Citizens Advice has just confirmed what many of us have known for some time – that the end of the Tory benefit freeze won’t help people who are struggling to make ends meet.
The simple fact is that the freeze, alongside inflationary price increases, mean people on benefits simply don’t receive enough to afford the basic human rights.
And any increase approved by the Tories will only continue the hardship.
So, if you’re on benefits – even if you’re working – you still have to decide between buying food or heating your home.
According to Citizens Advice, the number of people who are unable to cover basic living costs has increased since the benefits freeze came into force in 2016.
In the first five months of the current financial year, 40 per cent of the people the charity helped with debt who claim income-related benefits didn’t have enough money to cover their living costs – an increase of 25% since the freeze came into effect.
However, the charity argues that ending the freeze won’t be enough to help people … and are calling for wider reforms to the benefits system to ensure that payments cover day-to-day living costs.
This includes ensuring Universal Credit gives people enough to live on by reviewing areas such as the amount of money retained by working claimants, and deductions for those dealing with debts or repaying advance payments.
Fat chance!
We’ve been down this road enough times already. The Tories won’t budge.
They know it pushes people into hardship; they know it nudges some people to consider – and others, regrettably, to go through with – suicide. And they simply don’t care. It’s time we all understood that.
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The next election will see voters punish the Prime Minister and her party for presiding over a ‘lost’ decade [Image: Getty].
Commentators who have been holding on to Theresa May’s high-ish poll ratings for dear life are about to have a nasty shock, if this Independent article has any truth to it.
Living standards in the UK are plummeting and the Conservatives cannot blame Labour for the pain.
The damage has been done by Tory policies – carried out under the lie that “We’re all in this together”.
Theresa May promised to govern for everybody, including the JAMS – those who are ‘Just About Managing’. Instead she will squeeze them dry.
Her chancellor, Philip Hammond, has refused to invest in people, meaning there is no hope from government funding.
It’s a shame that the author of this piece, Andrew Grice, is unable to keep his own political bias out of it.
“Labour is off the public’s radar,” he writes. Is that not because influential periodicals like the Independent are saying so?
And if that is true, then why is Mr Grice using Labour to point out the inadequacies of Tory Brexit policy? He writes: “Even if voters blamed the income squeeze on Brexit, that would not necessarily spare May. Labour is already attacking what it calls a ‘shambolic Tory Brexit’.”
And if “Labour still trails the Tories on economic competence”, that can only be with the connivance of commentators like Mr Grice.
If everybody were to make their judgement according to the facts – as laid out in this Vox Political article – Labour would certainly be faring much better.
But then, as that article points out, rich media bosses want to con their readers and viewers into voting for the party that helps rich media bosses.
The next election will be fought amid a “feel-bad factor”, the opposite of what any governing party wants. The decline in living standards will have happened on the Tories’ watch.
While the Autumn Statement looked thin, it told us a lot about the May Government… Philip Hammond did very little to alleviate the pain that is coming on living standards, as inflation rises faster than wages. The bleak forecasts from the Institute for Fiscal Studies and Resolution Foundation think tanks should worry May, as they show how hard the “Jams” will be squeezed. She will not meet the great expectations she aroused in July without a major change of course.
The Tories are already trying to repeat their old trick of blaming Labour – this time for the wage stagnation since the 2008 crash… But it won’t wash this time. The Tories argue that the think tanks’ numbers do not take account of the higher personal tax allowance and claim that “real household disposable income” is rising by 2.8 per cent, the highest ever increase. But this won’t cut any ice with the “Jams”if they are worse off overall, as they surely will be.
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Did we just have the worst-ever Budget from Britain’s weakest-ever Chancellor? All the indications suggest it.
George Osborne stole his best ideas from the Labour Party and claimed he was trimming his planned austerity back – raising mockery from those who said he was running like a rabbit from Labour’s “back to the 1930s” attack.
“George Osborne blinked,” said Paul Mason on Channel 4 News. “He looked at the scale of austerity he promised in December and realised it wasn’t going to be that popular.”
Did he, though? An alternative view might be that he has been trying to trick us – setting out a plan that suggests a horrific level of cuts at first, then claiming to relent and suggesting that he will inflict less damage and spend lots at the very end of the next Parliament.
So his promise is hideous suffering for four more years, with the vague possibility of greater spending at the end of it – if all has gone well.
Based on his current record, that’s a promise George Osborne can’t keep. Did he balance the books in this Parliament? No. Did he cut the deficit without cutting frontline services? No. Did he balance austerity fairly between the poor and the rich? No – the poor have taken a hugely disproportionate amount of the pain while the richest in the UK are now twice as rich as they were in 2009; for them, we have been in an economic boom.
