Tag Archives: taxpayer

Taxpayers are being misled into funding the private firms that are raiding our NHS

NHSRIP

It seems more than half of the UK’s voting public would be willing to pay more income tax in order to fund the National Health Service.

Pollsters ComRes told The Guardian that 49 per cent of people would accept a tax hike if the money went directly to the NHS, compared with 33 per cent who would not and 18 per cent who didn’t know what they would do.

This must be very gratifying for David Cameron, whose creeping privatisation of the NHS is at least partly to blame for the increasing deficit faced by the UK’s flagship public service. The Private Finance Initiative, introduced by the Conservatives in the early 1990s, must also take much of the flak, along with a reduced funding commitment from the Coalition government.

(We can’t be sure about the government’s funding commitment. Back in 2010, then-NHS chief exec Sir David Nicholson said it would have to make £20 billion of efficiency savings within four years – but the Coalition Agreement of 2010 promised “We will guarantee that health spending increases in real terms in each year of the Parliament”. However – again – by late 2012 the figures showed a real-terms cut in expenditure which meant the government was not taking its commitment seriously.)

Professor Chris Ham, chief executive of health thinktank The King’s Fund, reckons people want to help the NHS because they have been led to believe that it is starting to struggle financially and clinically, and because they value it very highly.

This indicates that the public has been misled.

Look at the Private Finance Initiative. According to Private Eye (issue 1,369, p34), buying its way out of a PFI contract for Hexham General Hospital will cost Northumbria NHS Foundation Trust no less than £114.2 million. That’s exorbitant enough, but consider this: the buy-out will save around £3.5 million a year on PFI costs over the 19 years the contract would otherwise have had to run.

How badly are PFI contracts crippling the NHS? Well, according to The Guardian, PFI repayments were costing the service £1.76 billion – that’s almost two per cent of the £100+billion budget.

That pales into insignificance next to the amount spent on contracts for private companies to carry out NHS work – £6 billion. Some of that, admittedly, will go into healthcare – but a large proportion will be hived off as profit.

And then there are the real-terms expenditure cuts that appear to be part of government policy. Spending has not risen in real terms since the Coalition government came into office in 2010.

No wonder the NHS is in trouble.

So thank goodness for all the kind-hearted earners who are happy to pay an extra penny from every pound they earn, for the NHS. But that won’t cover the projected £30 billion gap in its finances by 2020.

Taking average earnings to be £26,000 per year (as the government does), then every earner would have to pay an extra 4p in the pound. Tax paid on £26k per annum is 20p in the pound, so that’s a tax increase of nearly 17 per cent or one-sixth.

Earners would be £1,040 per year worse-off. That could put many of them in financial difficulty.

And they would be paying debts accrued by big businesses who wanted to profit from healthcare.

Happily.

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Housing benefit bombshell has been building up for decades

housing-benefit-graph

Why are we being asked to believe it is such a surprise that the number of working people who have to rely on housing benefit has doubled in the last five years – at huge cost to the taxpayer?

It is all part of the “long-term economic plan” that the Conservatives keep mentioning, every chance they get.

That plan is to provide government support to major employers and to private landlords rather than the people who need it.

We know that the Conservatives have spent almost 40 years working to undermine working people, with policies designed to increase financial insecurity among those who have to work for a living. For example, the humbling of the unions ensured that increasingly meagre pay settlements would contribute to an ever-widening gap between the lowest and the highest rates of pay. Huge amounts of wealth have been transferred from the masses to an ever-smaller ‘elite’, guaranteeing their support for the Tories.

Ever-diminishing pay and rising living costs have meant that increasing numbers of people have had to claim benefits, even though they have been in full-time work. Again, this attacks people on low and middle incomes, rather than those who are paid the most; people in the highest tax brackets have been able to take advantage of legal tax avoidance schemes, some of which have been created by the current Chancellor, George Osborne. That has left those on lower pay scales to subsidise housing benefit through the taxes they pay – another drain on their resources.

