The ‘Money Saving Expert’, Martin Lewis, spoke up on ITV’s Good Morning Britain to urge the government to act on mortgage costs, saying a plan is needed before Christmas:
He highlighted three core issues: interest rates, the affordability test and correction in the house price market:
Mr Lewis also spoke about the government’s decision not to run an information campaign on how to save money on energy bills – and how it is lunacy to suggest such a campaign is too expensive when it could save millions from what the government is expecting to pay to energy firms when subsidising our bills:
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Martin Lewis: “It is a worsening of the situation – it is not the cause of the situation.”
The UK’s cost of living crisis started in the UK before the Russia-Ukraine war and should not be blamed on that conflict, ‘Money Saving Expert’ Martin Lewis has said.
And he said direct political action to ease the pressure is required – in Chancellor Rishi Sunak’s spring Budget on March 23 – because cutting household expenditure won’t be enough to save people from poverty.
He was speaking on BBC Radio 4’s Today programme on March 10:
“Kwasi Kwarteng has said that many people are willing to make sacrifices because of Ukraine. I think he’s probably right but I am slightly worried that we are seeing what may be potentially a deliberate narrative shift that effectively says the entire cost of living crisis is due to Ukraine, and therefore we all need to make sacrifices/
“That is not correct. What has happened in Ukraine has exacerbated the situation.
“But the rises in energy, heating oil, water, council tax, broadband and mobiles, food, National Insurance, were all in place before Ukraine.
“When we have a Budget – or a Spring Statement – coming in a couple of weeks, we need to be careful not to allow that narrative to happen and to be used as an excuse that we all need to make sacrifices because of Ukraine, and that’s why we have to suck in the cost of living crisis.
“That is not a correct analysis. It is a worsening of the situation – it is not the cause of the situation.”
Mr Lewis added: “We are going to see a real increase in genuine poverty in this country; millions of people being thrown into poverty.
“The only way we can stop that is not by being money saving and tightening our belts; it is by genuine political intervention.
“We have a Spring Statement coming and I would urge the Chancellor: let’s nip this in the bud. Let’s not have people starving or freezing.”
What if the Tories don’t nip it in the bud? What if they want to push this fake narrative? What if they’re trying to use it to avoid providing any meaningful help?
You see, the mass media tries to avoid suggesting it, but this is what we need to ask ourselves:
What if the Tories are actually steering most of us directly into poverty because that’s what they want for us? Are we really going to lie back and let it happen?
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Justin Tomlinson: There’s no reason to believe a word he says if the DWP can withdraw it and say something different once it is found to be embarrassing.
Why is the DWP trying to hide the figures on the cut it inflicted on Employment and Support Allowance claimants, years ago?
The government department has backtracked over an answer to a written Parliamentary question by the minister for disabled people, Justin Tomlinson.
SNP MP Marion Fallon asked: “What savings have accrued to the public purse under the £30 reduction for claimants of… [ESA WRAG] in each month since that reduction was implemented?”
She was referring to the highly-controversal cut, announced in 2015 and implemented from April 2017, that took £29.05 per week from ESA payments to people in the Work-Related Activity Group.
This aligned it with the amount paid to people on Jobseekers’ Allowance. The announced intention was to remove a financial incentive “that could otherwise discourage claimants from taking steps back to work”.
Apparently no account was taking of the physical (and mental) discouragements inherent in the long-term illnesses and conditions that cause people to claim a sickness benefit in the first place.
The stated intention was to save £640 million by 2020-21. But in 2015 it was also forecast that the cut would save £1.365 billionover four years. The cut was predicted to affect half a million people once it was rolled out fully.
But in his – initial – response, Mr Tomlinson said: “There are no savings from the removal of the… [WRAG rate] for new claims from April 2017.
“This change enabled the Department to recycle money into providing practical support… We have invested £330m over four years with £100m available in 2020/21 and will support those with limited capability for work to move towards and into suitable employment.”
The DWP has now amended Mr Tomlinson’s response – apparently due to embarrassment after his figures were questioned.
The official response now states:
“The information requested on the savings accrued from the removal of the Work Related Activity Component (WRAC) is not available. It would incur disproportionate cost to calculate any actual net savings from the removal of the WRAC.