What a shame those “naughty Trotskyites” (thank you, Mike Collins) at the Torygraph had to burst Osborne’s balloon by pointing out the huge growth of the national debt on his watch – more than £517 billion so far, which is more than every Labour government in history.
Labour’s bank levy and the changes to pensions that would have funded Labour’s tuition fees cut were stolen by Osborne. This is why Labour has been keeping future policies quiet – to prevent such things from happening. In making these moves, Osborne has helped Labour because critics of Labour’s failure to announce policies in advance will now have to shut up.
He said living standards would be back where they were in 2010 by the end of the current financial year – but using a scale (Real Household Disposable Incomes) that is disputed, and in any case is only a projection. According to the Mean Income scale, we’re nowhere near.
And Osborne’s claim assumes that household incomes will rise by no less than 3.1 per cent this year. Unlikely!
And remember – as Mr Mason put it: “Prices are falling because of oil prices and potential deflation; it’s not because a load of bricklayers and plumbers and taxi drivers are putting down their prices – and wages up.”
He repeated the claim that he has halved the deficit – but this is as a proportion of GDP. What if we have another economic shock (as seems likely) and GDP drops? Suddenly that figure won’t look as good. In money terms, the deficit has come down by around one-third to something like £90 billion a year. This means Osborne hasn’t even achieved what the previous Labour chancellor, Alistair Darling, said was possible in 2010 – and Labour would not have caused anything like the misery George Osborne’s party and the Liberal Democrats created for people on housing benefit, the sick, the disabled, and low-paid workers.
He didn’t mention the huge budget cuts to come over the next five years (if we get lumbered with more Tory rule) – worse than “anything over the past five years”
As the BBC’s Robert Peston tweeted: “If Tories win, OBR says ‘sharp acceleration’ in pace of cuts to day-to-day spending on public services & admin 2016-17 & 2017-18.” In those two years – under Tory rule – we would get double the amount of austerity cuts that we’ve had at any point in the last four. We don’t even know where those cuts will happen.
It is important to note that we won’t get cuts on anything like this scale under a Labour government, according to shadow chancellor Ed Balls.
In the meantime, Osborne has managed to pull a few rabbits out of his hat:
The tax allowance has been raised again, lifting more low-earners out of paying Income Tax. But those working part-time on low wages, including most apprentices and people who are self-employed, are already unlikely to pay income tax and will miss out entirely on the benefits of this tax change.
Meanwhile the threshold at which people will pay tax at the ‘high’ 40 per cent rate will also rise, meaning people earning up to £42,384 will get a massive tax break.
Beer duty is being cut again.
There will be a new savings tax break, meaning more than 90 per cent of savers won’t pay tax on this money.
And Osborne is launching a new ‘help to buy’ ISA for people trying to get on the property ladder.
All of these remove income from the Treasury, meaning the austerity measures Osborne plans to introduce will be more severe than you may be expecting. Note that the high-earners benefiting from the rise in the tax threshold will profit again – they can’t be hurt by cuts to benefits they don’t receive.
And what about tax dodging? Osborne omitted his failure to tackle this issue from his Budget speech. Perhaps this is because the wounds inflicted by the HSBC scandal are still too raw; perhaps it is because everybody knows Osborne and the Coalition have re-written tax law to make avoidance much easier for the filthy rich and the corporates. 38 Degrees caught the mood in a nutshell:
Regarding the ‘help to buy’ ISA, it’s notable that Osborne didn’t mention the lack of new homes built since 2010.
Osborne did not mention the Coalition government’s disgraceful treatment of the National Health Service at all. There will be no new money for the service. His omission prompted the following – scathing – response:
However, as Mark Ferguson of LabourList pointed out on Twitter: “Cameron again takes credit for more doctors. Now it takes seven years to train a doctor. So those are Labour’s doctors.”
Oh, and there was a sideswipe at the SNP. North Sea oil revenues have taken a vertiginous tumble as a result of the cut in oil prices, meaning investment has also declined markedly. Osborne has cut the supplementary charge and introduced investment incentives to prop up this income stream, in a move that Tom Bradby describes as “trying to shoot SNP foxes”.
On employment, Osborne quoted his claim that there are 1.9 million new jobs and the jobless rate is at 5.3 per cent. He omitted the figures on how many are zero-hours (1.8 million in a snapshot taken last August) or off the dole due to sanctions. The number of people unemployed and not claiming JSA is at its highest level ever, as this graph shows:
[Thanks to @InclusionCESI for this information.]
So, as one commentator put it, the Tories go into the 2015 general election with debt, in-work poverty and net migration higher – and the NHS in crisis compared to 2010.
