I can’t say for sure that you saw it here first, but I’ll state it plainly: The government’s below-inflation benefits increase, coupled with the changes it is already bringing in, will break Britain’s economy altogether.
Companies up and down the UK will go out of business and nobody will take over from them. The cuts mean £40 billion will be removed from the economy this year – and, with no coherent plan to invest in jobs and growth, this means trouble for everyone. Even the fat cats who think they’re insulated.
I have covered the evidence in my previous few articles. The fact is that the working poor and those on benefits underpin the British economy. Without them, it cannot function. They spend most, if not all, of the money they receive, rather than seeding it away in banks or foreign tax havens, like the big businesspeople the government of millionaires has done so little to curb.
But benefits and wages are being cut, in real terms. Many people will find it hard to hold onto their homes because of the bedroom tax, cuts in housing benefit to meet the demands of the benefits cap, and increases in tax bills because Council Tax Benefit is to stop. Those buildings will remain empty because people will not be able to afford the cost of moving in. We will have legions of homeless people shuffling through one ghost town after another.
Malnourishment will increase. The average cost of groceries has risen by 17 per cent in the last two and a half years. No wonder our children have rickets.
So sickness and disability will increase – but those claiming disability benefits are among the most persecuted in this country, with the last recorded figure showing an average of 73 deaths every week in this part of society.
All because greedy private employers don’t want to pay their workforce enough money to cover their outgoings.
Sickening, isn’t it? People whose incomes have risen by more than 800 per cent over the past 30 years begrudge the 27 per cent rise their workers have had in the same time, and want to push those wages down still further.
That is why the Benefits Uprating Bill is going through Parliament. That is why Iain Duncan Smith is pushing through his punitive changes to the social security system – to create insecurity. Because people who fear that their jobs might be taken by somebody else are less likely to ask for a raise.
That is why our nearly-1,000-year-old civilisation is about to land on its arse.
If you think I’m overstating matters, think again. The UK economy contracted by 0.3 per cent in the last three months of 2012, according to the National Institute of Economic and Social Research (NIESR). And the figures relating to the government’s changes were reeled out during the debate on the Benefits Uprating Bill by the following MPs.
“We have to ask ourselves whether we want to continue to support a situation in which private employers in particular do not want to pay a living wage to the staff that they employ in order to make profits,” said Ian Mearns.
“Since this Government took office, the cost of the average weekly shopping basket has risen by 17 per cent.” (Michael McCann)
“People on low incomes tend to spend locally and to spend all their money. The Welsh economy is overwhelmingly made up of small businesses… Working tax credit reductions will suck demand out of local economies and make matters even more difficult for small businesses struggling to survive in the recession.” (Hywel Williams)
“It is estimated—the IMF is the source — that these benefit cuts will contribute to a £40 billion reduction in the country’s output when we desperately need the opposite to happen.” (Steve McCabe)
“The Treasury confirmed that the working tax credit lost in 2013-14 by people who are working full time on the minimum wage, due to the Government’s freezes and the increase in the earnings taper, will be £475 for a single person with no children and £660 for a couple with one child. Contrary to the assertions made in Parliament, the amount of working tax credit lost by families with one earner on the minimum wage will be greater than their saving of £420 in 2013-14 from the increase in the personal tax allowance.” (Yvonne Fovargue)
“The more people there are taking cuts to their tax credits and take-home pay, the fewer people there are spending in local economies. In an area such as mine, where there is a high proportion of small businesses that employ many people from the local area, that is devastating.” (Lisa Nandy)
“The policy is not only unfair but economically inept. As many have pointed out, people on the lowest incomes spend their money in local economies, and the last thing that we need is a further contraction in demand in local economies.” (Nic Dakin)
And Julie Hilling said: “The IMF has already warned the Government that their annual cut of £24 billion to benefits and tax credits will reduce economic output by up to £40 billion. Not only are they heartless; they are incompetent too.
“The way to get down the benefits bill is to get people into decently-paid work. By already having a double-dip recession and heading for a triple dip, the Government have demonstrated that we cannot cut our way out of a recession — we have to grow our way out.
“Punishing the poor and bringing them to desperation will not grow the economy; it will simply make it worse.”
