Inadequate wages and extortionate rents are pushing up the Housing Benefit bill, it has been revealed.
What is the Coalition government’s solution? It is increasing its efforts to tackle fraud.
“Forecast spending on Housing Benefit (we call it Landlord Subsidy) has been revised up by £2.5bn (11 per cent) since the expected number of renters and the level of rents relative to earnings have increased at a faster rate than predicted,” according to the New Statesman.
“As wages have continued to lag behind inflation, the number forced to rely on welfare to remain in their homes has surged. The government is now forecast to spend more than £27bn on housing benefit by 2018-19, accounting for more than 11 per cent of welfare [that’s social security] expenditure.”
It seems our Tory leaders find this far more acceptable than the alternative, which is to cap rents and pay working people a living wage. Remember that the vast majority of new Landlord Subsidy claims come from people who have jobs.
The Bedroom Tax must also take some of the blame: “One of the main causes of higher spending has been the shift from public to private rented housing,” states the Statesman. “In 2012-13, the number of private renters exceeded the nunber of social renters for the first time in nearly 50 years. Since private rents are usually higher than social rents, the housing benefit bill has risen accordingly.” This may be attributable to the introduction of the Bedroom Tax in April 2013, with social tenants scrambling to grab the cheapest – that’s right, the cheapest – private accommodation before everyone else.
The Coalition government’s response has been predictable: Falsely accuse tenants of fraud. It worked with incapacity benefits – why not with this?
“We know there is more to do to crack down on benefit fraud,” said Work and Pensions Minister Mark Harper – who is himself a fraudster, having employed an illegal migrant and lied about it. “This month we have brought in a new detection system that will cross-check all housing benefit claims against up-to-the-minute information on earnings and pension income.”
Great. Will that bring down the level of fraud, which totalled £340 million for the tax year 2013-14 – a monumental 1.42 per cent of that year’s £23.9 billion Housing Benefit bill?
Who cares? Even if it eliminated fraud altogether, no new claims were made and HB was not increased, the bill would still be £23.56 billion.
(Here’s a little perspective: If the total spent on fraudulent claims was saved, the government would keep more money than it would make from selling the UK’s share in the Eurostar train service, which is expected to be £300 million.)
Labour has said it will increase wages and build more affordable homes – tackling the causes of the problem rather than scapegoating its victims.
He was right to say it was “profoundly shaming and offensive” for Conservative voters – especially those who are not super-rich – when George Osborne lowered the top rate to 45p, two years ago.
He was right when he wrote that “to make the rich richer at the same time as making the poor poorer – what George Osborne has been doing – is simply squalid, immoral and disgusting.
“Any decent human being must surely feel sick in the stomach that he is taking this action at the same time as cutting the amount of tax paid by people earning more than £150,000.”
To that, let’s add a point about the kind of people who are benefiting from the lower tax rate – the kind of people who take home around £1 million a year in basic pay, who are promised bonuses of up to twice those yearly salaries, and who caused the financial crisis that has allowed Osborne to pursue his policy of impoverishing the poor.
That’s right: George Osborne’s 45p tax rate is a £100,000 extra bonus, every year – in gratitude for all their help, one must presume – for bankers.
Oborne is also right to say that Labour’s decision in the 1970s, to impose a top tax rate of 83p in the pound, was a huge mistake – for whatever reasons. It genuinely drove people out of the country, whereas at 50p they just grumble and threaten to go.
All of the above being said, Oborne continues to espouse some utterly wrong-headed nonsense. He claims that “the Conservative Party is not an interest group which represents only the very rich” when all of its actions since getting into office in 2010 demonstrate ample proof that a minority group representing only the very rich is exactly what it is.
Oborne actually puts in print: “The Coalition government has devoted a great deal of effort to lowering the living standards of the poor. I support this project.”
It’s great to see a Tory voter actually admitting this, but imbecilic behaviour for a columnist who (one presumes) wants people to respect his point of view.
He goes on: “I believe that Gordon Brown’s welfare state forced some people into a life of dependency… There have been many people on welfare who need much more of an incentive to return to work.”
Wrong, wrong, wrong.
The reason many people are without jobs and claiming benefit is, there are almost five jobseekers for every job. This is a situation created by the Tory-led government in order to keep wages low; with so many people clamouring for jobs, people who do have work but are on the bottom rung of the employment ladder can’t ask for a raise – they would be jettisoned and replaced by a jobseeker (most likely on lower basic pay than the original holder of the job).
Nobody was forced into a life of dependency by Gordon Brown; the vast majority of unemployed people genuinely want to improve their situation with a job that allows them to avoid claiming benefits – and it is good that the Labour Party, if returned to office next year, will work hard to bring the Living Wage into force for all working people.
