Tag: Child Poverty

George Osborne ignored civil servants’ warnings of increased child poverty due to 1% public sector cap

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Back in July 2015, George Osborne, then chancellor, announced that the 1% public sector pay cap would be extended for four years – a policy that had not been included in the Conservative manifesto. The cap remained in force until the 2018/19 pay round.

Documents released under the Freedom of Information Act show that Osborne had received advice from civil servants warning him that the policy would “make it more difficult for low-income families with children to access essential goods, and will therefore make it harder for the government to hit the Child Poverty Act targets.”

Authoritarian Osborne ignored civil servants’ warnings that extending the public sector pay cap would force children into poverty, the newly released documents reveal. Civil servants also warned that extending the cap “could increase financial pressure on families of public sector workers which may have a negative impact on family relationships”.

The previously undisclosed warnings are contained in a ministerial decision record obtained by GMB union. The papers reveal that ministers had also considered freezing public sector pay for two years. 

The Treasury released the paper to GMB after a prolonged delay and following being instructed to respond to the GMB by the information commissioner. Rehana Azam, GMB’s national secretary, said the pay freeze had a devastating impact on the union’s members for many years.

Osborne’s policy has directly affected over a million families with children. There are an estimated 2.4 million dependent children in households in which there is at least one public sector worker in the UK.

Azam went on to say : “This document is a mark of shame on ministers who imposed years of real-terms pay cuts in the full knowledge that it would condemn families and children to poverty.

“If Theresa May is serious about ending ‘burning injustices’, she must use this budget to reverse the fall in living standards that this government has imposed on ordinary working people.”

It emerged earlier this month that the cap on benefits, also imposed by Osborne in 2015, will mean that low-income families will miss out on an extra £210 a year from April. Analysis by the Resolution Foundation highlighted that more than 10m households will face a real-terms loss of income from the government’s austerity measures, introduced when Osborne was chancellor. It was also reported this week that Philip Hammond, Osborne’s successor, is considering imposing regional public sector pay rates. However, similar proposals were defeated in the 2010 to 2015 parliament.

A Whitehall source confirmed that the Treasury is considering overhauling the system to allow greater regional variation in pay rises. The chief secretary to the Treasury, Liz Truss, reportedly told the cabinet that pay rises should be ‘determined by retention, performance and productivity.’

The reasoning means that those working in London and the south-east could receive greater increases because pay in other regions is already more “competitive” with private sector levels, the source confirmed.

Meanwhile, Hammond is under increasing pressure to loosen curbs on spending after May used her conference speech in Birmingham to tell voters that next year’s spending review would mark the end of almost a decade of austerity.

George Osborne was contacted for comment and has not responsed at the time of writing.

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Have your say on the Welfare Reform and Work Bill

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Do you have relevant expertise and experience or a special interest in the Welfare Reform and Work Bill which is currently passing through Parliament?

If so, you can submit your views in writing to the House of Commons Public Bill Committee which is going to consider this Bill.

Welfare Reform and Work Bill 2015-16

Aims of the Welfare Reform and Work Bill

The Government website claims that the Bill would make provision about reports on progress towards full employment and the apprenticeships target; to make provision about reports on the effect of certain support for troubled families; to make provision about social mobility; to make provision about the benefit cap; to make provision about social security and tax credits; to make provision for loans for mortgage interest; and to make provision about social housing rents.

However, many of us see the Bill as a further economic attack on Britain’s poorest families. I’m concerned it includes many measures that risk trapping more children into poverty.

Beyond the well-publicised cuts to tax credits, which will leave many families on low wages struggling to buy basics, the government also plans to cap benefits. For the moment this will be set at £20,000 (£23,000 in Greater London), but a clause in the Bill allows the government to change the amount in future too – without consulting parliament. This paves the way for the threshold to sink ever lower, consigning children from larger families to the breadline without any democratic scrutiny or safeguarding.

Perhaps the most worrying element of the Bill is the government’s decision to abandon the duty to end child poverty by 2020. Instead this Bill would redefine “poverty”, scrapping income as the way we measure being poor and replacing it with worklessness, addiction and educational attainment. Given that two-thirds of our poorest children already live in low-paid “working” families, this is a completely unacceptable way to measure hardship. Furthermore, addiction is not a class-based problem, it affects wealthy people too, in fact substance abuse – especially alcohol related – is something that affects people who aren’t in poverty more than those who are. As for educational attainment, well Iain Ducan Smith has no qualifications, but he isn’t poor. I’ve a first degree and a Masters and I am poor.

