shame, fear, distrust, instability, insecurity, isolation,  loneliness and feelings of being trapped and powerless are widespread features of the social and emotional landscapes of individuals and their families in a world of benefit sanctions, zero hours contracts and precarious housing.

Small wonder that relations between family members, including those between parents and their children, can become increasingly fraught in such circumstances.

Child protection need rising

Meanwhile, figures published last week in CYP Now, using official statistics and new figures obtained under an FOI, show the number of children being looked after by the state rose by 8% under the coalition government. The number of children placed on child protection plans rose by 33% while the number of Section 47 inquiries rose by a staggering 42%.

The links between poverty and a child’s chances of becoming subject to child protection processes or being looked after are undeniable according to the international and national research.

A child in the most deprived decile of neighbourhoods nationally has an 11 times greater chance of being on a child protection plan and 12 times greater chance of being a looked after child than a child living in the most affluent decile.

‘Wholly inappropriate’ use of child protection

We hear regularly about the impact of reduced services and benefit cuts on the capacity of families to cope and to care.

We hear of cash strapped local authorities who do not have the services to support families within communities.

We are, therefore, increasingly concerned that the child protection system is being used in a wholly inappropriate way to deal with the consequences of austerity and of policies that are depriving children and their families of food, housing and basic support services.

The effects of austerity are exacerbated by the continued existence of a risk-averse climate despite increasingly heroic efforts by local authorities to develop more strengths based approaches.

‘Long on blame, short on help’

Thus, families are experiencing practices that are long on blame and short on help in too many instances as a recent conference organised by the Transparency Project, involving lawyers, other professionals and family members, discussed.

The policy commitment to adoption, reaffirmed in recent days, is extremely worrying in a context where many birth families are unable to access what is needed in terms of material, emotional and social supports to care safely.

This is leading to increased concern across the sector and, indeed, more widely.

Pause for thought

Individual court rulings have drawn attention to judicial comments where social workers have been asked to think again about the importance of relational bonds and children’s identities and to desist from social engineering, and the UK has been specifically criticized this year by the Council of Europe for its removal of children from women who have been subject to domestic abuse, or who are suffering from depression (Report 1 Committee on Social Affairs, Health and Sustainable Development, 2015).

Such women are particularly vulnerable in the current climate where services for domestic abuse are very stretched.

The evidence is mounting that we need to pause and make vital links between wider economic and social policies and the harms that children and their families experience. The child protection system must not be a system for dealing with the symptoms of increased impoverishment.

Article first published on Community Care.

The budget: from trickle-down to falling down, whilst holding hands with Herbert Spencer.

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“We are moving Britain from a high welfare, high tax economy, to a lower welfare, lower tax society.”

George Osborne, 8 July 2015

The pro-wealthy and anti-humanist budget indicates clearly that the Conservatives are preoccupied with highlighting and cutting the state cost of sustaining the poorest citizens rather than the costs of subsidising the rich.

I’ve pointed out before that the Conservatives operate a perverse, dual logic: that wealthy people need support and encouragement – they are offered substantial financial incentives – in order to work and contribute to the economy, whereas poor people apparently need to be punished – by the imposition of financial cuts – in order to work and contribute to the economy.

That Osborne thinks it is acceptable to cut the lifeline benefits of sick and disabled people to pay for government failures, whilst offering significant cuts to corporation tax rates; raising the tax-free personal allowance and extending inheritance tax relief demonstrates very clearly that the myth of trickle-down is still driving New Right Conservative ideology, and that policy is not based on material socio-economic conditions and public need. (And Cameron is not a one-nation Tory, despite his claims.)

Research by the Tax Justice Network in 2012 indicates that wealth of the very wealthy does not trickle down to improve the economy, but tends to be amassed and sheltered in tax havens with a detrimental effect on the tax bases of the home economy.

A more recent report – Causes and Consequences of Income Inequality : A Global Perspective by the International Monetary Fund concluded in June this year that there is no trickle-down effect –  the rich simply get richer:

“We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down.”

It’s inconceivable that the Conservatives fail to recognise such policy measures will widen inequality. Conservatives regard inequality and social hierarchy as inevitable, necessary and functional to the economy. Furthermore, Conservatives hail greed and envy as emotions to be celebrated, since these drive competition.