You see, Mr Oborne and his ilk conveniently forget that the vast majority of people whose living standards have been hit by the Tory war on the poor are in work. They are so poorly-paid by George Osborne’s corporate friends that they have to claim tax credits – or, as I like to call them, Employer Subsidy – and housing benefit – otherwise known as Landlord Subsidy.
That’s improper use of our tax money. We should not be subsidising fat corporates with our hard-earned taxes, so they can deliver ever more swollen dividends to their shareholders; and we should not be subsidising greedy landlords who charge multiples of what their properties are worth to tenants who have nowhere else to go if they want to keep their pittance-paying job.
It is valid to criticise Gordon Brown for allowing this to happen, but who knows? Maybe this figurehead of neoliberal New Labour was using tax credits as a stop-gap, intending to persuade corporate bosses round to the Living Wage in good time. We’ll never know for sure.
There remains a strong argument that government schemes to get people into work should have checks and balances. As underwriters of these schemes, we taxpayers need assurances that the firms taking part will not abuse their position of power, using jobseekers until the government subsidy runs out and then ditching good workers for more of the unemployed in order to keep the cash coming. That is not a worthwhile use of our cash.
We also need assurances that participants won’t drop out, just because life on the dole is easier. I was the victim of several personal attacks last week when I came out in support of Labour’s compulsory job guarantee, because they hated its use of sanctions. I think those sanctions are necessary; there should be a penalty for dropping out without a good reason.
In a properly-run scheme, those sanctions should never be put into effect, though. That means that any government job scheme needs to be driven, not by targets but by results.
Look at the Welsh Ambulance Service. Targets imposed by the Welsh Government mean that ambulances are supposed to arrive at the scene of an emergency within eight minutes – even if they are 20 minutes’ fast drive away, on the wrong side of a busy city like Cardiff, when they get the call. This means the Welsh Ambulance Service faces constant attack for failure to meet targets.
But what kind of results does the service achieve? Are huge numbers of Welsh patients dying, or failing to receive timely treatment because an ambulance arrives a minute or so after its target time? No. There will, of course, be some such occasions but those will most likely be the result of many contributory factors.
So: Results-driven schemes will put people into jobs and improve the economy; there is no need to impoverish the poor; the very rich never deserved their tax cut; and Ed Balls is right to want to re-impose the 50p rate.
The Conservatives are wrong to attack poor people; there is no need to impose further cuts on social security as part of Osborne’s failed austerity policy; and these things show very clearly that the Tories are a minority-interest party supporting only the extremely rich.
In the end, I find myself agreeing with one more comment by Mr Oborne; Ed Balls really has “given ordinary, decent people a serious reason for voting Labour at the coming election”.
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Is anyone else sick of employers bleating that the minimum wage is hindering their business?
They must think we’re all stupid.
A few of them were on the BBC’s Any Answers on Saturday, saying the minimum wage keeps pay down, and that people can’t afford to go to work – especially if they live in London – because their housing costs are paid by benefits. This is nonsense.
The minimum wage is exactly what it claims to be – a minimum. And if people aren’t getting up to work for it because benefits give them more, we can see that it is not enough.
But let’s take this further: We all know that Landlord Subsidy is being restricted – especially in London, where landlords charge more than in the rest of the country. This means that people on low incomes in rented homes will be unable to pay the bills and will be forced to move somewhere cheaper (if they can find it), as intended by our extreme right-wing government.
Where are all these minimum-wage employers going to find their minimum-wage workers then?
Even that isn’t the limit of it, though. We know from such sources as the summer’s excellent Dispatches documentary on Channel 4 that employers have found ways around the minimum wage.
They have taken people on as self-employed contractors who are paid a flat rate for a day’s work – no matter how long that work takes – and being self-employed, these people pay their own taxes and National Insurance, and get no time off for holidays or if they are ill.
They have taken on workers on part-time contracts, meaning reduced or non-existent holiday and sick pay entitlements – and then boosted up their hours to full-time levels with fake ‘overtime’ offers.
They have employed workers on zero-hours contracts, meaning they can demand an employee’s presence at any time and make them work for as long – or short – a period as required. Again, there are no tax administration obligations, NI, sickness or holiday benefits.
The result is very nice for a government of liars such as the current Westminster administration, because it seems they have managed to increase employment (in fact the last figures showed unemployment is greater than at the end of the Labour administration in 2010, but by such a small amount that it’s not worth mentioning).
Production, on the other hand, has remained flat. If more people are in work, it should have increased.
That is how we know we are looking at a con.