If the causes of poverty, according to Duncan Smith, were in any way correct, we’d see the same people on the dole, year in year out. But we don’t. Instead we see  a “revolving door” of claims from people who take low paid, insecure work for months or a couple of years at the most and end up out of work again. Through no fault of their own. This revolving door is consistent with the structural explanation of povertythat government decision-making and socieconomic circumstances are the causes poverty.

This Bill would make the government dramatically less accountable for its policies, leaving poor families worse off and limiting children’s life chances.

Javed Khan
Chief executive, Barnardo’s

Other Briefings

Welfare Reform and Work Bill 2015 final – Unison

Welfare Reform and Work Bill: what might this mean for carers – Carers UK

Briefing: Welfare Reform & Work Bill – Shelter England

Joseph Rountree Foundation: Welfare Reform and Work Bill: Second Reading | JRF

Briefing on the Welfare Reform and Work Bill FINAL -TUC

The Children’s Society Briefing: House of Commons Second Reading of the Welfare Reform and Work Bill

Follow the progress of the Welfare Reform and Work Bill

The Bill was presented to the House on 9 July 2015. On Monday 20 July, the Bill received its Second Reading in the House of Commons where MPs debated the main principles of the Bill.

The Bill has now been sent to the Public Bill Committee where detailed examination of the Bill will take place. The Bill Committee is expected to hold its first oral evidence session on 10 September.

Guidance on submitting written evidence

Deadline for written evidence submissions

The Public Bill Committee is now able to receive written evidence. The sooner you send in your submission, the more time the Committee will have to take it into consideration. The Committee is expected to meet for the first time on Thursday 10 September; it will stop receiving written evidence at the end of the Committee stage on Thursday 15 October.

Please note: When the Public Bill Committee reports, it is no longer able to receive written evidence and it could report earlier than Thursday 15 October 2015.

What should written evidence cover?

Your submission should address matters contained within the Bill and concentrate on issues where you have a special interest or expertise, and factual information of which you would like the Committee to be aware.

Your submission could most usefully:

  • suggest amendments to the Bill with explanation; and
  • (when available) support or oppose amendments tabled or proposed to the Bill by others with explanation

It is helpful if the submission includes a brief introduction about you or your organisation. The submission should not have been previously published or circulated elsewhere.

If you have any concerns about your submission, please contact the Scrutiny Unit (details below).

How should written evidence be submitted?

Your submission should be emailed to scrutiny@parliament.uk. Please note that submissions sent to the Government department in charge of the Bill will not be treated as evidence to the Public Bill Committee.

Submissions should be in the form of a Word document. A summary should be provided. Paragraphs should be numbered, but there should be no page numbering.

Essential statistics or further details can be added as annexes, which should also be numbered. To make publication easier, please avoid the use of coloured graphs, complex diagrams or pictures.

As a guideline, submissions should not exceed 3,000 words.

Please include in the covering email the name, address, telephone number and email address of the person responsible for the submission. The submission should be dated.

What will happen to my evidence?

The written evidence will be circulated to all Committee Members to inform their consideration of the Bill.

Most submissions will also be published on the internet as soon as possible after the Committee has started sitting.

The Scrutiny Unit can help with any queries about written evidence.

Scrutiny Unit contact details

Email: scrutiny@parliament.uk
Telephone: 020 7219 8387
Address: Ian Hook
Senior Executive Officer
Scrutiny Unit
House of Commons
London SW1A OAA

Lies, Damn Lies and the Welfare Debate – Emily Thornberry

proper Blond

Originally published in the Huff Post on 13 July, 2015

Next week the Government plans to bring forward a new Bill on welfare reform – the latest salvo in the Tories’ ongoing war of attrition on our welfare state and the principles that underpin it.

Softening up the ground for this next round of cuts, which will go further and deeper than anything we’ve seen so far, was a column written jointly by George Osborne and Iain Duncan Smith and published in the Sunday Times a few weeks ago.

The piece, which reads like a greatest hits compilation of clichéd Tory platitudes on welfare spending, was so shot through with errors, misleading implications and flat-out lies that it set the tone for the most ill-informed debate in recent memory.

