“I’ve argued for many years that far too much money given to these agencies, fails to reach the people the organisations purport to aid,” she writes. “I’ve even disappointed my 84 year old mum, who readers know I adore, when I refuse to buy the raffle tickets she receives twice a year, regular as clockwork, from several of these orgs. For me the Top ‘Charities’ no longer qualify as such, and it’s time for the Charities Commission to do its job and remove this status, lets call them what they are Big Businesses.
“I worked in the voluntary sector for many years, providing a real service to local people. Such projects are run by regular people, who find themselves forced to battle with these multi-million pound companies, in their efforts to raise less money than Stroke pay for fund-raising to keep their service going. I do not believe this is Right and I’m not convinced people who donate hard earned money, expect it to go to the same company who then hassle them by calling them at home with a Hard Sell?”
Nothing more to say: This Tax Credits advert was intended to warn people to keep up-to-date with information they send HMRC about their claim; now it seems the message is much simpler – they want to stop paying you anyway.
This government scares the s**t out me. I don’t know how much more stress I can take now. It has gone beyond anything like “austerity” or “in it together” rhetoric and is now a witch hunt against the poor or low earners, sick and disabled – even going as far as blaming us for our own predicament.
We have seen our family income go from £800 from my other half’s wage back in 2009 to just under £350 now, due to successive redundacies. He works and has never had any unemployment in the past 12 years, and yet each time he calls tax credits to say there is a change in our income they lower the award (ha! thats a rich term for it now, its garbage to call it an award) based on his predicted income, even though its gone down and down.
Last year he worked overtime for two weeks, got paid an extra £20 in the month and they hammered us by cutting his Working Tax Credits by £30 a week for the entire year! He recently got made redundant again and is now working two temp jobs (one of which is zero hours) and he has got hours bouncing around all over the joint. Family life has been shot to s**t, and when he rang Tax Credits to tell them they just said, “Oh well, as long as it’s over the 24 a week you are okay.”
Today they shoved some money in the bank. He rang to ask what the hell it was for; they can’t tell him because “We haven’t had the renewal paperwork in.” For goodness’ sake, we just wanted to know what this extra money is, it’s not rocket science! The guy refused to tell us!
My other half had to use it to pay bills because his wages were short due to the zero hour contract job changing how they pay wages now – because of that stupid pension scheme c**p the government forced on everyone. Even though he already has one from his previous job, this company took money for their pension and said they wouldnt pay into his! Oh, and because his old employer forgot to send his P45, he had to pay emergency tax as well!
We can’t do this any more. The stress of him working two jobs, my disability, and having children is driving a wedge between us. One of our children has autism, and I am struggling to maintain a routine that they desperately need – and I can’t. The other half is now on National Minimum Wage for both crappy jobs; both want exclusivity out of him and now keep rostering him on during the other job’s time. Both knew he had a second job when they took him on, and now we find out that tax credits can send debt collectors and bailiffs around for money they say anyone owes, just like that.
I wish to god Tony Blair had not invented tax credits, because it gives employers a get-out clause for paying decent wages. I can’t get hospital transport fees out of the NHS for trips I have had to make and even though they were claimed within the time allowed – no payment has been forthcoming because “it’s too late now” for them to pay out. I have another appointment in two weeks’ time which I have to cancel as I cant get there, because my other half can’t take time off work from either job – and my physio is about to strike me off for the same reason.
I am sick of this mess; we dont deserve this, and if we find out Tax Credits have overpaid us as well I don’t know what we would do. We have an income of less than average and we pay our own rent; we don’t claim Housing Benefit because the council stuffs it up and we get into arrears so we manage on our own.
We claim less of what we are entitled to because I am scared they will want it back, and now they are playing this game with tax credits.
I don’t want to be punished any more for being disabled, a parent or married. I have had enough of being poor and scared. All I want is for my other half to have a decent job with a decent wage, and there is nothing out there now.
There’s more than a little of the piscine about the fact that our Conservative-led has set debt collection agencies onto poor families who have been overpaid tax credit due to errors made by HM Revenue and Customs.
Firstly, the move undermines the principle behind the tax credit system – that it is there to ensure that poorly-paid families may still enjoy a reasonable living standard. Tax credits are paid on an estimate of a person’s – or family’s – income over a tax year and the last Labour government, knowing that small variances could cause problems for Britain’s poorest, set a wide buffer of £25,000 before households had to pay anything back.
By cutting this buffer back to £5,000, the Conservatives have turned this safety net into a trap. Suddenly the tiniest overpayment can push households into a debt spiral, because their low incomes mean it is impossible to pay back what the government has arbitrarily decided they now owe.