“When the WRAC was removed we made a clear commitment to instead provide practical support that will make a significant difference to the life chances of those in the Work-Related Activity Group. We have been investing an additional £330m over four years to support those with limited capability for work to move towards and into suitable employment.”
It seems to This Writer that, if the latest statement is accurate, then the £330 million investment need not be subtracted from any savings that were predicted back in 2015; it was part of the calculation.
So we are left with the question of the savings. Why was it entirely possible for the Tories to make grand predictions about the amount of money they would stop paying to sick people back in 2015, and why is it now impossible for them to tell us how much they actually didn’t pay?
And in the meantime, the proportion of people who have died while claiming ESA in the Work-Related Activity Group has been rising steadily.
How many of those are due to Tory cuts making it impossible for them to make ends meet?
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Source: OBR, Economic and Fiscal Outlook, December 2014 * Incapacity Benefit includes Employment and Support Allowance, severe disablement allowance, income support and incapacity benefit.
The benefit cap has so far saved around £100m a year, according to the Institute for Fiscal Studies – just 0.1 per cent of the total £215 billion benefits bill if we don’t count the budget for pensioners, the Daily Mirror tells us.
Those who have been hit have lost at least £46 per week, but only half the total lost that minimum amount; the rest lost much more than this. Overall the mean loss was £70 per week or £3,640 per year – around one-eighth of their total income prior to the cap. That means the DWP has bitten a huge chunk out of many household incomes.
However, this claimed saving does not take into account the many costs that could be associated with the cap. Vox Political stated last year that the cap was expected to save just £110m a year, meaning that it has not saved as much as the government hoped, “barely a rounding error in the £201bn benefits bill” – and you’ll notice that the bill has increased by £14 billion in the meantime.
VP continued: “But even these savings could be wiped out due to the cost to local authorities of homelessness and housing families in temporary accommodation. As a leaked letter from Eric Pickles’s office to David Cameron stated, the measure “does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally”.
So, taking these other costs into account, how much has the benefit cap saved now?
The Mirror article then gets into a more difficult area: The number of people who have moved into work as a result of the cap.
“This can be accounted for by improvements in the labour market, as the FT also notes, but statisticians at the Department for Work and Pensions also found evidence that the cap itself had an impact.
“In particular, 20 per cent of families whose benefits were capped in May 2013 found work within a year.”
But 20 per cent of 27,000 is 5,400 – not 2,000. The IFS figure suggests 7.4 per cent.
What about the bold claims made by the DWP in July last year, that at first 8,000 and then 12,000 people had moved into work after being warned about the cap? As those figures clearly conflict with the new data, are we now to conclude that they were a blatant lie? If so, who committed it – civil servants or Iain Duncan Smith, the secretary of state?
Either way, the Mirror‘s verdict – that “there have been very limited fiscal benefits” – can only be taken as an extremely mild response to the figures.
If the Tories win the General Election next May, they have promised to cap benefits still further – from the current £26,000-per-year-per-family to £23,000.
Perhaps their slogan should be: “More austerity – less prosperity”.
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Of course, he didn’t say so in quite as many words, but that’s what he meant.
Perhaps you need to be convinced?
Okay. According to the BBC, he said in his conference speech today (Monday) that a future Conservative government would freeze benefits paid to people of working age for two years, in order to “save” £3 billion.
This is important because he reckons “an extra £25bn of permanent savings would be needed to eliminate the UK’s deficit”.
“The £3 billion saving is part of £12 billion in welfare reductions previously floated by the chancellor. He also said there would be £13 billion of Whitehall savings, which will include public sector pay restraint.”
How wrong-in-the-head can one man be?
In the same speech as he announced a huge pensions payout to 320,000 people lucky enough to have a relative rich enough to create a large pension pot and unfortunate enough to have died before spending it all, he said he would be continuing to victimise no less than 10 million households, more than half of which are working (the report said half the households affected by the benefit freeze are working, and those affected by public sector pay restraint are, by definition, working).
These are the people who should be building up the economy, and instead, this monumental ignoramus is crushing them down.