Depressed rates of pay for those in work have necessitated government action on benefits for the unemployed, in order to justify claims that the Coalition has been “making work pay”. This has meant below-inflation increases in out-of-work benefits that have made them inadequate to cover living costs, forcing the unemployed to face the possibility of losing their homes and possessions to the bailiffs as their debts mount up. In order to avoid this, they find themselves forced to accept work at ridiculously low rates of pay, if they can find it.

This in turn has made it possible for employers to refuse calls for pay increases – anyone making such a request may be told that an unemployed person would happily do their job for even less – and so the wheel turns back to its starting point and the cycle begins all over again.

A consequence of all this is that private landlords benefit from increased inflows of housing benefit into their pockets. The law allows them to increase their rents in line with the going rate, with no reference to tenants’ ability to pay; housing benefit is then used to help tenants achieve that amount, but it is the landlord who benefits from the increase – not the tenant. These are people who are already, by definition, well-off – otherwise they would not have been able to buy the property and make it fit to rent out.

The Conservatives’ “long-term economic plan” is to leech wealth from anybody poorer than them and create a new feudalism, with themselves as lords and everybody else as vassals, only able to make a living under conditions granted by the moneyed few; a modern slave-state.

According to The Independent, the cost to the taxpayer of in-work benefits will be £6 billion by 2018-19, nearly triple the £2.2 billion it cost in 2009-10. LabourList reckons the total cost of in-work poverty by 2019 will be more than double that amount, at £12.9 billion.

The total cost of housing benefit has already almost tripled, from £8.8 billion in 1990 to £24.4 billion now – despite the apparent efforts of Iain Duncan Smith’s Department for Work and Pensions. This is because all their cost-cutting efforts have been about finding ways of denying the benefit to people who deserve it.

Helping people earn enough to obviate the need for housing benefit runs contrary to the “long-term economic plan”, you see.

And what do you think this says about where the benefits of economic growth are going?

The Independent article states that the Department for Work and Pensions has claimed the number of unemployed housing benefit claimants has fallen since 2010, arguing that it is better for people to be employed, paying taxes and contributing towards their rents than to be “languishing” on out-of-work benefits, living on government payouts.

Technically, this may seem like a good argument. The minimum wage for full-time work is £11,700 per year, more than the increased tax threshold introduced by the Coalition government – but this means that, with Income Tax at 20 per cent, a full-time worker would lose one-fifth of everything earned above the £10,000 threshold, passing just £340 on to the government. They are likely to receive more than that in housing benefit. And the level of pay is still a pittance.

Worse still, a drop in the number of unemployed claimants does not mean they have all found jobs. Some will have been pushed off the system by the Bedroom Tax, which has made it impossible for some households to meet their rent commitments.

And there is no guarantee that the extra working people are paying taxes either – they might be self-employed (or claiming to be self-employed – see earlier VP articles on the subject) who are not earning anything like enough money to provide for themselves; they might be on zero-hours contracts – technically in work but on health-endangering wages; they might even be on a government-mandated Workfare scheme, in which case their only pay will be state benefits.

Mark Harper, Minister for Disabled People, claimed that the Coalition government had taken action to get the system under control by capping benefits “so no family can claim more than the average family gets by going out to work and we’ve put an end to unlimited housing benefit”.

He added that Labour voted against the cap, and against a general limit on benefits.

But this is disingenuous. The Tory/Coalition benefit cap was set at a level more than £5,000 below the income an average family receives – because it didn’t take into account what such a family would get in benefits! It seems likely that level was pegged lower because the Tories realised that a cap at the proper level would mean almost nobody would be disqualified from receiving benefit.

Harper’s claim that the system under the previous Labour administration “saw some people claiming £104,000 a year,” is also disingenuous as it related to a handful of people in specific circumstances. None of them are receiving anything like that amount now, and it is unclear whether this had anything to do with Coalition policies.

Labour, on the other hand, has hit the nail squarely on the head by pointing out that the rise in benefit claims is entirely due to the Tory-led Coalition’s failure to tackle low pay, insecure work and the cost of living crisis – although the opposition party stopped short of actually claiming that this was the plan all along.