Since the emergence of the New Right, from Thatcher to Cameron, we have witnessed an increasing entrenchment of Neoliberal principles, coupled with an aggressive, authoritarian brand of social conservatism that has an underpinning of crude, blunt social Darwinist philosophy, as carved out two centuries ago by the likes of Thomas Malthus and Herbert Spencer.

Spencer is best known for the expression “survival of the fittest,” which he coined in Principles of Biology (1864), after reading Charles Darwin’s work. Spencer extended natural selection into realms of sociology, political theory and ethics, ultimately contributing to the eugenics movement. He believed that struggle for survival spurred self-improvement which could be inherited. Maslow would disagree. All a struggle for survival motivates is just a struggle for survival.

Spencer’s ideas of laissez-faire; a survival-of-the-fittest brand of competitive individualism; minarchism – minimal state interference in the processes of natural law – and liking for private charity, are echoed loudly in the theories of 20th century thinkers such as Friedrich HayekMilton Friedman and Ayn Rand who each popularised Spencer’s ideas, whilst Neoliberal New Right Conservatives such as Ronald Reagan, Margaret Thatcher and David Cameron have translated these ideas into policies.

Ideology has considerable bearing on policies, and policies may be regarded as overt, objective statements of political intent. I’ve said many times over the past five years that Conservatives have forgotten that democracy is based on a process of dialogue between the public and government, ensuring that the public are represented: that governments are responsive, shaping policies that address identified social needs. Conservative policies are quite clearly no longer about reflecting citizen’s needs: they are increasingly authoritarian, and all about telling us how to be.

Conservatives have always coldly conceived society as a hierarchy of human value, and they have, from their pinnacle of supremacist, self-appointed authority, historically cast the vulnerable and the poorest as the putative “enemies of civilization.” Social Darwinism is written in bold throughout their policies.

Furthermore, such a combination of Neoliberal and Conservative political theory, explicitly opposes democratic goals and principles. Neoliberalism was originally used by academics on the Left as a pejorative to capture the policies of imposed exploitation, privatisation, and inequality.

Neoliberalism is now characterised by the use of international loans and other mechanisms to suppress unions, squash state regulation, elevate corporate privilege, privatise public services, and protect the holdings of the wealthy. The term became widely recognised shorthand for rule by the rich, authoritarianism and the imposition of limits on democracy.

Banks, corporations, the financial sector, and the very wealthy are exercising power and blocking any attempt to restructure the economic system that brought about the crash.

Meanwhile, the free market is a market free for powerful interests; the profit motive has transformed the organising value of social life, and those who the Conservatives evidently regard as collateral damage of this socio-economic dogma made manifest are paying the price for the global crash, with Osborne and the Conservatives constructing narratives that problematise welfare support, generating moral panic and folk devils to demonise the poorest citizens in need of support.

Growing social inequality generates a political necessity for cultivating social prejudices.

Such Othering narratives divert public attention from the fact that the right to a fair and just legal system, a protective and effective safety net for the poorest, free healthcare – all of the social gains of our post-war settlement – are all under attack.

I have said elsewhere that Conservative ideology is incompatible with our legal commitments to human rights. The United Nations declaration of Human Rights is founded on the central tenet that each and every human life has equal worth. The Conservatives don’t agree, preferring to organise society into hierarchies of worth and privilege.

Conservative austerity measures and further impending welfare cuts are not only a deliberate attack on the poorest and most vulnerable social groups; the range of welfare cuts do not conform to a human rights standard; the “reforms” represent a serious failure on the part of the government to comply with Britain’s legal international human rights obligations.

The cuts announced by the chancellor include a further reduction to the benefits cap – not only from £26,000 to £23,000, as promised in the Conservative Party’s 2015 manifesto, but down even further to £20,000 outside of London.

Child tax credit, housing benefit and working tax credit will be reduced, with child tax credit only being paid for the first two children. Presumably this is, to quote Iain Duncan Smith, to “incentivise behavioural change,” placing pressure on the poorest to “breed less,” though personally, being the direct, blunt, no-nonsense sort, I prefer to call it a nudge towards “eugenics by stealth.”

The Social Mobility and Child Poverty Commission say that any cuts to tax credits will cut the incomes of 45 per cent of working families. These cuts are particularly controversial, since the benefits cap was partly justified as a way of “making work pay”  – a Conservative narrative that echoes the punitive 1834 New Poor Law Principle of less eligibility – see: The New New Poor Law.

The Government asserts that its welfare “reform” strategy is aimed at breaking the cycle of “worklessness” and dependency on the welfare system amongst the poorest families. It’s more punitive Poor Law rhetoric.