The giveaway is the language being used: Osborne reckons the Treasury has to make “savings”.
What he really means is that he thinks the Treasury needs an extra £25 billion per year in order to clear the deficit. Let’s not debate whether his calculations are wrong. They probably are – after all, he has been wrong every year since he took over as Chancellor, why should things be any different now?
Even if he is right about the sum of money involved, he’s looking at the situation the wrong way. If the Treasury needs an extra £25 billion, then why not build up the economy to provide that money?
This would mean telling businesses that working people should be paid a Living – instead of starvation – Wage, providing them with enough money to buy the things they need, rather than depending on benefits. This money would build up the businesses it is paid into, meaning they would require more employees, boosting the taxpaying workforce and the tax take.
We know that the money is available to do this because our business leaders are banking an estimated £120 billion offshore every year, so arguments that they can’t make ends meet just won’t work.
Alas, it seems this plan is nothing but a forlorn hope. Osborne won’t try to build the economy. He’s been too busy shrinking it over the last four and a half long years.
And he’ll never clamp down on tax avoidance schemes for the very rich.
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Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him – but it’s the closest image I could find at short notice. [Image as credited]
If a Conservative government is returned to office after the 2015 election, there will be yet more spending cuts and service cuts afflicting hard-working, low-paid families.
That was the message for most people in George Osborne’s latest attempt at a Budget speech today.
There were plenty of groan-worthy moments as the part-time chancellor trotted out the Coalition’s catchphrases: “We will fix the roof while the sun is shining” (groan. The job is taking so long, one has to question whether the contractor is Con-ning the client). “We are all in this together” (groan). Oh really?
Benefit spending is to be capped at £119 billion per year, albeit rising with inflation; public sector pay “restraint” will continue for the foreseeable future. This is from the government whose Prime Minister was confirmed, only minutes previously, as having approved 40 per cent pay rises for his special advisors!
Most significant is the fact that Osborne avoided mentioning ordinary working people for most of his speech; this was a budget for businesses, with the benefits reserved for fatcat bosses.
No major advanced economy in the World is growing faster than the UK, said Mr Osborne; more people are in work. This appears to be borne out by current employment figures (although it should be noted that this is due to a vast and questionable boom in self-employment – the number of employees has dropped by 60,000).
Where is the benefit to the British economy? Why has the deficit not been eliminated? Osborne said it stood at £157 billion in the year he came to office, and would be £108 billion this year, but in fact £39 billion was removed due to measures brought in by the previous Labour chancellor, Alistair Darling. He has cut government spending by something like £80 billion so far, but the deficit has dropped by – possibly – £10 billion. Not a good start to his speech.
There will be further investment in high-speed rail, even though there is no way of predicting whether this hugely costly investment in making train journeys 20 minutes faster will create any economic improvement.
There will be money to fund new centres for medical research – but will these be absorbed by private health firms after the public purse has paid for them?
There will be investment in faster extraction of oil from the North Sea – aiming to get as much as possible out before the Scottish referendum, in order to impoverish the Scots if they decide to go for independence?
And there will be investment in low-cost energy (finally killing the highly questionable green agenda) – meaning money for shale gas companies, and to hell with the environmental cost.
All this investment will go into businesses whose main contribution to the Treasury – Corporation Tax – has already dropped by a quarter (from 28 per cent to 21 per cent) and will go down to 20 per cent this year. This is less than the lowest level of Income Tax.
Up go the profits – down go the tax payments. Who benefits?
Council tax in England remains frozen, meaning fewer public services.
The personal tax allowance is to rise, so people may earn £10,500 before paying tax. This is nowhere near enough to offset the massive drop in living standards that has been caused by the Tory-led Coalition. The cost of living has risen for 44 out of the 45 months of this Parliament – for the whole period, if the earnings of high-paid bankers are removed from the calculation.
The threshold for payment of the 40p tax rate is to rise, so fewer people will pay the higher rate.
Savers are to be helped but – again – this is not a boost for the poor. Most working and unemployed families don’t have any spare money to put into the banks. How does it help them to know they would not pay any tax on savings up to £15,000 in an ISA, when they cannot afford to open one?