The party has said that, if elected into office, it would build more homes and cap rents, easing the excessive demand that has made it possible for landlords to demand more and preventing abuse of the rental market.

Labour would raise the minimum wage and introduce contracts for the living wage – at which an employee earns enough not to need benefits – wherever possible.

Both sides are treating housing benefit like a disease.

The difference is that the Conservatives want to cure it by attacking the victim, while Labour want to attack the cause.

Which would you prefer to have as your doctor?

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Jobs for the boys – and a possible conflict of interest – in new government contract

[Image: Ktemoc Konsiders - http://ktemoc.blogspot.co.uk/]

[Image: Ktemoc Konsiders – http://ktemoc.blogspot.co.uk/]

The Coalition government has named the company that is to carry out its new programme to discourage people from claiming incapacity benefits – and, like all Coalition decisions, it is a disaster.

The contract for the new Health and Work Service in England and Wales will be delivered by Health Management Ltd – a MAXIMUS company.

This is triply bad for the United Kingdom.

Firstly, MAXIMUS is an American company so yet again, British taxpayers’ money will be winging its way abroad to boost a foreign economy, to the detriment of our own.

Next, MAXIMUS is already a Work Programme provider company in the UK. The Work Programme attempts to shoehorn jobseekers – including people on incapacity benefits – into any employment that is available, with the companies involved paid according to the results they achieve (on the face of it. In fact, it has been proved that the whole system is a scam to funnel taxpayers’ money into the hands of private firms as profit, whether they’ve done the work or not). Health and Work, on the other hand, is a strategy to slow the number of people claiming incapacity benefits with an assessment system – think ‘Work Capability Assessment’ designed to fast-track sicknote users back to their jobs.

We know from the government’s original press release that it has failed to reach its target for clearing people off incapacity benefit, so it seems that Health and Work has been devised to make more profit for MAXIMUS by ensuring that it can claim fees, not only for the number of incapacity benefit claimants it handles on the Work Programme, but also for the number of employees it ensures will NOT claim incapacity benefits.

It’s a win-win situation for the company and a clear conflict of interest – logically the firm will concentrate on whichever activity brings it the most UK government money. MAXIMUS may claim there are ‘Chinese walls’ to prevent any corruption, such as one activity being carried out by a subsidiary, but this must be nonsense. MAXIMUS will do what is best for MAXIMUS.

Thirdly, we have a new layer of bureacracy to torture sick people who only want peace and quiet in order to get better. Look at what Vox Political had to say about the scheme when it was announced in February:

“‘The work-focused occupational health assessment will identify the issues preventing an employee from returning to work and draw up a plan for them, their employer and GP, recommending how the employee can be helped back to work more quickly.’

Health doesn’t get a look-in.

“No, what we’re most probably seeing is an expansion of the “biopsychosocial” method employed in work capability assessments, in an attempt to convince sick people that their illnesses are all in their minds. Don’t expect this approach to be used for people with broken limbs or easily-medicated diseases; this is for the new kinds of ‘subjective illness’, for which medical science has not been prepared – ‘chronic pain’, ‘chronic fatigue syndrome’, fibromyalgia and the like.

“People with these conditions will probably be sent back to work – with speed. Their conditions may worsen, their lives may become an unending hell of pain and threats – I write from experience, as Mrs Mike spent around two years trying to soldier on in her job before finally giving up and claiming her own incapacity benefits – but that won’t matter to the DWP as long as they’re not claiming benefits.”

That previous article was wrong, in fact. There is a health angle to this.

It is a plan to stitch us all up.

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Cutting red tape has cost the taxpayer billions

A waste of taxpayers' money: This is Tory business minister and twit Michael Fallon. The amount of money his 'red tape' cuts have cost this country mean he should be behind bars, not in front of them.

A waste of taxpayers’ money: This is Tory business minister and twit Michael Fallon. The amount of money his ‘red tape’ cuts have cost this country mean he should be behind bars, not in front of them.