If more people are in work but production hasn’t gone up, we must question the incentive for this increased employment. It has already been mentioned: The lack of holiday and sick pay entitlement, National Insurance and tax admin obligations. The larger the employer, the larger the saving – but this doesn’t mean small firms aren’t feeling the benefit.
The minimum wage worker’s income is topped up by benefits – but the government is cutting these back. Landlord Subsidy in London won’t be enough for people on the kind of contracts described here to stay in their homes, and this means a consequent job loss if they have to move out of the area.
Tax credits are being removed; child benefit restricted. Universal Credit (if it ever works) will operate in real-time, adjusting benefits to ensure that low-paid workers remain in an income trap for as long as their wages remain below a certain level.
Employers reap the benefits. But even they are being conned, because this can’t last forever.
Imagine a Britain without in-work benefits but where the living wage has not been introduced nationwide (this will be a reality in a few years, under a Coalition or Conservative government). Workers on the self-employed, part-time or zero-hours contracts described here will not earn enough to survive.
Private debt will increase exponentially, leading to increased mental illness as the stress of trying to cope takes its toll on the workforce. Physical illness will increase as people cut back on heating in their homes and food in their fridges and larders. Result: malnourishment and disease.
What happens then? It’s hard to say. It may be that employers will take on increasing numbers of cheap foreign workers – but there is already resentment at the influx of immigrants from the European Union and this could lead to civil unrest.
It seems likely that the largest firms will leave these shores. If we compare them to huge parasites – and we can – then the host will have been drained almost dry and it will be time to move on and find another to treat the same way. These are the companies who have reaped huge rewards from tax avoidance, aided by the ‘Big Four’ accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who have been writing – into British law – ways for them to get out of paying their share.
The smaller employers might keep going for a while or collapse; it depends how much their bosses save up for the inevitable crash. Deficit financing of their business will support them for a while but, if they don’t have any ideas, they’ll go under.
All because a few very greedy people just won’t pay a reasonable amount for a hard day’s work.
They get on the media, telling us they can’t afford higher wages. In that case, why are they even in business? If they need a workforce of a certain size, but cannot pay a living wage, then they simply should not bother. All they are doing, in the long run, is contributing to a monumental confidence trick that will cause immense harm to the economy and the nation’s health.
Of course, the UK did not always have in-work benefits. People used to be paid enough to make ends meet. We should be asking why that changed and who benefits. A return to that situation would benefit the country enormously – but it isn’t going to happen on the minimum wage, and it isn’t going to happen on zero-hours contracts.
It’s time to name these firms and ask bosses who employ on these terms why those contracts are necessary and why they feel justified in the damage they are causing.
And while we’re at it, it’s time to ask our MPs why they tolerate it, too.
Taking no notice: Councillors appear to be breaking the law in order to enforce Bedroom Tax evictions. [Picture: The Guardian}
It seems the ruling group of Powys County Council, here in Mid Wales, has challenged the law in its attempts to block a ‘no-eviction’ motion on the Bedroom Tax.
The Labour motion was put forward at a meeting of the full council on October 24. It called on councillors to note the comments of Raquel Rolnik, the UN’s Special Rapporteur on Housing, who said that the Bedroom Tax policy could constitute a violation of the human right to adequate housing, and asked them to pledge that Powys will not evict tenants who fail to pay their rent because of it.
Councillors who are also private landlords were forbidden from speaking or voting on the motion. They have a financial (or pecuniary) interest in the matter as they stand to benefit if social housing tenants are forced to seek accommodation with them as a result of the policy. This meant around 30 councillors had to leave the chamber.
It seems that members of the ruling Shires Independent Group, realising that there was a real possibility that the motion would be carried, then called for any members who are themselves social housing tenants – or have friends or family who are social housing tenants – should also be barred from taking part.
This made it impossible to continue the debate. The matter has been passed to the council’s Standards Committee, whose members have been asked to judge whether landlord councillors should receive special dispensation in order to debate the motion.
It seems that this decision is wrong in law.
According to Essential Local Government, a journalistic textbook from the Vox Political vaults, “In some cases, the Secretary of State for the Environment or Secretary of State for Wales can issue either a general or particular dispensation entitling members with declared interests to take part in debates and to vote. An example of this is that councillors who are council tenants may take part in debates on, and vote on, matters relating to council housing.”
That book was published in 1993 but there is no reason to expect such a general dispensation to have been removed and therefore it seems that any call for councillors who are tenants – or who know tenants – not to be able to take part in a debate can have no basis in law.
The motion should have been debated by councillor-tenants and members with no interest, and a decision made on the day, nearly a month ago. The delay means social housing tenants in Powys (and VP knows of 686 affected households in the Brecon and Radnorshire constituency alone) may have been subjected to an unnecessary month of evictions or threats of eviction.