Reblogged this on HUMAN RIGHTS & POLITICAL JOURNAL.
I think you’re right in principle but wrong about the reasons. If the benefits system can be made redundant by being impossible to claim, people can’t rely on it. What’s their alternative? Well, Unum, the American insurance company with the long established criminal history in the field of disability denial (Google for Unum scandal) have been acting as consultants on ‘welfare reform’ since Peter Lilley got them in in the mid-90s despite the rather obvious conflict of interest. You should blog on this actually, lots of people don’t realise what all this anti-disabled and anti-unemployed ranting in the right-wing papers is about. It’s about ending the benefits system and replacing it with a private insurance model. It’s about opening up a multi-billion pound market to the insurance companies who will no doubt express their gratitude to the politicians across all governments who’ve helped them by making them multi-millionaires. That’s why all that’s going on. These tunnel-visioned idiots are all blinded by the pound signs in their eyes and are clinically unable to understand the damage they’re doing to the economy. They’ll be kings of a wasteland. Seroiusly, you should blog about it, check out http://www.whywaitforever.com. It’s huge and you’ll be appalled. Many of our leading political lights, not simply those presently in office but from the past few governments too, should clearly be in jail over this.
Oh yes, and local councils should form their own banks and create money for their areas (banks can do that, you know, create money, not just central banks but any old high street bank. The form of money they create is called credit and they can’t create it for themselves, only others and that’s why they can still go bankrupt even though they can create money). Then councils should create local currencies, change all the new dosh into it and set up local farms so everyone can get fed. Then stick two fingers up at Osborne. I’m calling this economic secession. I’m fleshing it out.
@BIllyboy: You make a really good, important point on an already good article. Unum (one of whose bosses if I remember rightly from a Private Eye article, left to become the boss of Atos when Atos got the WCA contract in the UK – all very cosy) have been lurking in the background for some time. They’ve since had meetings with the coalition government in Parliament meeting rooms regarding private employment insurance which I saw on the Demos.site (which smacks of a future replacement to JSA if ever I heard of one).
CactusGreen, thanks for the pointer to the Demos site and their roundtable love-ins scheduled for 2013. Read the pdf doc – noted who sponsored it. In agreement that yes it looks like the first tentative steps towards privatising not just JSA but, I believe Unum floating/getting a foot in the door to privatising the whole kit and caboodle of the Social Security provision currently known as the Welfare State. It reads like a Sales Pitch dressed up as debate/discussion. I kept thinking throughout when they pointed to USA based evidence for their products in their(USA) highly developed market there – about how swimmingly well it is going (not) over there…. Particularly their feedback research – I was just left with the thought – did they get ‘smile sheets’ filled by the inmates in concentrations camps – asking if they enjoyed the experience and could it be improved…. and thought how remiss of camp guards to overlook such a fundamental marketing technique. It looks like snake oil, its smells like snake oil, ergo…. BTW – I had the feeling I was potentially being asked to pay for things twice… was that just me?
Interesting to note the follow up Private Breakfast Roundtable – ‘the Power of the Prepaid’ scheduled for 29th January is sponsored by Mastercard – ’nuff said
I’m Dutch and can guarantee you that equivalent aims are being pursued in the Netherlands, although by different means: a form of privatisation on 1 Jan 06, that gave near-full control of healthcare to the private insurers. Everyone must now buy a policy. About UNUM, it entered the EU in 98 by setting up the Dutch insurance company FUNDUM (a front). That was sold to the Dutch FORTIS in 04, and UNUM used the freed-up cash to begin operations in the UK and strengthen those in the USA. I found out all this several days ago, by comparing Dutch and British sources online.
I followed up this and discovered that citizens of the Netherlands now pay 100 Euros a month for compulsory private health insurance. Is this correct?
I think this is a scam and the way it will work is people trying to claim on their health insurance will be subject to an assessment similar to the Atos assessments we are subject to here which as a matter of routine will declare there’s nothing wrong with them in the face of all contrary evidence from doctors and specialists etc. This will leave potential claimants facing ruin while they try to fund a court case against Unum or possibly the state itself, I’m not sure of the arrangement over there. We should be on the lookout for news of this nature from the Netherlands..