Conservative business minister Michael Fallon has announced that the Coalition government’s cuts in ‘red tape’ are saving businesses £1.5 billion every year. How wonderful for him.

What he has neglected to mention is the fact that the taxpayer will have to pick up the tab – possibly at much greater cost.

Fallon reckons the government is “stripping back unnecessary rules that restrict enterprise and act as a brake on jobs and growth”.

For example, the Coalition has:

  • Removed thousands of “low risk” businesses from “unnecessary” health and safety inspections;
  • Stopped “responsible” employers from being held liable for workplace accidents and injuries that are “totally outside of their control”; and
  • Simplified mandatory reporting of workplace injuries.

The words in quotation marks are questionable. Who decides which businesses are “low risk”? Why would health and safety inspections by “unnecessary” in their cases? How do we know an employer is “responsible”, and why – after being labelled as such – should we believe they would not lie about whether an incident was “totally outside of their control”?

The possibilities for corruption are huge, now that the “brake” has come off.

Fortunately, it is possible to measure – very roughly – the effect of these measures; you simply look at the number of people applying for incapacity benefits.

These are people who are unable to work because of illness or injury. Counting them is not a perfect way of measuring the government’s success in cutting red tape while safeguarding employees’ health, because factors other than the workplace may be relevant in a number of cases. However, these should be seen as a minority only.

We know that, in May 2010, before the Coalition government came into office and started stripping away this “unnecessary” red tape, 28,300 ESA claims were awaiting assessment.

From the same source, we know that the number currently awaiting assessment is “just over” 700,000.

700,000!

Mr Fallon wants you to believe that none of these claims relate to his red tape cuts but the increase is simply too large to be discounted.

The lowest possible assessment rate of ESA (the amount they receive before their claim has been assessed) is £51.85 per week. Even if all claimants were receiving this, that’s a cost of £36,295,000 to the government, per week. The taxpayer pays that bill.

Over a year, it adds up to £13,247,675,000.

That’s at the assessment rate. Now, some of these may be knocked off-benefit after assessment – but this process, itself, costs money. It costs £311 per claim, according to the most recent official source available to this blog at the time of writing. Clearing the backlog would therefore cost £217,700,000.

This means the cost of assessing the 700,000 claims that have mounted up during the years of Conservative-led, red-tape-cutting Coalition government totals a vertiginous £13,465,375,000.

That’s almost nine times as much as Fallon thinks is being saved – spent on ESA assessments alone!

What a waste of taxpayers’ money.

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Labour’s rail plan – what we need, rather than what we want?

De-railed: After years of reliance on taxpayers' money, it seems the ride may soon by over for some of the UK's rail privateers [Image: PA].

De-railed: After years of reliance on taxpayers’ money, it seems the ride may soon by over for some of the UK’s rail privateers [Image: PA].

The Labour Party seems to have a real problem with offering the public what the public has demanded.

Faced with demand for the railways to be renationalised, they seem set to announce a plan in which private firms compete with a public service for franchises.

The promise of privatisation had been that the new franchise-holders would keep prices down, and any investment should be made by the companies concerned.

In fact, fares and taxpayer investment have rocketed since the railways were privatised by the last full Conservative government in the early 1990s.

It seems that Labour’s plan, which may be announced next week (the party is being very cagey about it), will mean franchises are awarded based on “a pragmatic choice between the state and private sector based on price, reliability and quality of service” (according to a report in The Guardian).

This, we are told, “will provide a solution that allays commuter frustration, provides a fair deal for the taxpayer and does not amount to a return to British Rail”.

Such a decision will not only anger rail unions, Labour MPs who have been calling for renationalisation, and 70 per cent of the British public, but also the rail industry’s private operators, who say current bids for franchises must not be upset by allowing the state to join the process belatedly.

It has also been claimed that an extra risk would be imported onto the public sector balance sheet if a state-owned company won a franchise.

But this is narrow-minded thinking; the state currently spends much more on the railways than it did before they were privatised – we already have a large risk on the public balance sheet.