It has been suggested that the decision to block the motion may have been prompted by figures from the House of Commons library which suggest that as a result of the Bedroom Tax the amount of Housing Benefit paid to private landlords (remember, HB is a landlord subsidy and does not enrich tenants at all) will rise from £7.9 billion to £9.4 billion.
If the Standards Committee decides to allow them to debate the motion, it is likely that the decision will therefore be corrupt.
The matter went unreported by the local press because none of the newspapers had sent any reporters to cover the meeting.
[Image: Anti-Bedroom Tax and Benefit Justice Federation]
This is how the right-wing media try to stifle popular protest against their masters – by trying to distract attention away from the facts.
There can be no doubt about what today’s big news story is: According to the Daily Mirror, hundreds of thousands of families have been put into rent arrears because of the ConDem government-imposed Bedroom Tax – and, according to the Independent, 50,000 of those people are now facing eviction.
Isn’t that exactly what the United Nations special rapporteur on adequate housing, Raquel Rolnik, was saying at the end of her recent tour of Britain to investigate the effect of the Bedroom Tax (often wrongly described as the spare-room subsidy. A subsidy would give money to people; this takes it away)?
Article 25 of the Universal Declaration of Human Rights (to which the UK is a signatory) includes housing as part of the “right to a standard of living adequate for the health and well-being of himself and of his family”.
But Ms Rolnik said that in Britain “the most vulnerable, the most fragile, the people who are on the fringes of coping with everyday life” were being hit hard by the policy – and called for it to be abolished.
The alleged newspaper published a series of character assassination pieces on the internationally-respected United Nations special rapporteur, in which it criticised her for staying in a £300-a-night hotel (booked on her behalf by the United Nations and nothing to do with her personally), and for being born in a country (Brazil) that it described as “violent” and “slum-ridden” (an accident of birth).
It also quoted some stupid Tory lucky-to-be-an-MP called Stewart Jackson, who said she was a “loopy Brazilian leftie”.
But none of its claims about her mission – or those of the Tory MPs it quoted – were true. All were refuted within a day of being voiced.
Today, the Mail thinks it is more important to tell us that the B&B owners who refused to let a gay couple stay on their premises have been forced to sell up because of lack of business.
That other bastion of Conservatism, the Torygraph, tells us that Conservative MPs are on a mass outing to Chipping Norton today. How wonderful for them.
One couple for whom Chipping Norton isn’t wonderful consists of Toni Bloomfield (25), who lives there with her partner Paul Bolton (42) and his four children.
“I have to pay £98 extra a month since the bedroom tax came in,” she told the Independent. “We’ve got a four-bedroom house and Paul’s four children, aged between two and eight, live with us. Before the school holidays we were struggling and now we’re nearly three months behind on rent.
“The children get free school meals and feeding them through the holidays was tough. Paul and I are only eating in the evenings two or three nights a week to make sure we can put enough food on the table. We’re not working, but not out of choice. Trying to find a full-time job here is a nightmare.”
Chipping Norton is the home of David Cameron, when he isn’t pretending to be the Prime Minister, and lies in his constituency of Witney. If people in the Prime Minister’s constituency can’t get on in life, what hope does anyone else have?
It would be interesting to hear more from Mr Bolton and Ms Bloomfield. What is it like, living below the breadline in the home of the infamous ‘Chipping Norton set’? Do they rub shoulders with Jeremy Clarkson down the supermarket (when they can afford to go)? If so, would they kindly suggest to him that he lay off the drink for a while, as it’s encouraging him to say silly things about standing for election?
The information supporting the story was supplied by campaigning group False Economy, which submitted Freedom of Information requests to local authorities across the UK. Of these, 114 replied, providing the figure of 50,000 tenants threatened with eviction.
As not all local authorities responded, the newspaper stated that the total number of affected council tenants was likely to be much higher.
Separate research by the National Housing Federation swells this number by 30,000 housing association tenants, the Independent states.
Clifford Singer, campaign manager for False Economy, said: “Together with the raft of other benefits cuts the Government has forced through, both this year and previously, the bedroom tax is driving tenants and families who were just making ends meet into arrears, and pushing those who were already struggling with the cost of living into a full-blown crisis.”
The Daily Mirror‘s report estimated 330,000 families to have fallen behind with their rent, including around 165,000 who always paid on time in the past.
The reality of the situation is that it shows how badly wages have slipped since Margaret Thatcher came into power with all her silly neo-liberal drip-down economic theories. The Bedroom Tax is a threat because working people do not earn enough to pay the rent along with all their other overheads. This is why the Housing Benefit bill has blown up to huge proportions; if only the unemployed were claiming it, it would be manageable. Employers are to blame – partly.