I have to agree with Big Bill on scam element….. I know that Unum was the subject of several state side court cases and although I can’t quite remember the details I am pretty certain it was how they dealt with people when they made claims….. Let’s face it the test of a good insurance policy is how is deals with you when you make the claim…. paying out the monthly premiums up to that point is not a test and wouldn’t make me feel safe in my job – unlike the people in the States they used for the analysis – hence why I said it was a sales pitch document they printed not a proper discussion document..
I think the ATOS examination system was prolly an insurance business methodology/assessment for checking claimant validity and a clever bod in Marketing/Finance worked out they could sell the assessment technique on to governments – they make more money (Unum – who will own subsidiary companies under different names in all sorts of countries as they expand their footprint) as they own the process. They (insurance co’s) can only count their earnings on a monthly basis (it is worth noting that each month you don’t claim they earn 1/12th of the overall annual premium) therefore it’s not in an insurance companies interest to payout hence qualifying criteria on claims are so tough all sorts of insurances – car, home, etc.,. Unfortunately another clever bod has now decided they (insurance) can make more money out of governments by offering to run it all for them using their assessment methodologies – which in turn allows the government of the day to wipe it’s conscience clean. With the ‘to do with me guv’ approach they seem to be adopting ‘we just outsource it’…. So as I said earlier Big Bill is spot on….
I replied to Stephen Bunting and Big Bill as a last comment. I should have done that right here. My excuses.
Yesterday my Dutch partner told me that her monthly premium alone is about 130 euros. When you factor in self-risks and an amount payed to the tax authority called “income dependent contribution,” the yearly total cost of her medical care (I think excluding home care) is more than 3000 euros per year. She is a senior citizen, doesn’t have a large pension, and is strapped for cash.
The process turns the poor into an income stream. In the parlance of today, it’s rent-seeking.
My remarks about UNUM and the EU aren’t fully correct. The firm was active in the UK for some time, as UNUM limited, before it entered the Netherlands as FUNDUM. It was not allowed to function as UNUM there, since a company called UNIM already existed. The names were too similar, and I guess UNIM objected.
Ive said this for ages that the only way out of this economic downturn caused mainly be the greedy and inept bankers who lent vastly too much in loans and mortgages to thousands who could never hope to repay them is, to spend our way out of austerity not by savage cuts to benefits. As you quite rightly say those on low incomes have no choice but to spend their benefits or low wages,they have no room to be able to save their income. Their benefits and low incomes are ploughed back in to the economy day on day not squirreled away in deposit accounts on low interests in the hope of better days. If no one spends then jobs cannot be sustained let alone created. We have seen this with Jesspos closing with the loss of 1300 jobs, with Comet with the loss of thousands. We have seen prices rising continuously throughout 2012, Ive noticed it in my local store Morrisons in Erith Kent. My cut in disability benefits has resulted in me spending almost 50% less this Christmas gone as the one before said a friend of mine whilst shopping in Morrison’s, is it any wonder that since Christmas Morrison’s has admitted that their Christmas sales were down. How can this possibly benefit the country.
2013 will see to coincide with less benefit payments and less job creation with less money circulating in the economy with a rise in inflation and loss of jobs not the creation of them, prices in the food supermarkets will inevitably escalate as they did throughout 2012. Im sorry to say but under this stupid Governments steering of this economy by wage restraints and reduction in benefits that the UK economy will sooner rather than later hit a Titanic size iceberg.
This old article is worth a read.I will just post a brief part and the link.
Mervyn King tells MPs: ‘The price of this financial crisis is being borne by people who absolutely did not cause it’
He told the Treasury select committee that the billions spent bailing out the banks and the need for public spending cuts were the fault of the financial services sector.
“The price of this financial crisis is being borne by people who absolutely did not cause it,” he said. “Now is the period when the cost is being paid, I’m surprised that the degree of public anger has not been greater than it has.”
I watched his speech, I think it was at the TUC conference in the autumn of 2010. He said unequivocally that it was the banks caused the financial crash, and he received much applause from the conference. I thought that he was rather brave to have even agreed to speak at the conference, let alone admit that bankers were to blame.
Yet, people like Janet Daley (I cannot bear this woman!!), a columnist for the Daily Telegraph, continues to spout tosh about capitalism no longer being prepared to fund welfare!! What?!! Since when did they fund welfare? More like the government continues to fund them by continually reducing the amount they pay and allowing them to pay a pittance in wages.