And there is a new Pensioner Bond for rich senior citizens (poorer pensioners don’t live long enough to benefit).
As Ed Miliband said in his scathing response, the Coalition can afford to give a tax cut of £200,000 per year to bankers who earn £5 million – but can’t afford £250 per year extra for nurses.
Mr Miliband said the Budget speech was more significant in what it hid than in what it actually said.
Working people are suffering under the Bedroom Tax, under cuts to their tax credits, and they are having to visit food banks if they want to eat.
This is a government that gives with one hand, but takes back much more with the other.
And the Conservatives have the bare-faced cheek to call themselves “The Workers’ Party”.
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The DWP could be about to privatise delivery of the state pension, according to a leaked report. Many may have missed this revelation because of today’s other, more high-profile events.
According to The Guardian, the Department for Work and Pensions is struggling to meet the demand for savings being placed on it by the government; the plan is to slash its operational spending from £9 billion per year in 2009 to £6.3 billion by 2016. This means a £1 billion cut in the 2014-15 financial year.
A leaked report entitled DWP Efficiency Review claims one way of doing this would involve “a review of the pension service’s current delivery model and alternative delivery models” – in other words, privatisation.
The money would still come from the taxpayer but a private company would deliver it to pensioners.
What could possibly go wrong with that idea? After all, involving private companies in public services has worked so well in the past, hasn’t it? Look at G4S with the Olympics, Atos with sickness and disability benefits, any of the many companies involved with the useless Work Programme, or indeed any of the companies currently raiding the English NHS for profit.
(Please be aware that the immediately preceding paragraph was loaded with so much sarcasm, it may now be dripping from your screen. Apologies if this is the case but Vox Political will not be held responsible for the damage. Contact Parliament’s IT service – which happens to be another example of what happens when you get private companies involved in taxpayer-funded services.)
The review will question whether the recently-launched ‘Tell Us Once’ bereavement service, that helps people report deaths in a way that ensures all necessary government departments are made aware, could be more efficient if outsourced. This will be a waste of time as the answer is, quite clearly, no.
Pensions expert Ros Altmann was quoted as saying she was concerned by the idea that firms like Capita, Serco or G4S could be brought in to administer £100bn in public money to millions of pensioners: “We’re dealing with a vulnerable group and a massive number of people, so I would be seriously concerned about outsourcing a service like this, which is working well, with a view that it might make some short-term savings.”
The trouble is, the DWP has to make a saving somewhere, and all the easy efficiencies have already been made, according to the leaked report.
Too crude an approach to future cuts could jeopardise the department’s capacity to roll out changes to pensions, child maintenance and disability benefits.
It is significant that Iain Duncan Smith’s flagship Universal Credit, which is dogged by delays and IT problems, is not part of the review.
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Demonstrating for justice: Campaigners against the Bedroom Tax gathered outside Parliament while MPs debated it inside.
“I’m amazed Labour have chosen to spend their allotted day in Parliament arguing for more unfunded spending on housing benefit.” That’s what Matt Hancock, Conservative MP for West Sussex, had to say about the Opposition Day debate on the Bedroom Tax in the House of Commons on November 12.
Hancock is, it seems, author of a book entitled Masters of Nothing, which sums up his understanding of the situation rather well. He clearly has not mastered the fact that the State Under-Occupation Charge will not save money. He has not mastered the fact that emptying dwellings of their current owners will not make them available to new familes as these people are afraid they will themselves be tipped onto the street when their circumstances change – instead the premises will be left empty, at huge cost to social landlords; and he has not mastered the fact that anyone evicted because of the tax will become a burden on local authorities, who have a duty to rehouse them in bed and breakfast accommodation, even though the money provided to them for this purpose by the government is ludicrously inadequate to the task.
Hancock is not alone in having misconceptions about the Bedroom Tax. Most, if not all, of the Conservatives who spoke during the debate uttered howlers – and the purpose of this article is to name them and explain why they should be ashamed of their words.
Please take the opportunity, Dear Reader, to look for your own MP in the catalogue of calamity that follows, then use it to attack them in their own consituency. Let’s make them realise that actions have consequences.