And the sharks are circling. Instead of collecting the debt on its own behalf, HMRC has sold it on to around a dozen debt collection agencies who are harassing the families involved with constant telephone calls, mobile phone messages and letters to their homes.
In total, HMRC made 215,144 referrals to debt collectors in 2013-14. Of the working families involved, 118,000 earned less than £5,000 per year.
This takes us to our second area of concern. Remember how the Department for Work and Pensions has been encouraging people – particularly the disabled – to declare themselves as self-employed in order to avoid the hassle and harassment that now go hand in hand with any benefit claim? You know – the refusal of benefits based on arbitrary ‘descriptors’ that were originally devised by a criminal insurance company as a means to minimise payouts, and the constant threat of sanctions that would cut off access to benefits for up to three years unless claimants manage to clear increasingly difficult obstacles.
Both of these circumstances are likely to lead to a verdict of overpayment by HMRC, as the self-employment reported by these people is likely to be fictional, or to provide less than required by the rules – either in terms of hours worked or income earned.
Suddenly their debt is sold to a collection agency and they are suffering government-sponsored harassment, alarm and distress (which is in fact illegal) far beyond anything they received from the DWP; debt collection agencies are not part of the government and, as Dame Anne Begg pointed out in the Independent article on this subject, “The tactics they use to collect the debt are not tactics a government should use.”
Maybe not. So why employ such tactics?
Let’s move on to our third, and final, worry. By setting sharks on the hundreds of thousands of minnows caught in the government’s trawler-net (that was formerly a safety net – and I apologise for the mixed metaphor), the Tory-led administration is creating a handy distraction from the huge, bloated, offshore-banking whales who donate heavily into Conservative Party funds and who are therefore never likely to be pursued for the billions of pounds in unpaid taxes that they owe.
The government has promised to clamp down on tax evasion and avoidance, but ministers would have to be out of their minds to attack the bankers and businesspeople who pay for their bread and butter.
Not happy with its attempt to sell your health details to private companies, the moneygrubbing Conservative-led Coalition wants to sell off your personal tax data to companies, researchers and public bodies.
The government is considering how much to charge for the information, and claims that all data accessed by third parties will be “confidential”.
But the public has already been stung once by the Coalition’s incompetent attempts to go commercial. The proposed initiative to share NHS medical records with the private sector had to be suspended after a public outcry over “pseudonymised” data – a process by which medical records were said to be anonymous but it was in fact possible to trace exactly whose they were.
The plans for HM Revenue and Customs to share its data are, apparently, being overseen by Treasury minister David Gauke, whose relaxed attitude towards private firms led him to sign off on the infamous “sweetheart deals” that allowed multinational companies to keep billions of pounds of tax that they owed to the Treasury but didn’t want to pay.
Worse still, it turns out the government has already allowed private firms access to our data.
The government has strict rules about what can be released outside HMRC, with a near total ban on data sharing unless it is beneficial for the organisation’s internal work. But according to The Guardian, despite the restrictions, HMRC has quietly launched a pilot programme that has released data about VAT registration for research purposes to three private credit ratings agencies: Experian, Equifax and Dun & Bradstreet.
To comply with the law, the private ratings agencies, which determine credit scores for millions of people and businesses, have been contracted to act on behalf of HMRC and are “therefore treated as part of the department” – giving them access to tax data about businesses that would otherwise be confidential.
The government’s plans to change the law to allow the sale of anonymised individual tax data and release of the VAT register were buried in documents as part of the autumn statement and recent budget.
An HMRC spokesman told the BBC: “HMRC would only share data where this would generate clear public benefits, and where there are robust safeguards in place.
“Last year’s consultation made it very clear that there would be a rigorous accreditation process for anyone wanting access to the data and that any access would take place in a secure environment.
“Those accessing data would be subject to the same confidentiality provisions as HMRC staff, including a criminal sanction for unlawful disclosure of taxpayer information.”
So there. Do you feel better now?
Emma Carr, deputy director of civil rights campaign group, Big Brother Watch, doesn’t. She said: “The ongoing claims about anonymous data overlook the serious risks to privacy of individual level data being vulnerable to re-identification.
“Given the huge uproar about similar plans for medical records, you would have hoped HMRC would have learned that trying to sneak plans like this under the radar is not the way to build trust or develop good policy.”
Ross Anderson, a professor of security engineering at Cambridge University, told The Guardianthe information could be highly useful to credit rating agencies, advertisers, and retailers wanting to practise price discrimination.