And who really benefits from Housing Benefit? Not the tenant! No, the people who really receive Housing Benefit are landlords. This is why some, including this blog, have called for it to be renamed ‘Landlord Subsidy’. So part of the blame must also lie with them and the amounts they charge – especially for council houses, where the money never really leaves the local authority’s bank account; it would go out, only to be paid straight back.
So we can say that the debt into which these people have fallen is not their fault; working people should be paid enough to be able to cope, and the unemployed should be able to rely on the state to support them until they can get back on their feet – without the state, itself, going into debt.
It has been created because, somewhere along the line, somebody has been taking too much money for themselves.
Not evil: We have reason to believe that Iain Duncan Smith’s policies have led to the deaths of dozens – if not hundreds – of sick and disabled people every single week. We have reason to believe he is suppressing evidence of the number of deaths caused, which in turn leads us to believe that it is a greater number than we have imagined so far. And we have reason to believe he has done so, in order to avoid the inevitable public outcry that would follow such a revelation. Do YOU believe that these actions are not evil?
Following on from the previous article in this series, let’s look at the consequences of hiring organisations that have no moral compass, to carry out vital public work – and the implications about the governments that take them on.
It has long been the attitude of this blog that the leaders of the Conservative Party are evil creatures, and this conclusion is borne out by their actions. Today this contrasts starkly with the opinion of fellow leftie Owen Jones, writing in The Independent, who has claimed it is wrong to label them in that way.
He cites some of the best-known examples used by people to prove the evil of the Tories: “It is projected that over a million children will be driven into poverty by this Government’s policies[wage depression, cuts to benefits, cuts to landlord subsidy].Half a million people, unable to properly feed themselves in one of the most prosperous countries, have been driven to food banks, particularly because of cuts to benefits or delays in payments. Sick and disabled people are being stripped of support[work capability assessments carried out by Atos].The bedroom tax is punishing hundreds of thousands for the failure of successive governments to build council housing[and landlords including social landlords will evict them]. Cuts to in-work and out-of-work benefits have been imposed as a cynical ploy, to paint Labour as the party of welfarism: the cost of such political manoeuvring [being] more people having to choose between heating and food[in fact the Conservatives are the party of welfarism. They talk about the social security bill rising 60 per cent under Labour, but under the Conservatives is rose by as much as 80 per cent in a single year (1982-3, if memory serves)].
But he says these wicked, immoral acts, enacted by the most privileged in British society upon those who have no defence against them, are not evil. “‘Evil’ is a comforting, but worrying concept,” he writes. “Its connotations are so extreme that, by applying it to someone, you at a stroke strip them of their humanity; you cease in any way to be able to imagine their rationales or thought processes; they simply become a cartoon villain, for whom the ultimate thrill is the inflicting of misery. As soon as you fail to understand your enemy, they have already defeated you. It would be easy to imagine the Tories as a cabal of upper-class sadomasochists, spending their evenings plotting ever more devious ways to hunt children on council estates like rural foxes. But it misses the point.”
Sorry, Owen, but on this one I think you’ve missed the point.
Look at the most commonly-cited example of evil we have: Hitler. Sorry to drop the H-bomb but this is relevant: He was genuinely evil. But he was not a “cartoon villain”. Those who fought him did not see him as an inhuman or alien creature. They certainly did not believe his only aim was to inflict misery (although he did, and in similar ways to the current UK administration – look at the way both have treated their sick and disabled). Hitler’s opponents did not see their enemy as a creature they could not possibly understand; instead they spent huge amounts of time and effort trying to get into his mind – even bizarrely decorating their offices with Nazi paraphernalia, dressing like him and trying to look like him in the scramble to comprehend what made him who he was.
They would have agreed with Mr Jones – as I do – that it is necessary to understand an enemy in order to defeat them. But by this yardstick, Owen would be saying Hitler wasn’t one of the most evil men to blight the 20th century – and he clearly was.
Hitler did what he did because he thought it was the right thing to do. He believed – passionately, just as Iain Duncan Smith believes – that his policies were the best, not just for Germany but for the world. He believed that the German people – the Aryan race – were the inheritors of the Earth and he had a duty to bring them into their inheritance. He believed that other races – particularly the Jews, but also the Romany, and undoubtedly others as well – were inferior and that it was all right to use them as slaves in order to achieve the aims of his master race, while expending as few resources feeding and clothing them as possible. And he was surrounded by people who believed the same. Alternative ideas were suppressed.
Isn’t this exactly the same as Owen’s own rationale for the way Conservatives behave? “Most of us like to believe we’re ‘doing the right thing’,” he writes. “A politician introducing a policy that any independent observer will find drives people into poverty will privately justify it to themselves as necessary or unavoidable or for the long-term good of those affected. It allows people – on the right as well as left – to stubbornly believe things in spite of all the facts.” Like Hitler in the final months of World War Two? Like David “There Is No Alternative” Cameron?