There’s no such thing as “worklessness”, it’s simply a blame apportioning word, made up by the Tories to hide the fact that they have destroyed the employment market, just as Thatcher did, and as the Conservatives always do.

Punishing the low paid, cutting the income of families who work for low wages directly contradicts the claim that the Conservatives are “making work pay.”

Yet Osborne has framed his welfare cuts with the “The best route out of poverty is work” mantra, claiming that slashing the social security budget by £46 billion in the next five years, (including cutting those benefits to disabled people, who have been assessed as unfit for work and placed in the Work Related Activity Group (WRAG), and cutting in-work benefits, such as tax credits) is needed to make sure “work pays” and that: “we give a fair deal for those on welfare and a fair deal to the people, the taxpayers of this country who pay for it.”

The Conservatives always conveniently divide people into an ingroup of taxpayers and an outgroup of stigmatised others – non-tax payers. However, most people claiming benefits are either in work, and are not paid enough, through no fault of their own, to pay tax, or are pensioners who have worked most of their lives; or are unemployed, but have previously worked and contributed tax.

Most people claiming disability benefits have also worked and contributed tax, too.

Unemployment and in-work benefit claims are generally a measure of how well or poorly the government is handling the economy, not of how “lazy” or “incentivised” people are.

And only the Tories have the cheek to claim that raising the minimum wage (long overdue, especially given the hikes in the cost of living) is the introduction of a living wage. The basic idea is that these are the minimum pay rates needed so that workers have an acceptable standard of living. Over the last few years, wages have very quickly fallen far behind the ever-rising cost of living.

The increase is at a rate of £7.20 an hour for people over the age of 25.  Housing benefit will be withdrawn from those aged between 18 and 21, while tax credits and universal credits will be targeted at people on lower wages by reducing the level at which they are withdrawn.

The chancellor’s announcement amounted merely to an increase in the minimum wage, and the curbs on tax credits would hit low-paid workers in other ways, unfortunately.

Whilst the announcement of a phased increase in the minimum wage is welcome, it is difficult to see how this will reverse the increasing inequality that will be extended as a further consequence of this budget without a matching commitment to improving the structural framework – the quality and stability of employment available. As it is, we are now the most unequal country in EU.

If the government were sincerely interested in raising wages to make work genuinely pay, ministers would be encouraging rather than stifling trade unionism and collective bargaining. But instead we see further cuts to public sector pay in real terms year after year and the raising of the legal bar for industrial action so that strikes will be effectively outlawed in public services. And let’s not forget the grubby partisan policy of two years ago – the Let Lynton Lobby Gagging Act.

Rhys Moore, director of the Living Wage Foundation, said:

“Is this really a living wage? The living wage is calculated according to the cost of living whereas the Low Pay Commission calculates a rate according to what the market can bear. Without a change of remit for the Low Pay Commission this is effectively a higher national minimum wage and not a living wage.”

Those most affected by the extreme welfare cuts are those groups for which human rights law provides special protections. The UK government has already contravened the human rights of women, children, and disabled people.

The recent report of the UK Children’s Commissioner to the UN Committee on the Rights of the Child, published in July this year, says:

“Response to the global economic downturn, including the imposition of austerity measures and changes to the welfare system, has resulted in a failure to protect the most disadvantaged children and those in especially vulnerable groups from child poverty, preventing the realisation of their rights under Articles 26 and 27 [of the UN CRC] … Reductions to household income for poorer children as a result of tax, transfer and social security benefit changes have led to food and fuel poverty, and the sharply increased use of crisis food bank provision by families.”

The parliamentary Joint Committee on Human Rights recently reported on the UK’s compliance with the United Nations Convention on the Rights of the Child (CRC), and found it woefully lacking:

“Welfare cuts will ensure that the government is not in compliance with its international human rights obligations to realise a right to an adequate standard of living under Article 11 of the International Covenant on Economic and Social Rights (ICESR) and a child’s right to an adequate standard of living under Article 27 of the UN CRC. Further it will be in breach of the statutory target to eliminate child poverty contained in the Child Poverty Act 2010.”

Just in case you missed it, there has been a very recent, suspiciously timed change to the definition of child poverty, and a proposed repeal of the Child Poverty Act – something that Iain Duncan Smith has been threatening to bring about since 2013.

It’s yet another ideologically directed Tory budget, dressed-up in the rhetoric of economic necessity, detached from public needs.