“This is going to be a big battleground,” he said. “If they were to make HMRC information more available, there’s an awful lot of people who would like to get their hands on it. Anonymisation is something about which they lied to us over medical data … If the same thing is about to be done by HMRC, there should be a much greater public debate about this.”
It seems the Conservatives in the Coalition are determined to sell information that doesn’t belong to them, and intend to grind us down with a relentless bombardment of initiatives and plans until they succeed.
They seem to by relying on the possibility that we will get ‘complaint fatigue’ and give up any protests. This is how they have beaten disabled people into submission to the draconian system for withdrawing state benefits from them; the system for appealing is drawn-out and convoluted, and many people with illnesses are too tired or weak to go through the process.
Also, this is another way of contracting-out government work to private firms, as evidenced by the VAT “research” that has been handed over to credit ratings agencies.
You can be sure of two things: Your data is not safe in their hands, and they won’t stop trying to sell it until they have been pushed out of government.
Americanised healthcare: It is appropriate that the only appropriate image I could find features dollars instead of pounds – because it is clear that the Tory government is changing the NHS into an Americanised insurance-based service.
Confidential information on NHS patients has been sold to insurance companies who used it in combination with information from credit rating agencies to identify customers and “refine” their premiums – increasing the costs of policies for thousands of customers, despite all the Tory-led government’s assurances to the contrary.
“As a result they recommended an increase in the costs of policies for thousands of customers last year.”
The revelation comes only days after plans to sell the confidential medical information of every NHS patient in England were put on hold amid a public outcry.
The care.data system, also called variously the General Patient Extraction Service (GPES) or the Health and Social Care Information Centre, was dreamed up as a money-spinning device by Jeremy Hunt’s Department of Health.
The aim is that, if you are an NHS patient in England, your GP will be forced to provide your confidential records, showing every medical condition you have ever had and providing intimate details of your current state of health, to a huge national database.
From there, your information may be sold on to private healthcare and pharmaceutical companies for “research”. The government has said the information would be “pseudonymised”, in an attempt to reassure you that you cannot be identified from the information to be provided to outside organisations.
Only last Friday the BBC was reporting that critics of the scheme were “scaremongering”.
The Corporation – which has failed to report the new development – quoted Tory MP George Freeman, founder of Patients4Data, which represents charities and drug companies (and not patients, apparently) as follows: “We cannot let opponents peddling scaremongering myths stop patients benefiting from this quiet revolution of modern medicine.”
Vox Political has made it clear from the outset that this is not true, and in fact it will be entirely possible to trace your medical information back to you. Now we have proof.
NHS England has delayed compiling the new database of English NHS patients until the autumn. You could help sink the scheme altogether, if you don’t want your government – and your NHS – to sell your information into the wrong hands. Just opt out of the data sharing scheme, using a form designed by the medConfidential website.
Make no mistake – the Conservative Party and the Liberal Democrats in Parliament have betrayed you.
They have already sold hospital patients’ information to insurance companies, and there can be no doubt that the intention is to do the same with GPs’ confidential records, with a consequential increase in insurance costs to people across the country.
They are turning your beloved National Health Service into an insurance-based scheme, on the same lines as the vastly more expensive American system.
They have been lying to you.
They intend to profit from selling your information – to companies that intend to profit by using it against you.
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All the wrong choices for all the wrong reasons: The evidence fails to support George Osborne’s economic austerity policies – the only likely explanation seems to be an intention to rob this nation of everything possible before 2015.
The more we learn of the Tory-led Coalition’s policies, the wider the gap grows between what it is doing and what it should be doing.
Look at the sham psychometric tests, exposed by fellow blogger Steve Walker in a series of articles on his Skwawkbox site. It is now firmly established that the DWP – aided by the Cabinet office ‘nudge unit’ – set out to pressgang put-upon benefit claimants into taking part in a crude piece of neuro-linguistic programming – no matter what answers you provided, the test always pushed out a ridiculously upbeat appraisal of your character and then tried to get you to act according to this verdict in your jobsearching activities. The theory is that this will make a jobseeker more confident and finding a job easier. The problem is that it’s quite utterly ludicrous.
If you haven’t already, you can read the Skwawkbox exposure of this particular caper on that site – there are plenty of links to it from this one. The reason it is mentioned here is that it provides a useful set of questions with which to analyse any government activity: First, is the theory behind this activity sound? Second, if that theory is being used to support a particular course of action, is that action justifiable?
Firstly, the letter warns against the perils of losing market confidence. By this, we can see that it means we should fear any downward revision of our credit rating by the credit agencies, as “a one percentage point increase in government bond yields would add around £8.1 billion to annual debt interest payments by 2017-18”.