“As is well known, the Tory front-bench is drawn from the most privileged sections of society. Such a background can – though not inevitably – lead to a failure to understand why people may struggle to get by,” Owen writes. Hitler’s background led to a failure to understand that he did not have a right to persecute sections of society he didn’t like – and Iain Duncan Smith’s background has led to the same failure. “It means mixing with other prosperous people, who they may see as the real drivers of prosperity who just need to be left to their own devices, freed from meddling governments and unions.” In Hitler’s case, he believed that the government and businesspeople needed to work together to bring about prosperity for the people – whose duty was to follow these leaders and service their needs blindly. “Easy, then, to justify policies that benefit the rich (who you see as noble wealth-creators) and punish the poor (who you see as those too feckless to climb the social ladder without prodding).” Easy, then, to justify policies that benefit the Nazi (who you see as a noble wealth-creator) and punish the Jew (who you see as a parasite, sucking money out of the state).
Conservatives are not a large section of the population. Those who are politically active are a tiny minority – the Tory Party is in fact a minority-interest organisation, promoting the interests of the very, very rich – so branding the Tories as evil is not casting a large section of the population in that light. Most of the people who support the Tories are misguided, rather than evil – they believe too much of what they read in the right-wing newspapers.
But Iain Duncan Smith’s determination to wipe out a whole section of the population just because their bodies don’t function the same way his does? That’s evil. George Osborne’s determination to stick to his austerity policies, even though he now knows there is no justification for them whatsoever? That’s evil. The Tory privatisation schedule that is intended, for example, to put decent healthcare out of the reach of the poor for generations to come, leaving them vulnerable to the revival of some of the least pleasant diseases and health conditions this country has ever seen? That’s extremely evil.
The way privatisation was presented as a way of democratising ownership of the national utility companies, when in fact the long-term plan was for the shares to be sold out of the hands of the working- and middle-classes who were ignorant of how to handle them properly, leading to huge dividends for people who were already rich, higher prices for the poor (to pay for those dividends, and the executive salaries they justified), and continued support from successive governments when the privatised companies failed to plough their profits back into their industry in investment? That was very evil too.
“Manipulating fears over, say, immigration or crime”?Evil.
“Exploiting existing divisions in working-class communities”?Evil.
Manipulating the press to present them as helping the poor, when in fact those who have the least are being hit harder than they have been for generations – while alternative opinions (with some honourable exceptions, Owen) are suppressed? Evil.
I like Owen Jones, but he’s wrong on this one. The Conservatives must be made to accept responsibility for the evil they are doing. He should not be giving these creatures of evil a way out.
How pleasing it is to see the Archbishop of York agrees with the view, long-held by Vox Political, that British workers should be paid a living wage, and that the taxpayer should not be subsidising big business!
Archbishop John Sentamu is to chair a year-long commission investigating the need for a living wage. In The Observer, he wrote: “The holes in millions of paycheques are being plugged by in-work support to the tune of £4 billion a year. But why aren’t those who are profiting from their workers paying up? Why is government having to subsidise businesses who don’t pay their employees enough to live on? It is a question we need to answer and act on – fast. The cost of living is rising but wages are not. In the rush for profit, and for high pay at the top, too many companies have forgotten the basic moral imperative that employees be paid enough to live on.”
Needless to say, there are also detractors. A commenter known as ‘neilcon’ pointed out: “The high cost of running a small business in this country is one of the main reasons why the hourly rates are so low. If you employ someone at £8 you then have to pay a further 13 per cent to the government in employer’s National Insurance contributions for the privilege of employing someone; you have to supply that person with suitable equipment for their work.” The commenter reeled off a few other business-related expenses before going on to “the issue of the banks utterly refusing to lend to small businesses, the high cost of renting office premises, business rates on your office premises to the government, the high cost of VAT, together with clients trying to squeeze the final price as much as possible and the very late payments by bigger companies.
“The real cost to an employer of an £8 per hour wage is calculated at about £15 to the business.”
I can sympathise with this sentiment. It doesn’t let off the bosses of larger companies, who have huge salaries and no excuse (FT 350 companies, for example) but they might have a reasonable excuse for not raising pay, if smaller companies say they’ll go out of business if the higher cost is forced on them.
But the simple fact is that the cost of living is too high and – if they had to rely on wages alone – millions of working people, up and down the country, would be unable to pay their bills…
He wrote: “More than £100 a year of an average household [water] bill, that is about 30 per cent, goes on profit, compared with 9 per cent in the energy sector which is itself known for egregious profiteering.