Yes, people are always insinuating that benefit recipients are to blame for this mess; we’re like the dogs that get kicked when their owners are in a bad mood and looking for someone to blame, and it will only get worse until we finally get a government that is not in the game of politics for personal gain. Pay them average wage, no outside earnings allowed, no ‘benefits’ in the form of expenses, and only fund and make them stay in the horrible grotty b&bs found around London when they’re required down there instead of funding expensive 2nd homes. We might get people who really want to do some good, who are altruistic in their aim, people we can look up to, rather than the ever descending rotten corrupt lot of good-for-nothings we keep having to endure (there are some good M.P.s however).
I cannot but agree with you over your suggestions regarding MPs pay, though reasonably I couldn’t deny them legitimate expenses, such as would be paid in any other job. As far as administrative support goes, either they could have the services of a civil service departement set up for this, or it could be a service shouldered both financially and practically by their respective political parties. On accomodation, what would be wrong with the idea of a halls of residence type arrangement. Though it would have to be state funded, at least it would be hugely cheaper than the present arrangement which just seems to be a way of profiting from the taxpayer.
People have been all too happy to forget the days of the last tory government, when entire city centres were boarded up for years. When I try to tell people who don’t remember those times how we survived, they look at me as though I’m either mad, lying or both. They’re about to learn some very unpleasant lessons about what depths of stupidity, selfishness and evil your average tory is pathologically incapable of realising is wrong.
We’re all in this together, but some are more unelected than others.
Completely agree with you, however with one rider, it is very much dependent on the age of the person you are trying to impart historical knowledge too. There is a whole swathe of people, I guess under the age of 40 who a) were not around and b) possible not aware due to the naivety we all had as youths as to what was really happening around them. I used to get looked at ‘wide-eyed’ in 2010 by younger people in my office, when I ventured to suggest that Job Centres will probably have to put the wire grills up and get the lino out again. Explaining why the grills were there during the 70’s and could they imaging people hanging off the grills shaking them because they were told they would have to wait for their money. I swear they thought I was making it up…… particularly the length of the queues to sign on and that you only did once a month because there were so many unemployed folks to process. oh well – old heads and young shoulders sometimes don’t fit.
More people will inevitably turn to crime/criminal activity to get through the comming months after these things come into force as it pays better than real work..
These Tory scum whom nobody voted for in the first place should be hung out to dry and flogged in the street.. Disgusting low lives that they are..
It might not be a bad thing if people do turn to crime. If you’re a burglar you aren’t going to waste your time on the local sink estates, no, you’ll be going for the country houses, heading upmarket to the sort of places Tory voters live. This may make them raise their heads from deep in the Mail and realise whats really going on. They’ll love the lack of police response too!
No – they’ll just demand the return of the death penalty and we’ll get an even more oppressive dictatorship than now!
Sounds like a plan.. weather it be Good or bad regardless, seems a shame good people would be forced to do bad things inorder to survive the ideas of these rats no one voted for.. It is an utter disgrace.. and when this bedroom tax (my God who dreamt that one up thinking it was a good idea) comes in it will affect young, old, sick and incapable alike.. such a shame indeed.. although the hegalian dialectic comes into play here as well.. Problem, Reaction, Solution. They create a problem, we the people bring the reaction then they offer a solution which was their intention to bring into play in the first place but needed the people to accept it as a better solution to the problem they created in the first place, but would never have been accepted by the people as the system which was flawed to start with was working fine to a degree.
Now if they said straight out they were gonna privatize the welfare system there would of been uproar like the pole tax riots, but because some people don’t seem to remember thatchers legacy they will just accept it as a good idea in order to fix a problem which never existed to start with before these un-elected parasites came to hold the cards dispair over all our heads…
Crime wont work, there aint enough money in circulation for it to be profitable, unless your talking of shoplifting of basic foodstuffs and toiletries to consume and survive on
Amazing the amount of damage UNUM is doing. Question – how do we stop it and get our Welfare State back?
We spread the word. They’re only getting away with this because people don’t know about it.