And Conservative ideology is all about handouts to the wealthy that are funded by the poor.

Related:

George Osborne’s Political MasterstrokeA View from the Attic

Osborne’s class spite wrapped in spin will feed a backlashSeumas Milne

Budget 2015: what welfare changes did George Osborne announce, and what do they mean?  New Statesman: The Staggers

How Osborne’s new cuts breach the UK’s human rights obligations, Lecturer in Law at Lancaster University

Osborne’s Autumn statement reflects the Tory ambition to reduce State provision to rubble

Osborne’s razor: the Tory principle of parsimony is applied only to the poorest

The BBC expose a chasm between what the Coalition plan to do and what they want to disclose

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Thanks to Robert Livingstone

Quantitative Data on Poverty from the Joseph Rowntree Foundation.

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The minimum cost of living has soared by a quarter – 25% – since the start of the economic downturn, according to a report from the Joseph Rowntree Foundation, which details the true inflationary pressures facing low income households. The research finds families are facing an “unprecedented erosion of household living standards” thanks to rapid inflation and flat-lining wages.

Cuts to benefits and tax credits have exacerbated the problem over the past 12 months, according to the report. Now we are seeing the hard evidence that the Coalition’s “reforms” are pushing employed people in low paid work and unemployed people into absolute poverty, as our welfare system is no longer meeting basic living needs, and Government policy has distorted the original purpose of our social security, using rhetoric about costs to “the tax payer”, whilst carefully excluding the fact from their monologue that most benefit recipients are also tax payers.

A frightening consideration is that this report doesn’t include the latest round of benefit cuts – the very worst of them to date – that were implemented in April of this year. The report was produced prior to then, covering the period up to April, but doesn’t include it.

A quarter of households in the UK already fell short of the income required to reach an adequate standard of living – for them a 25% increase in costs intensifies the everyday struggle to make ends meet. The price of food and goods we need for an acceptable living standard has risen far faster than average inflation. This has combined with low pay increases to create a widening gap between income and needs.

The freeze in child benefit, the decision to uprate tax credits by just 1% and the increase in the cost of essentials faster than inflation mean that a working couples with children an  working lone parents will lose out, making a mockery of the Coalition’s claim of “making work pay”.

Over the past five years:

• Childcare costs have risen over twice as fast as inflation at 37%.
• Rent in social housing has gone up by 26%.
• Food costs have increased by 24%.
• Energy costs are 39% more.
• Public transport is up by 30%.

Some further shocking Key findings from the Poverty and Social Exclusion Project – The Impoverishment of the UK report reveals that:

• Over 30 million people (almost half the population) are suffering some degree of financial insecurity.
• Almost 18 million people cannot afford adequate housing conditions.
• Roughly 14 million cannot afford one or more essential household goods.
• Almost 12 million people are too poor to engage in common social activities considered necessary by the majority of the population.
• About 5.5 million adults go without essential clothing.
• Around 4 million children and adults are not properly fed by today’s standards.
• Almost 4 million children go without at least two of the things they need;
• Around 2.5 million children live in homes that are damp.
• Around 1.5 million children live in households that cannot afford to heat their home.

Since 2010, wages have been rising more slowly than prices, and over the past 12 months, incomes have been further eroded by cuts to benefits and tax credits. Ministers argue that the raising of the personal tax allowance to £10, 000 for low income households will help, however, the report says its effect is cancelled out by cuts and rising living costs.

I would add that for many who are low paid, and the increasing numbers of part-time workers, this political gesturing is meaningless. The policy only benefits those who earn enough to pay tax. Most of this group are affected by the benefit cuts – many have to claim housing benefit and council tax benefit, and they are therefore likely to be affected by the bedroom tax and the poll tax-styled reductions to benefits under the Localism Bill, to compound matters.

It has to be said that the greatest percentage change in net income from the personal tax free allowance of £10,000 is seen by those on the upper end of the income scale – not, as is often claimed, low earners. This does explain the policy. Increasing the personal allowance serves to increase the gap between the those on the lowest incomes and those on  middle range incomes, resulting in low income households falling further into poverty.

At the low paid end of salaried work there are a cohort of workers trapped in a cycle of very poorly paid, low – skilled work, zero hour contracts, with few, if any, employee rights. They tend to work for a few months here and there, in work that is often seasonal. There is no opportunity for saving money or hope of better employment prospects.