Labour’s Michael Dugher followed up on this with: “Are the Tories really going to run on ‘You’ve never had it so good’?”
He has offered a few small freebies in a lame bid to influence the vote, hoping all the while that you won’t ask questions about the important economic issues he hasn’t bothered to mention.
Not only are we at the end of a zombie Parliament, but its own chancellor has crippled it in its final lurch to the election.
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This graph is now out of date but shows the rapid rise of the zero-hours contract. By the end of 2014, the number of people on zero contracts was 697,000, according to the ONS. [Image: Eoin Clarke.]
Number of people employed on a “zero-hours contract” in their main job was 697,000 for October to December 2014, representing 2.3% of all people in employment. In the same period in 2013, this was 1.9% of all people in employment (586,000).
The number of people saying they are employed on “zero-hours contracts” depends on whether or not they recognise this term. It is not possible to say how much of the increase between 2013 and 2014 is due to greater recognition rather than new contracts.
Number of contracts that do not guarantee a minimum number of hours where work was carried out was 1.8 million for the fortnight beginning 11 August 2014. The previously published estimate was 1.4 million for the fortnight beginning 20 January 2014.
The two estimates of contracts should not be directly compared. They cover different times of year so changes in the numbers may reflect seasonal factors.
On average, someone on a “zero-hours contract” usually works 25 hours a week.
Around a third of people on “zero-hours contracts” want more hours, with most wanting them in their current job, compared with 10% of other people in employment.
People on “zero-hours contracts” are more likely to be women, in full-time education or working part-time. They are also more likely to be aged under 25 or 65 and over.
Over half of businesses in Accommodation and Food Services and a quarter of businesses in Education made some use of no guaranteed hours contracts in August 2014.
This is at a time when the Organisation for Economic Co-operation and Development has said the UK has bounced back strongly from the recession and has one of the strongest economies in the G7 nations.
Admittedly, the OECD has said productivity – stagnant for many years now – must improve in order for living standards to rise, but this is not part of the zero-hours plan. The Conservative-led Coalition wanted to put as many people as possible into jobs of any description, in order to claim a drop in unemployment – but zero-hours contracts, while helping businesses by eliminating in-work benefits like sick pay and holiday pay, do not help productivity at all; they use more people to achieve the same result.
In the case of the UK, it seems, they have been achieving worsening results, as dipping tax receipts have made all-too-clear. George Osborne claimed a surplus in January, but this is clearly a manufactured result, formed from panic after the last few tax revenue figures became public.
So what does Labour say about all this?
Scottish Nationalists will be surprised to learn that the party Pete Wishart believes is “cuddling up to the Tories” was unequivocally critical.
“The Tories’ plan is failing working families,” said Chuka Umunna, shadow business secretary.
“While they prioritise a few at the top, for others there’s a rising tide of insecurity. Ministers have watered down every person’s rights at work and zero-hours contracts have gone from being a niche concept to becoming the norm in parts of our economy.
“The ONS’ findings today that there are now 1.8 million zero-hours contracts and that the number of people reporting they are on a zero-hours contract for their main job has risen by almost 20 per cent is yet another stark illustration of a recovery which is not working for working people.”
He said: “Labour’s Better Plan for Britain’s Prosperity would ban exploitative zero-hours contracts, prohibit employers from requiring workers to be available on the off-chance they are needed, ensure zero-hours contract workers who have shifts cancelled at short notice receive compensation and give employees who consistently work regular hours the right to a fixed-hours contract.
“Ministers have sat on their hands and opposed our plans, in the face of rising insecurity for people.”
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The BBC is reporting that the UK economy has grown by 2.6 per cent in the last year – less than the 3 per cent originally thought. In the third quarter of 2014 the increase was 0.6 per cent.
“So what?” you’re probably asking. “Isn’t 2.6 per cent enough?” Well, it’s certainly much better than the limbo days of 2011-13 when the economy was in and out of the red and Ed Balls’ claim that it had “flatlined” was literally true.
The lower growth has been attributed to smaller government and business investment than had previously been expected, and higher imports.
There’s nothing to be done about the increase in the balance of payments deficit (that’s the difference between import costs and export takings) to 27 billion – especially if both government and business investment is down; it seems that Britain simply has nothing to sell.
So much for the “nation of shopkeepers” as Napoleon Bonaparte (among others) famously described us!
Perhaps George Osborne has restricted government investment in order to meet his (revised-revised – and probably revised again) deficit reduction target for 2014-15. If so, he’s even more of a short-sighted fool than we all thought because this will cause greater harm in the long run.
