Tory backbenchers cheered, but plenty of people will be hit. As experts look for the devil in the detail, here are five changes already causing alarm.
1. Grants abolished for nurses
Student nurses are to have their grants cut and will instead have to take out loans to pay for their tuition fees. A saving of up to £800m a year for the Government, some would-be nurses have already been put off. Katie, who planned to enrol on a postgraduate diploma in adult nursing next year, told HuffPost UK: “The NHS are crying out for nurses, more so those who have a bit of life experience behind them. But these cuts look to have more than out priced many of us.”
2. Tax credits protected – for now
The reversal of cuts to tax credits will avoid almost all the immediate losses next April, on average a £1,300 hit per family on the top-up benefit for workers. But as the Chancellor said: “Tax credits are being phased out anyway as we introduce Universal Credit.” So the Universal Credit – all welfare payments rolled into one – is likely to contain the cut when implemented in 2020. The Resolution Foundation says that by 2020 more than 3 million households are still set to lose an average of £1,000 from the £3.5bn cut. “Pain tomorrow is better than pain today – but it is still pain,” said Torsten Bell, director of the Resolution Foundation.
3. Free childcare limited
A flagship pledge of 30 hours of free childcare for three and four year olds has been scaled-back, meaning it will only available to parents working more than 16 hours a week when it launches in 2017. It will also no longer apply to families with incomes of more than £100,000. The biggest victims? Single parents working part-time. The Family and Childcare Trust warned of a “new barrier to work for those parents”. “We urge the Government to re-examine these criteria so that all working families can benefit from this generous offer,” said chief executive Julia Margo.
4. Housing benefit crackdown
A cap on housing benefit for new tenants in the social rented sector was announced. The reform will mean that housing benefit will “no longer fully subsidise families to live in social houses that many working families cannot afford”, official documents said as it bring rules in line with the private sector. The disability charity Mencap warned: “This could seriously impact on people with a learning disability living in social housing and specialist supported housing, jeopardising their ability to live independently in their communities.”
5. “£56 added to the tank”
Tucked away in the Autumn Statement “scorecard” is a saving of around a quarter of a billion pounds every year by retaining the diesel supplement in the company car tax until 2021, when new cars will have to be cleaner. This will cost the average BMW 3 Series driver in a company car £182 if they are the basic rate taxpayer, and £365 for higher rate taxpayers. Treasury sources said that £126 would be deducted by employers via National Insurance – but that is still a fuel tax hike of £56. Not a great message to send “hard-working families”.
Has anybody noticed that the big giveaways in George Osborne’s spending review and Autumn Statement are based on an imagined increase in funds of £27 billion according to claims by the Office for Budget Responsibility?
This is the organisation that has been wrong in just about every prediction it has made.
Look at its predictions for the deficit:
And these were made as long ago as 2012!
Osborne’s plan is also based on a claim that the government will be more efficient at collecting taxes – after announcing that plans to combat tax avoidance have been shelved due to “complexity“. Much of this is due to ‘modeling’ changes – alterations in the way the organisation calculates the amount likely to be collected – rather than any surprise increase.
The OBR (again) reckons that tax income will increase by £15 billion, by the end of the current Parliament.
So he has no solid evidence that borrowing will come down as expected, and has put in place no measures to ensure he’ll collect the extra taxes he needs.
On second thoughts, he’s not on shifting sands – he has put us all in quicksand.
ADDITIONAL: Apparently the OBR reckons the measures Osborne has announced today (November 25) will increase the tax take by £28.5 billion by 2020-21. This consists of the new apprenticeship levy (£11.6 billion), higher council tax (£6.2 billion), and the introduction of higher rates of stamp duty land tax for second homes and buy-to-let purchases (£3.8 billion). It’s a major hit for businesses. Are we sure they’ll put up with it?
Swallow your pride, George: Osborne has nowhere to go on benefit cuts.
Whitehall is making plans for a Commons vote on George Osborne’s welfare cap within a month, Sky News understands, in the clearest sign that the Chancellor has missed his self-imposed welfare cap.
The Treasury has struggled to alleviate the immediate £4.4bn cuts to tax credits this April, to provide a better transition to the Government’s aim of a “low welfare, low tax, high wage economy”.
Any slowing down of this year’s planned cut would have to be made up for by welfare cuts in other areas such as child benefit or housing benefit.
Sky News understands the additional cuts to housing benefit tomorrow are relatively modest in scope, in the hundreds of millions per year and nowhere near sufficient to mitigate a multibillion gap.
The problem arises because Mr Osborne, in addition to making sharp welfare cuts, chose to push down the welfare cap to the levels of welfare spending forecast in July by the Office of Budget Responsibility – £115bn in the 2016/17 financial year.
He has tried raiding tax credits and Universal Credit; he has considered cutting Housing Benefit. Now it seems George Osborne is planning to take money from charities to pay for his spending cuts.