So in the interest of setting the record straight, I’ve picked out my top eight tall Tory tales (there are many more than eight, but as space is limited I’ve kept myself to the worst offenders) and put them together with the actual facts. Without a willing handmaiden in the Murdoch press empire to help me, I’m relying on you to spread the word:

Lie number one:
“This country accounts for 7% of all welfare spending in the world, although we have just 1% of its population and produce 4% of its GDP.”

Even if you accept that these figures are accurate (and there’s no reason why you should – Osborne and Duncan Smith did not provide a source and I haven’t been able to find one) the implication – that we are spending more than we should because our welfare budget is out of proportion to our share of the global population – is ridiculous because it does not compare like with like.

To say that we spend more on welfare per head than, say, Somalia or Zimbabwe tells you nothing more than the fact that we have an advanced, industrialised economy, a domestic tax base, an established democracy and a modern welfare state, which many countries do not.

A much more valuable comparison would be between the UK and other industrialised democracies, for example within Europe. A comparison with the rest of Europe puts us below the average in terms of welfare spending as a proportion of GDP.

Lie number two:
Under Labour “Britain’s welfare bill was fast becoming completely unsustainable.”

Taking as a measure of “sustainability” the amount we spend on social security as a proportion of GDP (the most widely used measure), welfare spending stayed virtually flat during Labour’s time in office. Between 1998-99 and 2008-09 welfare spending represented on average 10.7% of GDP, never deviating more than 0.2% from this figure in any given year.

When the global financial crisis hit the proportion rose to 13% – a significant rise which nonetheless was neither surprising nor particularly concerning, given the historic tendency for welfare spending to rise during a depressed economy and fall back down to normal levels with the return of economic growth.

It’s also a bit rich for the Tories to preach about an increasing welfare budget when the bulk of social security expenditure in the UK goes to pensioners, an area where the Tories have increased spending, not cut it.

Lie number three:
“Not that any of this debt-fuelled largesse improved lives.”

Maybe not the lives of anybody the authors knew, but the truth is that, largely thanks to the support Labour provided to low-income working families through tax credits (which Osborne is about to gut), child poverty fell by a third under Labour – equivalent to more than a million children lifted out of poverty.

IDS may be busy redefining poverty so he can pretend it doesn’t exist, but I think most people can still understand that poverty is real, that it isn’t a good thing and that a person moving out of poverty would normally consider the change an improvement in their life.

Lie number four:
“The welfare system we inherited in 2010 trapped people in dependency and actively discouraged claimants from seeking work. All too often, those who worked hard and did the right thing were punished – while those who did the wrong thing were rewarded.”

Presumably what the authors mean by “doing the right thing” is working. But despite their best efforts to draw an artificial dividing line between “work” and “welfare”, the reality is that most people of working age who claim some kind of benefit do work. For example, more than two thirds of people claiming tax credits are employed, and tax credits account for around 50% of all spending on working-age welfare. Meanwhile, benefits specifically for people who are out of work, like Jobseeker’s Allowance and Income Support, make up just 3% of such spending.

The fact of the matter is that when governments fail – as the Tories have done – to tackle the root causes of working peoples’ need for welfare support, like low pay and high rents, the number of working people relying on benefits increases. For example, the proportion of housing benefit claimants who are employed has doubled since the Tories took office in 2010.

Lie number five:
“The new benefit cap of £26,000 a year means that no household can receive more in out-of-work benefits than the average working family earns, a simple matter of fairness.”

The Tories’ cap has nothing to do with fairness, as demonstrated by the fact that their new Bill abolishes the cap’s link with average earnings and gives Ministers carte blanche to lower the cap arbitrarily, at any time and for any reason.

Their cap also takes an across-the-board approach, affecting many more people who aren’t able to work – including people with disabilities, single mothers with young children and people with full-time caring responsibilities for sick or severely disabled relatives – than people who are.

Lie number six:
“We also took action to cap the rise in benefits so it was in line with the incomes of those in work.”

They did no such thing. Since 1980, the main out-of-work benefits have risen in line with prices, rather than earnings. So Jobseeker’s Allowance fell from being worth a fifth of average earnings in 1980 to a tenth in 2010.

Lie number seven:
“In 1980, working age welfare accounted for 8% of all public spending. In 1990, when Margaret Thatcher left office, it was still under 10%. But by 2010 it had risen to nearly 13% of public spending.”

Similar to lie number two, but since the lie is repeated (or, to put it more charitably, the highly selective and misleading half-truth) the truth might as well be repeated too. As noted, welfare reform stayed virtually flat under Labour until a sudden increase was brought about as a result of a recession – just as had happened in the early 1990s under John Major’s Government.