If you don’t have a Tory MP, feel free to use what follows in order to make sure you never have to put up with one.
We begin with Tobias Ellwood (Bournemouth East) who asked of Rachel Reeves: “What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost one million spare bedrooms in Britain?”
The Shadow Work and Pensions Secretary responded without hesitation: “I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.”
The Minister of State, Steve Webb, came back to this point later, saying: “Who was doing the house building for 13 years?” Well, we all know who hasn’t been doing it for the last three.
Mr Ellwood said the Tax was brought in because the cost of housing benefit was rising alarmingly: “After 13 years of Labour the cost of housing benefit doubled to £21 billion. That is unacceptable. The cost to taxpayers was £900 per household. The system was getting out of control.” His failure is that he refused to accept the explanation offered by Labour’s Katy Clark – that this was due to the rising cost of rent in the private sector (private rents have indeed been rising massively and the government refuses to take action because this would interfere with the market. Bizarrely, the Conservative-led Coalition seems to believe it is acceptable to pay huge gobs of housing benefit to private landlords – who make unreasonable demands – and then blame social renting tenants for it). He also, by inference, rejected the evidence that the Bedroom Tax will not save any money.
Mr Ellwood also referred to the deficit run by the Labour government of 1997-2010. He said: “Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates.”
This is disingenuous. As he must know, not only did Labour run a lower deficit than the Conservative governments of both Thatcher and Major (average 41 per cent of gross domestic product) from 1997 to 2007, it also made a surplus in the 2000-2001 financial year – something that the previous Conservative governments never did. This means Labour actually paid off some of the debts that had been accumulating. With that pedigree, even the 43 per cent deficit of 2008 looks respectable. The higher deficits of 2009 and 2010 were entirely caused by the bankster-instigated financial crisis, when the actions taken by Labour were entirely supported by the Conservative Party.
He went on to condemn Labour for voting against £83 billion of welfare savings; if the reasoning for them was as shaky as that for the Bedroom Tax (and it was; see previous VP articles) then Labour was quite right to do so!
It should be noted that the Secretary of State for Work and Pensions, Iain Duncan Smith, was not present at the debate. RTU (as we like to call him) was woofing it up in Paris, rather than accounting for his misbehaviour to the taxpayer.
Mrs Anne Main (St Albans) echoed a comment by Mr Webb, but did it in such an inept way that we’ll look at her words rather than his. Following Labour’s Stephen Twigg, she referred to the too-low allocation of Discretionary Housing Payment to families having to cope with the Bedroom Tax: “Perhaps he would like to speak to his Labour-run Liverpool council and ask why, when it received £892,000 in discretionary housing payments last year, it actually sent back £337,000.”
Mr Twigg put her straight: “Does she accept that the figures that she has given are from before the bedroom tax was introduced? This year, Liverpool city council will certainly spend the entire discretionary housing pot.”
His words echoed fellow Labour MP Lucy Powell, who had previously berated Mr Webb: “The Minister incorrectly gave figures for last year—the bedroom tax was introduced only in April. I was talking about money that will come back this year. I can guarantee that the Minister will not be getting any money back from Manchester this year — the year of the bedroom tax.”
Referring to the 400,000 disabled people affected by the Bedroom Tax, Mrs Reeves said 100,000 disabled people live in properties specially adapted for their disability, but the average grant issued by local authorities for adaptations to homes [when they are forced to move out by the Bedroom Tax] stands at £6,000. The total cost of doing the adaptations all over again could run into tens of millions of pounds.
At this moment, Heather Wheeler (South Derbyshire), said while seated: “They’re exempt.”
The response: “The hon. Lady said from a sedentary position that disabled people are exempt, but she would not say it when she was on her feet because she knows it is not true.” In Vox Political‘s home constituency, at least one disabled person has already been evicted because of the Bedroom Tax.