What’s being said is that a drop in our credit rating would mean the people and organisations that have invested in UK government debt (by buying our bonds) might move their funds to others, meaning the government could be faced with an interest rate rise, leading to increased difficulty in borrowing.
As Professor Malcolm Sawyer notes in Fiscal Austerity: The ‘cure’ which makes the patient worse (Centre for Labour and Social Studies, May 2012), “It is well-known that a government can always service debt provided that it is denominated in its own currency. At the limit the UK government can ‘print the money’ in order to service the debt: this would not take form of literally ‘printing money’ but rather the Central Bank being a willing purchaser of government debt in exchange for money.” This is what is happening at the moment. Our debt is in UK pounds, and we can always service it. Our creditors know that, so they remain happy to continue financing it.
This means that the Treasury’s next point, that “any loss of investor confidence in the UK’s fiscal position would not only affect the UK, but also the global economy” is also meaningless. There won’t be a loss of investor confidence, so there won’t be an effect on the global economy.
We move on – to the Chancellor’s claim that fiscal austerity is required to prevent the slowing of economic growth that happens when the national debt hits 90 per cent of gross domestic product (or thereabouts).
Obviously I haven’t had time to look up eight academic works to support any opposing theory I may wish to create – and I think I would be foolish to try. I don’t have any grounding in economics beyond what I’ve been able to pick up by following the national and international debates.
He writes: “Most economists are unable to conceptualize anything that someone with more standing in the profession did not already write about. This is the only reason that the Reinhart-Rogoff 90 per cent debt-to-GDP threshold was ever taken seriously to begin with.”
That prodded my curiosity to check some of the papers listed by the Treasury in support of its stance, and the three that I checked (The Real Effects of Debt, Public Debt and Growth, and How Costly Are Debt Crises?) all listed the Reinhart-Rogoff paper in their supporting references. So Mr Baker is right.
“Debt is an arbitrary number,” he continues. “The value of long-term debt fluctuates with the interest rate… The value of our debt will plummet if interest rates rise… This means that we could buy back long-term debt issued today at interest rates of less than 2.0 percent for discounts of 30-40 percent. This would sharply reduce our debt-to-GDP ratio at zero cost.
“Bonds carry a face value, meaning the amount that will be paid off when they reach maturity. This is what gets entered in our debt figure. However bonds also carry a market price, which fluctuates inversely with interest rates. The longer the term of the bond, the more its price will vary with interest rates.
“If interest rates rise, as just about everyone expects over the next three-to-five years, then the market price of the bonds we have issued in the current low interest rate environment will fall sharply. Since we count our debt at the face value of the bonds, not their market price, we could take advantage of the drop in bond prices to buy up… bonds at sharp discounts to their face value.
“The question is why would we do this, we would still pay the same interest? The answer is that the policy would make no sense for exactly this reason.
“However, if we accept the Reinhart-Rogoff 90 per cent curse, then reducing our debt in this way could make a great deal of sense. Suppose we can buy back debt with a face value of 60 per cent of GDP at two-thirds its face value, or 40 per cent of GDP. In our debt accounting we would have reduced our debt-to-GDP ratio by 20 percentage points. If this gets us below the 90 per cent threshold then suddenly we can have normal growth again.
“Yes, this is really stupid, but if you believed the Reinhart-Rogoff 90 per cent debt cliff, then you believe that we can sharply raise growth rates by buying back long-term bonds at a discount. It’s logic folks, it’s not a debatable point — think it through until you understand it.”
I found Mr Baker’s piece after asking Jonathan Portes of the National Institute for Economic and Social Research (NIESR) for his opinion on the Treasury letter. He described it as “Predictable and largely irrelevant”.
So despite my lack of economic education, we have a working theory that suggests the Treasury has built its economic castle on the sand; that its justification for austerity is unsound. What about the austerity measures themselves? Are they justifiable on any level at all?
Evidence suggests not.
Let’s go back to our other friend in this matter, Prof Malcolm Sawyer. “Fiscal austerity and cuts in public expenditure do not work – there is a limited, if any, effect on reducing the budget deficit, and any return to prosperity is severely undermined.” We can see that this is true, using the government’s own figures. It managed to cut the deficit from £150 billion to £120 billion in 2011-12, mostly by axing large projects that invested in the UK economy. How much did it cut from the deficit in 2012-13? Less than £1 billion. The benefit cuts that created much of the fuel for this blog have not helped to cut the deficit at all.