Lie number eight:
“This government was elected with a mandate to implement further savings from the £220 billion welfare budget.”

They most certainly were not. The Tories ran on a manifesto promising £12billion worth of welfare cuts, a figure which no-one took seriously in large part because they failed to specify where the savings would come from.

Happy myth-busting, readers!

Emily Thornberry.

___

See also:

The reasons why we can’t afford not to have a welfare state are not ideological: they are practical – A brief history of social security and the reintroduction of eugenics by stealth

The welfare state: from hung, drawn and quartered to Tory privatisation

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

14533697838_dffcc736f2_o (1)Pictures courtesy of Robert Livingstone

The Coalition are creating poverty via their policies

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“David Cameron and George Osborne believe the only way to persuade millionaires to work harder is to give them more money.

But they also seem to believe that the only way to make ordinary people work harder is to take money away.”

Ed Miliband.

Source: Hansard, December 12, 2012.

The largest study into poverty in the UK has prompted fresh urges for the government to take measures to tackle growing levels of poverty. The Poverty and Social Exclusion in the United Kingdom (PSE) project is a collaboration between the University of Bristol, University of Glasgow, Heriot Watt University, Open University, Queen’s University (Belfast), University of York, the National Centre for Social Research and the Northern Ireland Statistics and Research Agency.

The project commenced in April 2010 and will run for three-and-a-half years. The research has revealed that inequality in the UK is growing.

The research paper presents an analysis of child poverty and social exclusion in the UK, drawing on data from the 2012 Poverty and Social Exclusion Survey and is the final report on this element of the PSE project. It advances the measurement of child poverty by using three different measures: a child deprivation measure, based on socially perceived necessities, the conventional income poverty measure (but with a more realistic equivalence scale) and a PSE measure which combines deprivation and low income.

The research finds the rates of child poverty for each measures are similar at 30%, 33% and 27% respectively. It also finds, from a new analysis of intra-household distribution, that child deprivation would be much higher if parents were not sacrificing their own living standards for the sake of their children. Analysing the characteristics of poverty, it confirms that a majority of poor children are now living in households with someone in employment.

Perhaps this is the most interesting revelation unearthed by the report: the fact that most of the people living in poverty are employed, dispelling the myth perpetuate by Tory ministers that poverty is a consequence of “worklessness”.

The research found that the majority of children living below the breadline live in small families with at least one employed parent.

Almost 18 million people are unable to afford adequate housing, while one in three do not have the money to heat their homes in winter.

Professor David Gordon said: “The Coalition government aimed to eradicate poverty by tackling the causes of poverty. Their strategy has clearly failed. The available high quality scientific evidence shows that poverty and deprivation have increased since 2010, the poor are suffering from deeper poverty and the gap between the rich and poor is widening.”

We know that benefit delays and the grossly punitive sanction regime are causing dire hardship for people who claim out-of-work benefits, including disabled people  who are deemed unfit for work by their doctor.

We are not simply talking about relative deprivation, here, which is more of a statement about degrees of social exclusion. We are talking about absolute poverty, which is a measure of how many can’t afford basic necessities to support life – food, fuel and shelter.

There are many current studies about poverty, all of which conclude pretty much the same: that poverty and inequality are rising, that people are struggling to meet their most basic needs, and that those who were already the poorest citizens have been hit the hardest by Coalition cuts

The problem isn’t that the government “aren’t doing enough” to tackle poverty: the real problem is that Tory policies are creating poverty.

Three things are immediately clear. Firstly, without the ramping up of VAT in 2010, to 20%, Osborne would be in even more dire financial straits right now. Secondly, income tax has, despite apparently rising employment, failed to increase. Thirdly, corporation tax, targeted for cuts, year after year, has slumped.

The tax system is increasingly veering toward very regressive – biased in favour of the wealthy – consumption taxes, and failing to deliver fairer taxes on income. This is a result of government policy, increasing VAT but cutting corporation tax, and the engineered kind of “recovery” we have ended up with.

We know that austerity is not an economic necessity, as claimed by the Coalition: it’s a Tory ideological preference, aimed at fulfilling a Tory obsession: “shrinking the State“.

We also know that Cameron, who rested all of his political credibility on “paying down the debt” hasn’t done so. In fact, he’s increased it, and the Coalition have borrowed more in just the first three years in Office than the Labour Party – faced with a global banking crisis – did in their entire thirteen years in Office.