Philip Davies (also known as ‘Stupid of Shipley’) weighed in with a shocking error, in an attempt to attack his local housing association and its director, a Labour MP: “Does the Minister agree that the spare room subsidy is one reason why we do not have the right mix of housing? Social housing providers could build houses as big as they wanted, knowing that the Government would cover the full bill irrespectively. In that respect, does he deplore the social housing provider in my area, of which a Labour MP is a director? It complains on the one hand that it has too many three-bedroom houses—”
That’s as far as he got, and just as well. Let’s go through this one more time: The ‘spare room subsidy’ is a fiction. It never existed and therefore could never have been abolished by the Conservative-led Coalition government. Being entirely make-believe, it could never have affected the decisions of social housing providers. This is just one of the many reasons why Mr Davies is rightly considered to be one of the biggest twits in the Tory Party (among hefty competition). Another might be his claim that disabled people should work for less than the minimum wage.
David TC Davies (Monmouth) complained: “Opposition Members… do not want to talk about the fact that they introduced a measure like this for the private sector.”
He was among many Tories who complained about this apparent double-standard. Labour members reminded them that the Bedroom Tax is retrospective (affecting people currently in social housing) while the private-sector measure was for new tenants only. One may also ask why, if these Conservatives were so disturbed by the apparent discrepancy, they were not calling for this earlier measure to be scrapped as well.
George Hollingbery (Meon Valley) said: “We need to pose ourselves a question: what is dealing with the spare room subsidy about? Is it about reducing the housing benefit bill? Yes, of course it is. The Government propose a £500 million saving, which is important.”
It is important, because Conservatives seemed confused throughout the debate about whether they were trying to sort out overcrowding by putting people into appropriate accommodation, or trying to save money. The two are mutually exclusive. The only way to make money on the policy is for people to remain locked in housing that, thanks to the Bedroom Tax, is now too expensive for them – but this cannot last because they will soon be evicted for non-payment of rent. Moving people around, so that nobody is under-occupying, will result in a higher housing benefit bill because more people will be claiming – the original tenants in their new properties (which, if they are run by private landlords, will be more expensive) and the new tenants who will be occupying to the limit of a property’s capability and therefore may claim the full amount of housing benefit. Either way, Mr Hollingberry’s claim of a £500 million saving is pie-in-the-sky.
Margot James (Stourbridge) made a proper fool of herself. She said: “The Opposition… want to position the end of the subsidy and the creation of a level playing field between all recipients of social housing support as a modern day poll tax.” This is the least of her mistakes as some Labour members may have suggested such a thing; in fact it is Eric Pickles’ Council Tax Reduction Scheme that is the modern-day Poll Tax, because every household must now towards it.
Margot James went on to deny that the Bedroom Tax is a tax, saying: “A tax is a government levy on somebody’s income, whereas we are clearly talking about reducing a subsidy.” This is wrong on two counts. Firstly, there has been no subsidy to reduce – unless she was referring to housing benefit in its entirety. The spare room subsidy is, as already mentioned, as mythical as the “unicorns and fairies” to which Anne Main referred when she tried to dismiss the existence of the under-occupation charge as a tax on bedrooms. Both ladies are wrong, because a tax may also be defined as a government levy on property owned or used by a citizen (such as, say, a bedroom). So – not quite as mythical as unicorns and fairies. One has to wonder why Mrs Main mentioned these, as she has clearly been away with the fairies herself.
Kwasi Kwarteng (Spelthorne) breezed in from another committee to provide the benefit of his own ignorance. He asked: “Is it fair that someone on a low income who is in privately rented accommodation should pay taxes in order to subsidise someone else’s spare room? Is it fair to raise taxation from low-paid workers to subsidise other people’s accommodation?”
The answer, of course, is yes. It is fair. In fact, it is a principle of our system of taxation. Everybody pays into the national treasury, in order to allow the state to provide services – such as housing – for those in need. This may be a detail that current Tories have missed, considering the government’s vigorous attempts to write the highest earners out of taxation altogether. If he wanted to help low-waged people in private rented housing, the answer to that is also simple: cap their rents.
And doesn’t he know that the very low-paid have been lifted out of taxation by his own government, as the Coalition has been raising the threshold for payment of income tax every year, aiming to reach a target of £10,000 income per annum by 2015.