“In the last 10 years, water bills have risen by a massive 64 per cent, compared with an increase of just 28 per cent in average earnings. In the last three years alone, average earnings have fallen by 7 per cent while water bills have continued to rise remorselessly. There is no competition in the water industry and the only potential constraint is the industry regulator, but he has chosen to succumb to corporate lobbying in allowing water bills to continue to shoot upwards to feed fancy executive bonuses and big dividend handouts.”
The last sentence tellingly brings us back to the huge profits taken by executives. It seems that a few things are going on:
1. The privatisation of the national utilities – water, electricity, gas (and, some would say, telecommunications) – has failed in its stated aims, which were to democratise capitalism by making it possible for everybody to be a shareholder, to keep bills low, and to end government subsidies for these organisations. Instead, shares have been drawn into the hands of a very few rich investors, bills have risen far beyond wages, and government subsidies have either increased massively (rail) or companies have used the tax system to avoid paying the amount due on their profits (Thames Water and its ‘super sewer’).
2. Company bosses, keen to drive up their share prices in order to create larger dividends for their shareholders and higher salaries for themselves, have successfully held wages down in order to achieve this. As ‘neilcon’ pointed out, lower wages mean less spending on National Insurance, meaning that keeping the employee payout down by pennies per person leads to many pounds in increased revenue.
3. The government is unwilling to do anything about this because it wants to keep wages depressed as much as possible. This is the reason it has cracked down so hard on benefit payments – not because of fraud (which is minimal) but in order to create an urgent need among the unemployed to find work, and terror in those who have jobs that they could be replaced if they complain about the increasingly meagre pittance on which they are being told to survive.
There are many subtle sub-consequences as well. You may wish to raise some of them in the ‘comments’ column.
What’s the answer?
This may come as a surprise, but the best place to start might be with the private utility companies. An ultimatum to put their houses in order and charge a reasonable amount, rather than extorting money out of a captive clientele, might produce results – especially if the alternative is re-nationalisation.
This might take the pressure off the smaller private companies by actually reducing the amount calculated as the living wage; with lower utility bills, the amount of money needed for a working person’s survival will also drop.
If the government and the utility companies got their sums right, this could mean the need to subsidise working people’s pay would be wiped out, meaning a large saving on the tax bill. Feed this through to working people in the form of a tax cut and, again, smaller private companies would benefit (along with everybody else, of course). An alternative of using the money to help pay off the deficit would be unhelpful – we need more, and healthier, businesses in this country, employing more people. Get that sorted and the deficit will come down in any case.
On a completely different tack, what about Landlord Subsidy (otherwise known as Housing Benefit)? Why not put a cap on rents, thereby ensuring that the government is not subsidising the rapidly-increasing pace of (some) landlords’ greed?
Unfortunately, this is not likely to happen under the current Conservative/Liberal Democrat Coalition government – and it seems the Parliamentary Labour Party is to keen to become the Plastic Tory Party to take a stand; it will be up to its backbenchers and the party’s grassroots members to force a policy change.
At the end of the day, wages might still have to rise, due to matters unforeseen in this article.
But a plan that acknowledges the mistakes of the past and aims to redress the shocking way that the supply of money has overbalanced to favour a tiny minority – to the detriment of the vast majority – would constitute the first steps on the way to a nation that can not only provide Archbishop Sentamu’s living wage, but also help our struggling small businesses.
You may be astounded to learn that, despite the veritable mountain of information in my 700-word missive, some people still did believe it!
Admittedly, they waited a while before breaking cover, but sure enough, in the letters page of the Brecon and Radnor Express dated June 6, a Mrs Lloyd of Brecon wrote the following:
“I must write to convey my disappointment at the handful of people who have written to your paper recently opposing welfare reforms. I assume from the tone of these letters that they are probably Labour Party supporters.
“Like lemmings blindly following each other off the cliff, these people have decided to oppose one of the most popular government policies in recent memory.
“I am no great fan of the Lib Dem/Conservative coalition but this handful of socialist Labourites must be the only people left in the UK who don’t think the welfare system needs urgent reform.
“I say I am disappointed because I have always voted Labour and it saddens me to see Labour so out of touch with public opinion.
“Our benefit system is far too soft and state handouts simply must be cut. Why can’t Labour see this?
“I am also ashamed that the local Labour Party… has decided to adopt a policy of scaremongering by trying to label one reform as a ‘bedroom tax’.
“It is not a tax and Labour knows that full well.
“A tax is a levy on something you own, earn or purchase: state provided housing benefit is none of these.
“Is it any wonder that people do not trust politicians when an established and legitimate political party like Labour resorts to such trickery?