If we scrutinise the Coalitions’s policies, which very clearly reflect their ideology, it becomes difficult to see how they could do anything but create inequality and poverty:

These cuts, aimed at the poorest, came into force in April 2013:

  • 1 April – Housing benefit cut, including the introduction of the bedroom tax
  • 1 April – Council tax benefit cut
  • 1 April – Legal Aid savagely cut
  • 6 April – Tax credit and child benefit cut
  • 7 April – Maternity and paternity pay cut
  • 8 April – 1% cap on the rise of in working-age benefits (for the next three years)
  • 8 April – Disability living allowance replaced by personal independence payment (PIP)
  • 15 April – Cap imposed on the total amount of benefit working-age people can receive.

At the same time, note the Tory “incentives” for the wealthy:

  • Rising wealth – 50 richest people from this region increased their wealth by £3.46 billion last year to a record £28.5 billion.
  • Falling taxes – top rate of tax cut from 50% to 45% for those earning over £150,000 a year. This is 1% of the population who earn 13% of the income.
  • No mansion tax and caps on council tax mean that the highest value properties are taxed proportionately less than average houses.
  • Benefited most from Quantitative Easing (QE) – the Bank of England say that as 50% of households have little or no financial assets, almost all the financial benefit of QE was for the wealthiest 50% of households, with the wealthiest 10% taking the lions share
  • Tax free living – extremely wealthy individuals can access tax avoidance schemes which contribute to the £25bn of tax which is avoided every year,as profits are shifted offshore to join the estimated £13 trillion of assets siphoned off from our economy.
  • Millionaires were awarded a “tax break” of £107,000 each per year.

This year, research from the Office of National Statistics showed that the quantity of food bought in food stores also decreased by 1.5 per cent year-on-year in July.

It doesn’t take a genius to work out that repressed, stagnant wages and RISING living costs are going to result in reduced sale volumes. Survation’s research in March this year indicates that only four out of every ten of UK workers believe that the country’s economy is recovering. But we know that the bulk of the Tory austerity cuts were aimed at those least able to afford any cut to their income.

Once again, what we need to ask is why none of the mainstream media articles, or the Office of National Statistics account, duly reporting the drop in food sales, have bothered to link this with the substantial increase in reported cases of malnutrition and related illnesses across the UK.

It’s not as if this correlation is a particularly large inferential leap, after all.

No-one should be hungry, without food in this country. That there are people living in a politically imposed state of absolute poverty is unacceptable in the UK, the world’s sixth largest economy (and the third largest in Europe). This was once a civilised first-world country that cared for and supported vulnerable citizens. After all, we have paid for our own welfare provision, and we did so in the recognition that absolutely anyone can lose their job, become ill or have an accident that results in disability. This is a Government that very clearly does not reflect the needs of the majority of citizens.

It is also unacceptable in a so-called liberal democracy that we have a Government that has persistently denied the terrible consequences of their own policies, despite  overwhelming evidence that the welfare “reforms” are causing people, harm, distress and sometimes, death. Furthermore, this is a Government that has systematically employed methods to effectively hide the evidence of the harm caused to others as a consequence of their devastating, draconian “reforms” from the public. This clearly demonstrates an intention to deceive, and an intention to continue causing people harm.

Cameron told us in 2012, in a rare moment of truth (albeit an unintentional one),  that he is raising more money for the rich. That money has been raised because as their policies indicate clearly, the Tories have taken it from the poorest.

How many policy-related deaths does it take to change a government?

What will it take for the wider public to recognise a despotic regime for what it is: a government that does not democratically reflect the needs of most citizens in the UK, one that is inflicting unforgivable punishment on those that our society once protected?

What kind of government causes harm to citizens?

With the hierarchical ranking in terms of “deserving” and “undeserving” poor, the artificial and imposed framework of Social Darwinism: a Tory rhetoric of division, where some people’s worth matters more than others, how do we, as conscientious campaigners, help the wider public see that there are no divisions based on some moral measurement, or character- type: there are simply people struggling and suffering in poverty, who are being dehumanised by a callous, vindictive Tory government that believes, and always has, that the only token of our human worth is wealth.

Tory policies ensure that the wealthy are rewarded with more wealth and they punish the poorest with grinding, unforgiving, unforgivable absolute poverty.

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