And there’s also the impending crash when the property bubble created by Osborne’s artificially-engineered housing boom pops. Help to Buy and Funding for Lending stimulated the economy when the private sector ignored Gideon’s call for help, but won’t go on forever.
But what does all this mean for the average person on the street?
Not much, it turns out.
All this talk of economic improvement may sound good – indeed, it is intended to do so. But it hasn’t translated into any improvement in living standards. They’ve been plummeting ever since the Conservative-led Coalition government took office.
Tories are bad for the nation’s living standards. So are Liberal Democrats.
Household incomes have dropped by a massive £1,600 every year – a huge amount for the poorest to bear and a considerable inconvenience for those of middle incomes as well.
Pay rises have been non-existent or below the level, even of CPI inflation – which doesn’t take into account all the costs that households must bear. That’s why the Tories and Liberal Democrats switched to using it as their main indicator back in 2010.
Where are all the new full-time jobs?
The only people to benefit from any economic upturn have been the corporate bosses and the Conservative Party (thanks to donations from the corporate bosses).
This means that, instead of asking, “So what? Isn’t 2.6 per cent enough?” you would be better-advised to ask:
“So what? When do I get my share?”
The answer is: “Under the Conservatives and Liberal Democrats?
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I know what you’re thinking: “Well, duh! Of course that’s true.” It’s a fact that has bypassed the UK’s political leaders for too long and perhaps they need to be reminded. Here’s the gist, from Inequality Briefing:
Reducing the share of total UK income going to the richest 1% to Dutch or Danish levels & sharing the difference across the rest of the population would be worth an extra £2,500 a year to every household
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A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.
If anybody else had prattled on for 50 minutes while hardly uttering a single sensible word, they would have been consigned to a mental hospital forthwith.
But this is Coalition Britain, and the speaker was George Osborne, the man who likes to tell us all that he is in charge of the nation’s finances. Thanks to his government’s Department for Work and Pensions, nobody is allowed to have mental illnesses anymore; after this speech, it seems likely we all have an idea about the reason for that.
A 50-minute speech is a lot of verbiage, and it is certain that worthier journalists across Britain – if not the world – have already analysed it to exhaustion. Allow me to let you into a secret:
They’re probably trying too hard.
Most of the speech was about putting Labour down. The Opposition has made all the headway over the past few weeks, and we all knew Osborne was under orders to change the mood music of the nation in time for Christmas.
Did he manage it? Not really. His speeches always come across as strained events, where he’s making an effort to be clever without ever achieving it. As a result, the message gets lost. We can therefore discount the Labour-bashing.
That leaves us with what he actually said. Even here, his meaning was at times opaque. What follows is an attempt to provide a handy guide to George-speak, for anyone unfortunate enough to have heard him yesterday.
Osborne: “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong.”/Meaning:“I am lying. Austerity failed miserably and the economy flatlined. A few months ago I realised that we would have nothing to show at election time so I turned the spending taps back on, with Help To Buy and Funding For Lending. I know that these are exactly the sort of Keynesian economic levers that I preached against for three years but I’m hoping that nobody noticed.”
The hard work of the British people is paying off, and we will not squander their efforts./Osborne appears to be celebrating his three years of stagnation. He inherited growth and decided to trash it. (MagsNews on Twitter)
There was no double-dip recession./“Phew! Lucky escape there!”
At the time of the Budget in March, the Office of Budget Responsibility forecast that growth this year would be 0.6 per cent. Today, it more than doubles that forecast and the estimate for growth will be 1.4 per cent./“Please God don’t let anybody remember that three years ago, the forecast for this year was 2.9 per cent.”
Today in Britain, employment is at an all-time high… We have the lowest proportion of workless households for 17 years./These jobs have increased the numbers of the working poor. Too few are full-time; too many are part-time, zero-hours or self-employed, serving up no National Insurance contributions from employers, no holiday or sick pay, or making contractors work long hours for less than the minimum wage.
The number of people claiming unemployment benefit has fallen by more than 200,000 in the past six months—the largest such fall for 16 years./“And we have imposed sanctions on more people on Jobseekers’ Allowance than ever before, in order to produce that figure.”
By 2018-19, on this measure, the OBR does not expect a deficit at all. Instead, it expects Britain to run a small surplus. These numbers mean that the Government will meet their fiscal mandate to bring the structural current budget into balance and meet it one year early./Although of course the books were initially supposed to be balanced by 2015. (Huffington Post live blog)
This year, we will borrow £111 billion, which is £9 billion less than was feared in March./…and £41 billion more than forecast in 2010.