“Having spare rooms wasting at the taxpayer’s expense is simply inexcusable and unaffordable.
“Why do Labour want the taxpayer paying for people to be in large flats or houses with unused bedrooms, when there are larger families who need this space?
“If people receiving housing benefit refuse to move to smaller housing and insist on staying in excessively large accommodation, then they should be prepared to pay for it just like every other family.
“To be fair to the Conservatives and the Lib Dems, they have decided to tackle an issue that Labour feels it cannot.
“The cynical amongst us would say Labour’s refusal to support benefit reform is because of their historic reliance on the votes of the unemployed and those receiving benefits.
“A turkey doesn’t vote for Christmas.”
You’re probably shaking your head in disbelief but in fact this is quite a cleverly-constructed letter. Look at the way she tries to establish that right-thinking people must approve of the way Iain… Smith and his mates are hacking apart our social security and that anyone who doesn’t – “probably Labour Party supporters” are a “disappointment”. She later attempts a feat of mind-reading when she tells Labour members that they feel they cannot tackle an issue that the Coalition parties have – and her final comment attempts to tar Labour with dishonest, or at least covert, intent by claiming that the party relies on the unemployed and benefit-receiving vote. One might hope that Labour’s recent adoption of a harder attitude to benefits will have persuaded Mrs Lloyd that this is not true, but this is by no means certain. It wouldn’t suit her purposes.
I particularly enjoy the next line because it conflates two gross misapprehensions: Lemmings do not fling themselves over cliffs suicidally. The makers of a Disney (!) documentary created that myth for reasons of their own, and it seems likely that Mrs Lloyd had reasons of her own for running it together with the myth that the Coalition cuts are “one of the most popular government policies in recent memory”. They’re not, and never have been.
Labour does not oppose welfare reform. It opposes the Coalition’s attack on the poorest and most vulnerable in society, carried out under the pretence of reform. The only Coalition welfare policy that has won any popular support – the benefit cap – is also supported by Labour. But the average family income is not £26,000 per year, as the Coalition states – that is a lie. That family would receive state benefits, bringing its income up to £31,500, or slightly more than £600 per week. This was glossed over because the Coalition would not be able to penalise enough poor people if the cap was set at that – realistic – level.
The other cuts to social security benefits have provoked a storm of protest – particularly the genocidal pogrom against the sick and disabled, and also the bedroom tax, which Mrs Lloyd singles out, and to which she applies her own quaint definition of ‘tax’.
So let’s put her straight. It is a tax, as it is a compulsory contribution to state revenue, levied by the government against a citizen’s property, to support government policies. Mrs Lloyd seems unaware that 97 per cent of the 600,000 families it affects – that’s 582,000 families – simply have nowhere else to go. The smaller accommodation into which she expects them to move does not exist. And the definition of ‘bedroom’ has been applied to small box rooms that would not accommodate a bed, let alone the person who would be expected to sleep in it! The tax is therefore exposed as a scheme to screw money out of the very poor, put them into arrears with their landlord, and sling them onto the streets.
This is why I support the redefinition of these ‘spare’ bedrooms, as taken up by some councils, into ‘offices’ or ‘non-designated rooms’. This is legal tax avoidance – putting the tenants of such homes into the same category as the billionaires who are sitting on £21 trillion of untaxed earnings in offshore tax haven bank accounts. If the government kicks up a fuss about ‘bedroom tax’ avoidance, it can damn well go and get those trillions back first.
As for the taxpayer being made to pay for unused bedrooms, that decision was made by the Coalition government, not the Labour Party, when it decided to cut Landlord Subsidy (that’s Housing Benefit to you, Mrs Lloyd) rather than cap rents at a reasonable level.
The remark that people are refusing to move to smaller accommodation is so far removed from reality that it defies belief, as is the implication that they do not pay anything towards their rent. For Mrs Lloyd’s information, the vast majority of Housing Benefit claims are made by people in work, who do pay the majority of their rent; the amount of Housing Benefit they receive is a top-up because the wages they receive are too low. I don’t see you blaming employers who have increased their own pay eightfold over the last 30 years, while employees’ pay rises total just 27 per cent – far less than cumulative inflation, Mrs Lloyd.
The opinions expressed by this correspondent are based on nothing but myth and should be fought tooth and nail. If her distorted views are accepted as fact by the majority of the voting population, then the Conservative Party will win the 2015 election, and those of us who value facts and honesty will only have ourselves to blame if we have not done all we can to rectify matters.
By the way, the Brecon and Radnor Express‘s editorial email address is [email protected]
I was going to write about a more recent letter to the same newspaper, which prompted me to contact the UK Statistics Authority with a complaint. But that will have to wait for another day.
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