This group of workers tend to live hand to mouth from one pay day to the next, so have no opportunity to build a reserve when the contract ends, there is nothing in reserve.

The net result is that it is increasingly very difficult for low-to-middle income families to balance the weekly budget. There is now a widening gulf between public expectations of a minimum decent living standard and their ability to earn enough to meet it. I would add that the gap between low and middle income families is widening, and will continue to do so because of the impact of policies that have recently been implemented.

Welfare support is one of the hallmarks of a civilised society. All developed countries have such support for the vulnerable, and the less developed ones are striving to establish their own. Welfare states depend on a fair collection and redistribution of resources, which in turn rests upon the maintenance of trust between different sections of society and across generations. Most of us have paid for our own welfare.

It’s a common rhetorical trick for politicians is to talk about “looking after the tax payer.” However the reality is that they are often only really concerned with particular tax payers – the electoral groups that determine the outcomes of elections – often people on middle-incomes. They talk as if tax payers are some hard-pressed group who are burdened by the poor and that the rest of us don’t pay taxes.

But the reality is that there are many different taxes (the Institute of Fiscal Studies counted at least 25). Also the poorest people don’t just pay tax, they often pay the most tax. Not just indirect taxes, like VAT, but also income tax and council tax. Many other taxes are hidden from view in duties or other background taxes like Employer’s National Insurance.

Most assume that the rich pay a much higher rate of tax than the poor. After all the income tax system is meant to place progressively higher burdens on people with higher incomes. However, when you look at the rates of tax paid by each household it is very surprising.

The highest rate of tax, that is the share of income lost in tax, is paid by the poorest 10% of households (or families). The poorest 10% of families pay 45% of their income in tax. The other 90% of families pay quite a similar rates of tax, varying between 31% and 35%.

The three things to remember when politicians talk about tax:

1. Tax payers are not a special class of people – we are all tax payers.
2. Tax payers are not burdened by the poor – the poor are actually super tax payers.
3. Tax cuts come in many different shapes and sizes – not everybody benefits equally. The wealthiest profit the most.

(Information taken from here)

Office for National Statistics logo 

Statisticians hold two basic definitions of poverty – relative poverty is a measure which looks at those well below the median average of income (60% of income) – who are excluded from participating in what society generally regards as normal activities. This kind of poverty is relative to the rest of society, and is the type that we have seen and measured since the welfare state came into being.

Absolute poverty refers to a level of poverty beyond the ability to afford the essentials which we need simply to live and survive. People in absolute poverty cannot afford some of the basic requirements that are essential for survival. It is horrifying that this is now the fastest growing type of poverty in Britain, according to research bodies such as the Institute for Fiscal Studies (IFS) and Joseph Rowntree Foundation.  When the IFS produced its report on growing child poverty, David Cameron’s callous, calculated  and unflinching reaction was to question the figures, rather than accept the consequences of his Government policies on citizens.

And it IS calculated and deliberate legislative spite. The Government’s own impact assessment has demonstrated that the 1% uprating in the Welfare Benefits Up-rating Act will have a disproportionate effect on the poorest. Families with children will be particularly hard hit, pushing a further 200,000 children into poverty. In addition, those with low to middle earnings and single-earner households will be caught by the 1% limit on tax credit rates. These new cuts come on top of the cumulative impact of previous tax, benefit and public expenditure cuts which have already meant the equivalent to a loss of around 38% of net income for the poorest tenth of households and only 5% for the richest tenth.

According to a TUC report, average wages have dropped by 7.5 per cent since the Coalition came into office. This has a direct impact on child poverty statistics, which the government has conveniently ignored in its latest, Iain Duncan Smith-endorsed, child poverty figures.

Child poverty is calculated in relation to median incomes – the average income earned by people in the UK.

If incomes drop, so does the number of children deemed to be in poverty, even though – in fact – more families are struggling to make ends meet with less money to do so.

This is why the Department for Work and Pensions has been able to sound an announcement that child poverty in “workless” families (which translates from Tory propaganda-speak to “victims of the Government- induced recession”) has dropped, even though we can all see that this is nonsense.

As average incomes drop, the amount received by  families not in work – taken as an average of what’s left – appears to rise, even though, as we know, the increase is not even keeping up with inflation any more.

Liam Byrne said: “The Institute of Fiscal Studies report shows that the price of ministers’ failure on child poverty isn’t just a million more children growing up poor – it’s a gigantic £35 billion bill for the tax payer. It’s not just a moral failure, but an economic disaster.”