At the end of the day, the motion to scrap the Bedroom Tax was lost by 26 votes. Some have already said that Labour could have won it if all members had been present, but that was never really on the cards; the government has the numbers, even if some Liberal Democrats (like VP‘s own MP, Roger Williams) abstained.
So what are we to make of it all? Simply this: The Conservatives do not have a credible narrative to describe what the Bedroom Tax is about. It doesn’t save money; it won’t put people into appropriate accommodation; and it certainly won’t cut homelessness!
Work out what it’s really about, and you will understand why they are so desperate to keep it.
This is a piece I wrote for the local credit union in my part of Powys, following on from the Archbishop of Canterbury’s vow that the Church of England would fight payday lenders. Quite right – usury is an evil that religious organisations traditionally oppose. I’m publishing it here because the main information is relevant nationwide (and also because today appears to be quite slow for political news).
Credit unions must rise to the challenge created by the Archbishop of Canterbury’s stand against payday lenders, according to a leading figure in a Mid Wales organisation.
Richard Bramhall of Red Kite Credit Union said the main issue facing credit unions was how to bring affordable credit to “people on the edge”.
Last month, the Most Reverend Justin Welby announced that he planned to help community-based credit unions by allowing them to use Church of England premises as bases, to put firms like Wonga.com, which charge huge amounts of interest for their loans, out of business.
“His idea is very constructive,” said Mr Bramhall.
“Instant credit is a difficult sector to service because of high rates of defaulting. Payday lenders, door-step lenders and loan sharks – and to a lesser extent banks and credit card companies – answer the threat of bad debt by charging monstrous interest rates.
The Credit Union approach is responsible lending, careful interviews, getting guarantors where possible and working with the member to develop financial competence.
“The ethos always was to save; build a relationship with the credit union through saving – becoming a shareholder – and borrowing using the shareholding as security. They pay low interest and benefit by keeping and growing their shares.
“We do not want to lend at high rates,” he said. “Our standard rate is 12.68 per cent, or one per cent per month. If you borrowed £100 over a year and paid it back without interruptions, it would cost you £6.60 in interest, with no extra charges and no penalty for early repayment.”
But he warned: “The population density here is so low and the conceivable number of members so small that, even if everyone joined, our income from loan interest would not be enough to pay for bank-type premises or employees.”
The Credit Union’s solution is what Mr Bramhall calls ‘barefoot banking’. He said “The Herb Garden Café, in Llandrindod Wells, is an example. You can access credit union services six days a week, 12 hours a day – not just when we’re open but any time we’re in the building. People can pick up leaflets, ask about the credit union, leave messages, make payments and collect cheques. It costs the café nothing.
“If people want to help, they could develop the sort of access point we have here. Our greatest need is for self-motivating volunteers and casual drop-in service points in shops, churches, cafes and even private homes all over Radnorshire and north Brecknock.”
He added that credit unions also needed to establish themselves in schools, teaching responsible money management to youngsters.
Get your coat, Gideon! If only this photo was showing Mr Osborne departing from politics forever. If he did that, not only do I think the credit ratings agencies would drop any plans to slash the UK’s triple-A rating, we might see an immediate economic upturn as confidence starts to return to British industry!
Just when you think you’ve heard it all, you can always count on Tories to come up with an idea so hare-brained it makes you wonder whether they belong to the same species as the rest of us, or to some bizarre, inbred offshoot of humanity where evolution gave up on them after realising their logic runs backwards in comparison to everybody else.
If you’re wondering what has provoked this rare torrent of invective from my normally mild-mannered keyboard, I’ll tell you:
I was wandering through internet news coverage of yesterday’s events, partly in search of something to write about, partly out of interest in what other commentators had to say about the latest economic downturn (the latest? Have we become so casual about it, so quickly?), but mostly out of a desperate need to find an observation about the situation that hadn’t already been thrashed out in front of Joe and Jane Public a thousand times already.