It seems he wants to cut government funding for the arts (again!) and top it up with cash taken from the National Lottery.
The Lottery money is earmarked for charities, so they will lose out.
Isn’t it interesting that, back in 2010, David Cameron was looking to charities for help in providing services that spending cuts meant the Coalition Government would not be able to provide, as part of his white elephant ‘Big Society’ project?
Now it seems he’ll be rubber-stamping Osborne’s plan to wreck any such substitute provision.
Oh, and if the Big Lottery Fund takes a massive hit, guess what will be among the biggest losers?
Whitehall leaks show the Chancellor wants to nick £320million from the Big Lottery fund in Wednesday’s spending review, the Sunday People reports.
The money is earmarked for good causes, but Mr Osborne could get his hands on it by slashing Government arts spending.
Lottery money would then be diverted to compensate the Arts Council and other bodies for losing taxpayer cash.
Sir Stuart Etherington of the National Council for Voluntary Organisations said: “It would be hugely damaging to the lottery if players saw it as financing a government slush fund to compensate for spending cuts.”
The NHS and the Treasury appear to be in deadlock over the amount of necessary money the health service won’t be allowed to have. Remember, it needs £22 billion but will only get a maximum of £8 billion by 2020.
It is important to remember that grants to the devolved governments of Scotland, Wales and Northern Ireland are dependent on the amounts being allowed for English services. Not only does that mean Conservative MPs should not criticise spending choices made by those governments, which are dictated by the amounts they receive from Westminster, but there are also implications relating to English Votes for English Laws.
The rest is self-explanatory.
The core of next week’s Spending Review is now becoming clear. If the Treasury delivers the pre-announced scale of cuts we will see five ‘big losers’ in Whitehall including, surprisingly for some, Education.
On the protected departments, the key is that the share of total spend that is protected is significantly greater than in the Chancellor’s previous Spending Review… both because more departments have been protected (the Defence budget will rise not fall this time) and because five years of cuts to unprotected departments have already made them a smaller part of the overall pie.
The impact of this protection is to triple the scale of the cuts facing unprotected areas, compared to a world in which the cuts are spread across all departments.
The key unknown within the protected budgets is the exact settlement for health spending: not how much (given that the government has committed to £8 billion extra by 2020-21) but when. With many trusts facing big deficits this year it will be a test of Simon Stevens’ negotiating skills to see how much of that spend will be front-loaded into the next few years.
The grants to Scotland, Wales and Northern Ireland also represent a very large chunk of spending that can’t be directly cut. Instead those budgets will be a function of other (mainly English) spending. Because that includes the English NHS boost, the average cut to these devolved budgets is relatively small. But we will be looking for any changes to how the Barnett formula will operate, given additional fiscal devolution and the introduction of a new ‘funding floor’ for Wales.
On the unprotected side, seven mid-size departments have already settled their resource budgets (plus some smaller bodies and the tiny Scotland/Wales/NI Offices), with an average cut of 24 per cent.
HMRC and DWP, the two settled departments with budgets over £3 billion, are part of an average cut of just 21 per cent. For them, the real unknown for Wednesday is now whether there will be fudge or a welcome reversal on tax credits, and what other welfare and tax changes might be planned.
If the overall savings target remains unchanged and is to be met, the below-average cuts agreed by these seven departments have obvious repercussions for those yet to settle… The cash value of the cuts announced so far (in the region of £4-5 billion) does not even cover the boost to NHS England (an estimated £6.4 billion by 2019-20). That is to say they are about changing the shape of the state (more health, less everything else) rather than shrinking it.
All of which means the remaining departments left to settle must deliver in the region of £18 billion of savings. In practice, just five can make a meaningful contribution to that total.
These ‘big losers’ are Business, the Home Office, Justice, local government and non-schools education… [They] could face average cuts of 30 per cent, if the scale of spending cuts outlined by the Treasury is to be delivered.
Education… makes it on [this list] because its protection only applies to the 5-16 schools spending, leaving sixth forms, the care system, teacher training, under 5s and even some elements of 5-16 schooling like the Pupil Premium and Free School Meals.
The scenario we set out is based on the Treasury sticking exactly to the spending totals from the Summer Budget – an outcome which is far from certain. It also focuses solely on resource spending, while for some departments like Transport what really matters next Wednesday is their capital allocation.
Unlike previous spending reviews, overall DEL spending (what’s called the ‘spending envelope’) has not been firmly set in advance. Indeed the Summer Budget was unusual in specifically leaving leeway for the fact that it could change. That might be to reflect a changed economic or fiscal forecast, to allow borrowing to take more of the strain or because of further tax rises or benefit cuts.