“Ministers should be doing everything they can for struggling families but instead they are slashing working families’ tax credits whilst handing a massive tax cut to the richest people in the country. That tells you all you need to know about this Government’s priorities.”

And – “Not only is there a cost attached to rising levels of child poverty but the trend is illegal. Left unabated child poverty will reach 24% in 2020, compared with the goal of 10% written in law.”

Iain Duncan Smith, the welfare and pensions secretary, has publicly questioned whether poverty targets are useful – arguing that “feckless” parents only spend money on themselves. The spirits of Samuel Smiles, Thomas Malthus and David Ricardo, they of the workhouse mentality, speak clearly in booming voices through Iain Duncan Smith from across the centuries.

And of course the Department for Work and Pensions ludicrously continue to blame the previous Administration. We know, however, that the research here shows starkly that poverty has risen under this Government, and we are now seeing cases of childhood malnutrition, such as scurvy.

The breakfast clubs established under the previous Labour Government, as a part of the Extending Schools program and Every Child Matters Bill often provided crucial meals, particularly  for children who relied on school provision  – in fact, for one in four of all UK children, school dinners are their only source of hot food. Malnutrition is rising and schools see children coming in hungry.

The previous Government recognised the importance of adequate nutrition and saw  the link between low educational attainment, behavioural difficulties and hunger in school. The breakfast club provision also helped parents on low incomes in other ways, for example, the free childcare that these wrap-around services provided is essential to support them to keep on working.

There are further issues worth a mention from Osborne’s Comprehensive Spending Review, that are not in the report. They are worth a mention not least because they tell you all you need to know about the Coalition. They speak volumes about Tory-led intention, malice and despicable aims. They expose the lie once again that the Tories “support” the most vulnerable citizens.

I’m very concerned about Osborne’s plans to set a cap on benefits spending. This cap will include disability benefits, but exclude spending on the state pension. Disabled people have already faced over £9 billion of cuts to benefits they rely on, with at least 600,000 fewer expected to qualify for the new Personal Independence Payment, which is replacing disability living allowance, and over 400,000 facing cuts to their housing benefit through the bedroom tax. Disabled people of working age have borne the brunt of cuts, and the Government is once again targeting those who can least afford to lose out.

By including “Disability Benefits” in the cap, the Government have signalled clearly that they fully intend severing any remaining link between social security and need. We are hurtling toward a system that is about eradicating the cost of any social need. But taxation hasn’t stopped, however, public services and provisions are shrinking.

Barely a month now passes without one of David Cameron’s ministers being rebuked for some act of statistical chicanery (or, indeed, the Prime Minister himself). And it’s not just the number crunchers at the UK Statistics Authority who are concerned. An alliance of 11 churches, including the Methodist Church, the Quakers and the Church of Scotland, has written to Cameron demanding “an apology on behalf of the Government for misrepresenting the poor.”

Many people have ended their lives. Many people have died because of the sustained attack from our Government on them both psychologically and materially, via what ought to be unacceptable, untenable and   socially unconscionable policies. People are going without food. People are becoming homeless. There are people now living in caves around Stockport The UK is the world’s six largest economy, yet 1 in 5 of the UK population live below the official poverty line, this means that they experience life as a daily struggle for survival.

And this is because of the changes this Government is making. And we are allowing them to do so. Unless we can form a coalition with other social groups in our society, we are unlikely to influence or produce enduring, positive political change. But that will only happen once others realise that they are not exempt from the devastating changes, or the long term consequences of them. It’s down to us to ensure that the public are informed, since the maintream media have abdicated that responsibility.

The author of the Joseph Rountree Foundation report, Donald Hirsch, says the cumulative effect is historically significant:

From this April, for the first time since the 1930s, benefits are being cut in real terms by not being linked to inflation. This combined with falling real wages means that the next election is likely to be the first since 1931 when living standards are lower than at the last one.”

Further reading:

Briefing on How Cuts Are Targeted

Who Really Benefits from Welfare?

  • The system make little difference to the incomes of the poorest
  • People in poverty pay the highest rates of tax
  • It is hardest for the poorest to earn, save and be a family
  • Most money actually goes to the better-off.

    (This article was taken from a longer piece of work: Poverty and Patrimony – the Evil Legacy of the Tories.)

1017174_500690710000462_512008904_nThanks to Robert Livingstone for his brilliant artwork