It was disappointing work and I was starting to give up hope. Mostly I was reading that Gideon was “under pressure” to change his cuts agenda (heard it before!); that he told everyone to get stuffed (again!); that he wants further spending cuts to come into play during 2015-16 (boring! But also psychotic!); that Nick (We’re Sorry) Clegg has admitted cuts in capital spending early in this Parliament were a mistake – but he isn’t going to do anything about it (windbag!); that Boris (Zipwire) Johnson (windbag! Oh– sorry, I got carried away there; forgot I hadn’t actually mentioned what he’d done) has tried to show what a man of the people he is by saying there’s huge potential in the UK, if people are given a feeling of confidence – and then blew it all by talking about a “hair-shirt, Stafford Cripps agenda”. Cripps was a Labour chancellor under Clement Attlee, who tried to use taxes and rationing to control economic growth. I’m a Labour Party member and I didn’t know that, so what chance anybody else has, I don’t know. I do know that, by using that reference, Boris stuck his foot right in his mouth (windbag! No – wind-zeppelin!); and that David (Flashman) Cameron wants to be the Prime Minister who secured Britain’s place in a newly-democratic European Union, or some such nonsense, showing yet again that he is completely divorced from the reality faced by you and me every day.
Then I read this, in a Guardian article:
“Osborne is also under pressure from rightwing thinktanks which want him to offer tax cuts to boost consumer spending, with money taken from departmental efficiency savings and deeper welfare cuts.”
Interesting!
– but only because it’s so whacko-Jacko that it could only come from a right-wing think-tank.
Tax cuts to boost consumer spending? Firstly, if you’re thinking that means a cut to the base rate of income tax, please get a grip. They mean more tax cuts for the richest in society – the people who actually have all the money.
(There’s loads of it around, by the way. Oodles and boodles of the stuff. It’s sitting in banks, in tax havens all around the world and also in the Channel Islands. It has to go somewhere, and it’s been going to the rich. That’s what Conservative policy does, whether the Liberal Democrats are hanging on the coat-tails or not.)
The most obvious problem with that is, the richest in society don’t actually need tax cuts to put more money into society. They can pay their way perfectly well as matters stand. Consumer spending won’t budge if they get another fat rebate (remember, the top rate of Income Tax is already dropping by a fat five per cent, and Corporation Tax has plummeted by a quarter since the Tory rabble got into the Treasury).
Behind that is a worse problem – that it implies less money will go into the Treasury, to be spent on public services. As a result, those services will suffer. Starve something and it will wither and die. You can check the truth of that by depriving a plant of water. Before you know it, you’ll have a dried-up stem where your beloved dahlia used to be, and nobody to blame but yourself.
If idiots like George 0sborne do that to public spending, we’ll only have ourselves to blame, because we’re the ones who gave the Tories enough of the vote to allow them to Con their way back into power (collectively, I mean. I didn’t vote for them and I don’t think I know anybody who’ll admit that they did). What will we end up with? A withered economy; shrivelled-up and useless.
But no! They say the tax cuts should be funded with money taken from departmental efficiency savings and deeper welfare (I prefer “social security”) cuts.
Clearly it has skipped their notice that 0sborne has been having a hard time finding efficiency savings within government departments – they were, in fact, pretty much down to the bone when he turned up at Number 11 (if we’re to believe certain commentators, anyway) – so the bulk of the bill will end up being paid from the social security budget.
In other words, it’s yet another attack on the poor.
They clearly haven’t realised – even yet! – that it’s the poor who have been paying for their good times, ever since the Coalition got into power back in 2010. They’ve been propping up their useless economic model with money taken from the most vulnerable of us – in fact, particularly targeting the most vulnerable, presumably in the hope that they will die off before anyone important wakes up enough to realise what’s going on and stand up for them. Sadly, it’s a policy that has worked, so far, thanks to copious support from the right-wing media, who’ve managed to persuade many of the poorer sectors of society that turkeys should, in fact, vote to support Christmas.
It’s mad.
Almost as mad as having a slap-up meal in a swish place like Davos, the day before figures are published showing that the economy you’ve designed has tanked. Again.
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![Mr Os-bean: As Ed Miliband gave his response to the Budget, George Osborne had a gormless smile on his face that made him look like Mr Bean. This is not him - but it's the closest image I could find at short notice. [Image as credited]](https://i0.wp.com/voxpoliticalonline.com/wp-content/uploads/2014/03/140319budget2.jpg)