Don’t be complacent: It may seem as though the Coalition government that has blighted the UK for the past three years is marching willingly to its own demise – but that is by no means certain. We must all be vigilant against the apathy that allows them to spread their poisonous views and convince impressionable people that they are speaking common sense ideas that are held by the majority, when we all know that this is a falsehood.
So Gideon George Osborne is announcing £11.5 billion of cuts to be implemented from April 2015 to the end of March 2016 – so what? There will be a general election the following month and he would be delusional if he thinks his party will win.
Ed Balls has said Labour would match the Coalition’s spending totals for that financial year, but we should not be fooled into believing this means Labour would make exactly the same choices as a Conservative or Conservative-led government. It won’t.
Ed Balls could cancel the lot and, working with a decent Labour Work and Pensions secretary (not Liam Byrne), install a new system aimed at the causes of unemployment, sickness and disability, and still pay less than the current government.
You see, Tories aren’t really about saving money for the taxpayer. They’re about making poor people pay taxes to support rich people who don’t need them.
That’s just one – extremely oversimplified – example of why I don’t think we have to live in a country dominated by ‘Ballsbornism’, even though I coined the expression earlier today in a response to a comment.
‘Ballsbornism’ implies a consensus economic policy, much like the ‘Butskellism’ of the 1950s that married the ideas of Tory Rab Butler and Labour’s Hugh Gaitskell, and recent announcements by Ed Miliband and Ed Balls have stirred up fears that the Labour front bench has capitulated to the Tory economic viewpoint.
This blog has been part of that, and I make no apology for it. Like all political movements, Labour must be made to see that it cannot take the easy way out. People’s lives – no, I’m not making this up – depend on their decisions and those lives will be on their conscience if they cock up the system (as Osborne has been doing) or make lazy decisions.
The Tory-led Coalition likes to say its policies on benefits “encourage” people to sign off (and goes on to suggest that they then get jobs, although the evidence is overwhelmingly that they end up with no form of income at all); if we want better for our future, then the people of this country must similarly “encourage” Labour into policies that will genuinely improve our situation.
I have outlined my opinion of what those policies should be, in a previous article, so need not rehash them here.
And let’s remind ourselves of the absolute lunacy that could be foisted on us if the Conservatives come back into power: Tory backbencher Peter Bone, alongside similar-minded nutters, has compiled an alternative Queen’s Speech (or is it an alternative to the alternative, as Labour already produced one?).
This suggests restoring the death penalty for criminals (we all know this leads to injustice); privatising the BBC (more money for rich Tories who don’t deserve it, along with a diminished and politically-biased national broadcasting service), abolishing human rights legislation (to the huge detriment of all citizens and working people who rely on it, as discussed many times on this blog), and renaming the August Bank Holiday as ‘Margaret Thatcher Day’ (an insult to everybody whose lives were blighted by her policies).
Bone, whose bizarre pronouncements create semi-regular moments of comedy during Prime Minister’s Questions, told the BBC he was “putting forward Conservative policies” that would be “very helpful” to David Cameron.
This is an elected Conservative member of Parliament, remember – one of several who have drafted these proposals. And let’s not forget the Free Enterprise group of Tory right-wingers, whose book Britannia Unchained suggests (wrongly) that British workers are among the laziest in the world, and anyone unemployed for more than six months should do 30 hours’ community service and lose 10 per cent of their benefits, as if being forced out of work by (Tory) employers was a crime!
So let Osborne have his moment, when he announces his review on Wednesday. Then reflect on where you’ll be putting your vote in 2015 and enjoy the prospect that he will have wasted his breath.
Now get out of that: Mark Hoban has been challenged to come clean with the facts. If he does, he’ll be the first DWP minister to do so since Labour left office.
Let’s get something straight from the outset: By Parliamentary convention, if a government minister lies to MPs – or is found to have told falsehoods and does not then correct the inaccuracies, that is a resignation matter.
Until the current Conservative/Liberal Democrat coalition came into power, this convention was observed by all parties. The fact that the current administration – which, let’s remember, did not win any elections to get into office – does not observe this convention is yet another indication that it is an outlaw government.
Iain Duncan Smith is a classic case of the Coalition attitude. He has told so many porkies to Parliament and the public that he is to be dragged before the Commons Work and Pensions committee to account for them. The trouble is, even if he is forced to admit knowingly misleading us all, there is no reason to expect him to do the decent thing and fall on his sword. He’ll damn our impertinence for having the cheek to question him.
Probably the best way forward with him would be for the Work and Pensions committee to take his case to the Speaker of the House of Commons, and the committee on Standards and Privileges, as this seems to be the correct route to take, in order to expel an MP.* If he won’t go willingly, he’ll have to be pushed.
Of course Mr… Smith might decide to claim he cannot answer some of the more involved questions, if he hasn’t had prior notice of them; he could say he hasn’t been able to put the facts together. Then, instead of admitting he is dishonest, he’ll just be admitting incompetence. No Coalition minister has yet been sacked for that.