“The reduction of the budget deficit can only come from a revival of private demand which is harmed by an austerity programme,” Prof Sawyer continues. Again, we can see that this is true. Austerity measures such as benefit cuts and the axing of infrastructure investment projects means there is less money available to the people who are most likely to spend it – the working- and middle-classes, and those who are unemployed. People with less money have to spend just about everything they receive in order to cover their costs. That money passes into circulation and the economy grows, through the fiscal multiplier effect. An attempt to explain this effect appeared on this blog within the last few days. The point is that demand increases when the people who earn the least have more to spend.
Therefore we see that Prof Sawyer’s next statement, “Deficit reduction requires investment programmes and reduction of inequality to stimulate demand”, is already proved.
So the answer is to reduce the unemployment rate by creating more jobs and closing the jobs deficit, as highlighted in this blog only a few days ago; to raise incomes by significantly increasing the minimum wage and adopting the proposed ‘living wage’, as promoted in this blog frequently; and investment in infrastructure projects.
What has Osborne done, along with his economically-illiterate chums?
He has created high unemployment.
He has depressed wages.
He has cut infrastructure projects.
He has, therefore, sucked all the demand out of the economy. What effect has this had?
Economic growth has, in the single word of Shadow Chancellor Ed Balls, “flatlined”, borrowing has remained high and the national debt is continuing to rise.
In other words, this part-time Chancellor’s strategy – a plan on which we have all been asked to judge the entire Coalition government, let’s not forget – has failed. Hopelessly.
I return you to Prof Sawyer, one last time [bolding mine]: “The austerity programme is economically irrational, socially irresponsible, and lacks credibility that it can reduce the budget deficit and secure any return to prosperity. The time has come to rebuild through investment and through a major assault on inequality.”
What a day. The International Monetary Fund has politely suggested that Gideon George Osborne should slow the pace of his austerity measures; in response, Osborne has politely suggested that the IMF should go and spin on it.
You are watching ‘A Family At War’.
The IMF’s chief economist, Olivier Blanchard, told the BBC: “We said that if things look bad at the beginning of 2013 – which they do – then there should be a reassessment of fiscal policy… We think this would be a good time to take stock and see whether some adjustments should now be made.”
He suggested the March budget would be a good time to change tack, adding: “Slower fiscal consolidation in some form may well be appropriate.”
In response, Osborne said: “We have a credible and flexible debt reduction plan. That credibility is very hard-won and easily lost.
He said pension, education and welfare reform was making the UK economy more competitive, and cuts to corporation tax and higher-rate income tax were making the country more attractive to business. “We do have to carry on with the cuts. We’re not about to bring that programme to an end. [It] will go on until 2017. We are walking a difficult road but we are going in the right direction.”
My problem with the IMF is that it is the very organisation that told us our economy had a completely clean bill of health, immediately before the credit crunch, the banking crisis and the first of our recessions. How can we ever trust anything that comes out of it again?
Mr problem with Osborne is that he’s, well, Osborne. Look at what he said – it’s a load of hogwash. We don’t have a credible debt reduction plan – that’s why the credit agencies are poised to strip the UK of the triple-A rating that Mr 0 prizes so much.
Even The Spectator magazine – a Tory rag – has slapped Osborne’s chum David Cameron for lying about the debt. Cameron said his government was “paying down Britain’s debts” – in fact, on his watch, it has risen from £811.3 billion to £1.11 trillion (for those of you who like percentages, that’s from 55.3 per cent of GDP to 70.7 per cent). In other words, both as a percentage of GDP and in real terms, debt has risen by nearly a fifth under this government. And Osborne is the one who was supposed to turn that situation around.
Welfare reform isn’t making the UK economy more competitive, it’s pushing wages down. If the impoverishment of British workers is what Osborne thinks it will take to bring business into the UK, then he isn’t fit to be Chancellor. But then, we knew that anyway.
Cuts to taxes might make us more attractive to businesses, but only because they don’t have to pay as much to the government in order to operate here. That doesn’t help the UK; it helps those private businesses.
So once again, we see how Osborne views his own role – as a kind of corporate vampire, sucking money out of the state and feeding it to private businesses – from abroad, to judge from his statement today. The money he siphons out of the Treasury means a shrivelled, shrunken public spending system – again, something Osborne desperately wants, as he will use it to improperly justify further cuts to services which the British public desperately need and deserve.
Back in 2010, the IMF was recommending austerity and Osborne was shoulder to shoulder with its spokespeople. Now he’s showing his true colours.
But then, what can we expect from a man with such poor morals he even used the Parliamentary expenses system to make a cool £1 million at the taxpayers’ expense?
I wonder what he’ll say tomorrow, if the figures put us into triple-dip recession.
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