The shape of things to come:
Reblogged this on Socially Housed and commented:
The UK needs to Wake up!
A little ditty written some time ago.
“It’s the rich what gets the pleasure, It’s the poor what gets the pain”,
A truer word was never spoke
Must it always be the same?
Will Ballot Box ere give us the people that we need?
Uncorrupted by the system to stop the ugly greed?
The message always comes back “There’s nothing we can do”
But where there’s will there’s way they say, or’s that just retric too?
Instead they lash the whipping boy, someone must pay the cost
The poor, the lame, the old it seems must pay for billions lost.
But more than this, after the lash, salt deep rubbed in raw flesh.
More bonus pay for bankers who got us in this mess.
So grabbing fists are filled with cash, with money from the poor.
When will this stop? Pigs to a trough. They’re always wanting more.
“We’re all in this” I heard them say although it’s just not true.
I don’t see rich man getting lashed, that’s kept for me and you.
No banker asked to face this crime,
The poor instead must serve the time.
No lash for them – it’s just for us, a truth as cold as stone.
The cuts? They’ll never touch the rich. The poor must bleed alone.
@ Stephen and Big Bill. The required basic premium has risen to 250 or more euro per month, per person, in the Netherlands. But there’s also a “supplementary package” that more and more people are being forced to buy. Provisions are being transferred from the basic to the supplementary package, so there is often no choice. As for Atos style assessments, they have been going on since around 1991, I think. The system uses a computer with descriptors like those used in the UK now, but a qualified physician is involved, not just an assessor and a decision maker. What is happening now in the UK began in the Netherlands, certainly since 2002, when ATOS ORIGIN acquired the Dutch and British divisions of KPMG Consultancy. I suspect that UNUM was somehow involved in the Dutch assessments. A similar list of descriptors is used to the British LIMA (Logic Integrated Medical Assessment) and ATOS has been doing IT work for Dutch governmental and other official agencies for at least ten years. But I haven’t been able to find proof as yet. I do know that the Dutch KPMG manages the finances of the semi-private disability/unemployment agency UWV.
All these puerile and unfounded Tory stories made up on the spot by Murdoch’s myrmidons in The Sun and regurgitated by the gullible are pure rubbish. And aside from demonizing immigrants who are all of course on multi-thousands of pounds a week and who live the life of a benefit millionaire popping over weekly from their holiday home in Monaco to sign on the central fact remains;
This ConDem government is turning the poorest people of the UK’s indigenous population into an income stream for the engorgement of the rich, be they in this country or in countries that have lent us money. The poorest; the indigent; the young; the old, in fact everyone at the bottom of the social pile are having their pockets picked by the rich.
That is no lie. The personal wealth of the richest in society is increasing at an exponential rate. Take a look;
Just before Xmas 2012 the Inland Revenue wrote off in one single stroke of a pen £250 BILLION in unpaid taxes to multi-national corporations and those that own them.
In that same year (2012) when we were told that we were suffering the worst recession since the slump of the 1930′s the CEO’s of the top 100 FTSE companies registered in the UK saw their incomes RISE by 49%. They now average more than £4.5 million per annum (including bonuses) each!!
And while I’m on the subject of bonuses, the 2012 Xmas bonuses for the bankers that, in part, caused this mess in the first place this year is being kept very quiet. Have you noticed? A topic that had slipped off the agenda until it became known that they were going to pay them out post April 2013 to avoid a 50% tax rate because as we all know it drops this coming April to 45% but only for those earning over £150,000 per annum. A 45% rate brought in by this ConDem government – you know, the same government who bleat on continuously about the national debt and how frightfully awful it all is. I wonder how many £BILLIONS those bonuses will be when taken together? Never mind the 45% tax on those bonuses – they shouldn’t be paid in the first place. And all there’s been from this government is a bit of subdued sabre rattling and a mild call for some restraint. You seen any – because I haven’t.
So let’s just take just those three things together and then look at what they are doing to the poorest and most vulnerable people in our society. Then look at the front page of the Liberal Democrat membership card where it says;
“The Liberal Democrats exist to build a fair, free, and open society in which we seek to balance the fundamentals of liberty, equality, and community and in which no one shall be enslaved by poverty, ignorance, or conformity.”
Reconcile that one Cleggie.
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