One of his fellows who’ll have no such excuse is Mark Hoban, due to face questioning by Sheila Gilmore MP – who also sits on the Work and Pensions committee – in an adjournment debate on the audio recording of Atos work capability assessments at 7pm today (Wednesday, June 12).
Why not? Because she has sent him advance notice of all the questions she will be asking, in her speech, which she has published here for everyone to see.
Firstly, she attacks the government’s assertion – made by Hoban’s fellow truth-bender Chris Grayling, when he was in Hoban’s job – that there is a lack of demand for audio recording of assessments. He said a pilot scheme to test whether audio recording assessments improved their quality had produced a negative result: “We decided not to implement universal recording because, based on the trial experience, people did not want it.”
This is – to nobody’s surprise – untrue.
The Atos pilot concluded, “68% of customers agreed to the recording when contacted by telephone prior to the appointment.”
This total dropped to 46 per cent due to some claimants not taking the assessment. This is most likely caused by the phenomenon of ‘churn’, as discussed on this blog, and others, in previous articles – a fairly consistent number of claimants stop their claim before taking the assessment because they either get better, find a job that can accommodate their disability, or die.
As far as Atos were concerned, the result was beyond doubt: “Our recommendation would be that recording should become routine as it is in a call centre or for example – NHS direct.”
This is the recommendation of the company running the much-criticised assessment scheme, remember. Even Atos wants better accountability and an improved quality of assessment that this may bring.
Ms Gilmore goes on to attack the government’s claim that the number of claimants requesting a copy of their recording is just one per cent. This cannot be regarded as an accurate assessment of the number who would like a copy, for two reasons, she tells us.
Firstly, the assessors used handheld devices to make their recordings, meaning they would have to be transferred to computer and burnt to CD afterwards, preventing claimants from taking recordings away with them on the day. Instead they had to make a further request – in writing. “Unsurprisingly this suppressed uptake,” Ms Gilmore’s speech states.
Secondly, claimants were warned off applying for copies by assessors who told them recordings would only be useful to them if they appealed. The report that stated only one per cent of claimants persisted in their request was completed only days after the pilot study ended, meaning most of those involved had not received a decision on their claim and therefore did not know whether they needed to appeal. Demand may well have been higher, had the measurement been taken after a reasonable time.
This is just one example of the DWP timing processes in order to get its way. We’ll return to that topic in a moment.
Chris Grayling also stated that the DWP would offer “everyone who wants it” the opportunity to have their assessment recorded. In practice, this seems an empty promise, as Atos had around 50 audio recording machines on May 22 this year, but undertakes more than 11,000 assessments every week.
Also, the option to request recordings is not offered in any official DWP communications to claimants. As Arthur Dent points out in The Hitch-Hiker’s Guide to the Galaxy, it’s not like they’ve gone out of their way, “like actually telling anyone or anything!”
What we’re seeing is a series of attempts to distort information and skew the facts, to create a story that supports DWP ministers’ intentions, rather than the evidence. That’s bad for the country, because it means decisions are taken on the basis of fantasy, diverting attention and effort away from where it is needed.
“Today I have taken the unusual step of emailing a copy of my speech for an upcoming debate to Mark Hoban, the Minister due to speak for the Government,” said Ms Gilmore. “Now he can have no excuse for not answering the important questions I intend to put to him…. I want to ensure the Minister can’t ignore these points, and that’s why I’ve take this action today.”
Whatever happens this evening, it seems unlikely that anything can be done about the DWP’s latest misuse of statistics – actually withholding performance data about the Work Programme (as reported previously in Vox Political) and the Youth Contract until the day after the government’s comprehensive spending review.
This means decisions are likely to be made on ministers’ recommendations, rather than on the basis of fact – and we now know that we cannot trust those recommendations at all.
The Telegraph, reporting the delay, stated that the figures – when they arrive – “are expected to be very disappointing.
“It is hardly unreasonable to say that the Government would sooner Labour did not have these to throw at it when George Osborne gives details of the Comprehensive Spending Review in Parliament on June 26.”
Columnist Tim Wigmore concludes – and this is in the Torygraph, remember: “The Government only has itself to blame if it’s getting harder to give it the benefit of the doubt.”
That time is long gone.
There must be no dishonesty in Parliament.
If Mark Hoban fails to give full and frank answers to the questions Sheila Gilmore has put to him, but resorts to distortions of the figures or outright falsehoods, then he must be expelled from his job, not just as a minister but as an MP.
That goes for his boss, Iain Duncan Smith. It goes for Grant Shapps, Michael Gove (mentioned in the Telegraph article) and, above all, it also goes for David Cameron.
*If any MP is reading this and able to provide details of the correct procedure, please get in touch.
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