We will cap overall welfare spending./But this will not include the state pension (half the social security budget) or the most cyclical jobseeker benefits./”A living wage would mean less dosh on in-work benefits; letting councils build would mean less subsidies for private landlords.” (Owen Jones on Twitter)
Pensioners will be more than £800 better off every year./But as usual he’s ignoring the VAT elephant in the room. (Mark Ferguson on Twitter)
We think that a fair principle is that, as now, people should expect to spend up to a third of their adult lives in retirement. Based on the latest life expectancy figures, applying that principle would mean an increase in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s./But life expectancy depends on where you live and how much money you have, meaning the poor continue to pay more towards the pensions of the rich./”Current pensioners better off – future pensioners paying for it. What was that about “making our kids pay for current spending” George?” (Mark Ferguson of LabourList on Twitter)
Most wealthy people pay their taxes and make a huge contribution to funding our public services; the latest figures show that 30 per cent of all income tax is paid by just one per cent of taxpayers./Estimates of the amount of tax that is not collected range between £25-£120 billion per year and it is not the poor who aren’t paying up.
This year the rich pay a greater share of the nation’s income taxes than was the case in any year under the last Labour Government./Because they now have more income. Simple really. (Tom Clark of The Guardian, on Twitter)
Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years./Including capital gains tax for foreign investors on sales of UK property, which has nothing to do with tax avoidance/evasion, fraud or error.
We must confront this simple truth: if we want more people to own a home, we have to build more homes… The latest survey data showed residential construction growing at its fastest rate for a decade./The rate of house building is at its lowest peacetime level since the 1920s
This autumn statement has found the financial resources to fund the expansion of free school meals to all school children in reception, year 1 and year 2, announced by the Deputy Prime Minister and supported by me./On Wednesday, the Lib Dems and Michael Gove’s education department argued over who had to pay for it.
Extra funding will be provided to science, technology, and engineering courses [in universities]. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential./And pushing thousands into the hands of debt collectors.
The best way to help business is by lowering the burden of tax. KPMG’s report last week confirmed for the second year running that Britain has the most competitive business tax system in the world./KPMG would know – it writes the tax system and also runs some of the larger tax avoidance schemes.
From April 2015 we will introduce a new transferable tax allowance for married couples… Four million families will benefit, many of them among the poorest working families in our country./Osborne says the Tories are backing British Families – but only ones who are married it seems. (Mark Ferguson on Twitter)/While the new tax arrangements bribe families to marry, the benefit cap will bribe big families to split up. (Tom Clark on Twitter)
We are all in this together./The biggest lie of this Parliament.
We are also helping families with their energy bills./Commence the cutting of the “green crap”. This from the “Greenest government ever”. (Mark Ferguson on Twitter)
Next year’s fuel duty rise will be cancelled./This is a cut in a tax that was never imposed in the first place.
We are going to abolish the jobs tax on young people under the age of 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people./Young people will therefore have less chance to get contribution-based benefit. National Insurance assures people their pension contributions – except when it isn’t paid. So they will have no contributions to show for any years they worked before 21 and will have to work until their late 60s.
The cost for a business of employing a young person on a salary of £12,000 will fall by over £500./This is a bonus for businesses, not employees.
“Jobs tax” – it’s ludicrous, isn’t it? National Insurance has been a respected part of British life for more than 100 years but Osborne, living as he does in a mythical Victorian-era golden age that never actually existed, thinks it is a “jobs tax”. Either that or he’s still bruised by the fact that Labour’s labelling of the under-occupation charge as a Bedroom Tax caught on with the public.
Shadow Chancellor Ed Balls got on his feet and immediately attacked Osborne’s “breathtaking complacency” for denying the drop in living standards faced by everyone in the country, with families already £1,600 per year worse off. Osborne laughed. He thought that was funny.
The Shadow Chancellor pointed out that we are enduring the slowest recovery in a century, and that average real wages will have dropped by 5.8 per cent by the end of the Parliament (except for fatcat business bosses).
He was having a hard time getting his points across, however, because Tory MPs were heckling him very loudly. Owen Jones tweeted, appositely, “Do the Tories think that a bunch of braying MPs dripping with privilege, while ordinary people’s living standards crash, is good TV?”
Maybe they did. Maybe they thought they had the public on their side.
Let’s have a look at a few comments from the public – courtesy of the Huffington Post:
“Planning to kill more people, George?” (Robin Stacey)
“Spend more you wet lipped monkey.” (Will Moriarty)
“No one has an ounce of faith in anything you say, you parasitic pool of curdled warthog’s puke.” (Anthony Nicholas)
And finally: “Hope you end the speech with your resignation x” (Joanne Wood – and yes, she did mean to end with a kiss).
What a shame Osborne did not follow her advice.
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