If these private firms had done their jobs properly, then the taxpayer would not be shouldering so many of their costs and – perhaps – the Labour Party would not be considering even the partial renationalisation that is on the table at the moment.

None of the UK’s current rail operators have kept their promises and after 20 years, it is far too late for them to bleat about the situation they have created.

It should also be noted that the public sector has been running the East Coast Main Line extremely successfully since the franchise run by National Express failed, making expansion of this management model highly attractive to Labour strategists who need to find ways of trimming the burden on the public purse.

As a group of prospective Labour MPs in marginal constituencies wrote in a letter to The Observer, it would mean “hundreds of millions currently lost in private profit would be available to fully fund a bold offer on rail fares”.

If so, it seems that this halfway-house plan may provide exactly what we need, even if it isn’t what anybody wants.

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Public money is being thrown away on government-contracted scroungers

workprogramme1

It turns out that some people really do get to lie around all day, doing nothing apart from watching the money rolling in.

Bloody scroungers.

I’m sorry to swear – and you know I’m not usually rude – but these Work Programme provider companies really get my goat.

The revelation that companies such as Ingeus, A4e and Working Links were getting undeserved ‘incentive’ money (see also the BBC’s article), rather than being paid by results as has been claimed loudly and repeatedly by Tory ministers and backbenchers, is nothing new to Vox Politicalwe first pointed out the problem in November 2012, more than 18 months ago.

You see, not only has this been going on ever since the Coalition government established welfare-to-work in its current form –

Not only have government ministers and backbenchers been lying to you about the payouts given to the profit-driven privately-owned provider companies –

Not only have these companies been sucking down on your hard-earned taxpayer cash as though they had done something to earn it –

But the people they were supposed to be helping – people who have been forced into ever-greater poverty by the benefit uprating cap, arbitrary and unfair benefit sanctions, the bedroom tax, the £26,000 cap on benefits for families, the imposition of council tax on even the poorest households (in England at least), the stress of continual reassessment (if they are ESA claimants in the work-related activity group), the humiliation of having to visit food banks and who knows what else…

The people who are desperate to get any kind of paying job, despite the fact that zero-hours contracts could make them worse-off than unemployment, due to the effect on in-work benefits, despite the fact that those in-work benefits are also being squeezed hard, and despite the fact that there are at least five jobseekers for every job that becomes available…

These are the people that government ministers, backbenchers and the right-wing press keep victimising with their endless attacks on “skivers”, “scroungers”, the “feckless”, the “idle” and the “lazy”!

If I was unemployed and my MP had been caught slagging me off while praising these good-for-nothing so-called work programme ‘providers’, I would make it my business to bring them before the public, lock them into some medieval stocks and pelt them with rotten vegetables. Public humiliation is the least they should get for this continual insult to common decency.

But wait! There’s more.

It turns out that, not only are these work programme providers a bunch of lazy good-for-nothing parasites, but many of them are also a bunch of foreigners who’ve come to the UK to take our jobs!

Ingeus is Australian. G4S is part-Danish. Maximus is American.

It seems that all the politically-fuelled and media-driven anger against immigration into the UK from the rest of the European Union and beyond may be designed to distract us all from the fact that foreign firms are immigrating here to take government jobs that should be yours, and to steal your tax money.

Nobody can say they’ve earned it, after all.

But let us not be unfair. It would be wrong to concentrate on welfare-to-work providers when all of government is riddled with foreign interlopers.

Look at the Treasury, where the ‘Big Four’ accountancy firms have been re-writing tax law to suit their tax-avoiding corporate clients for the last few years. They are Deloitte (American), PriceWaterhouseCoopers (part-American), Ernst & Young (part-American) and KPMG (Dutch).

And then there is the huge, criminal, foreign firm that has been advising the Department for Work and Pensions on ways to privatise the welfare state since the mid-1990s – a firm so controversial that there is currently a moratorium on the mention of its name in the national mainstream media. It is an American insurance giant called Unum.

The best that can be said of these five corporations is that – at least to the best of our knowledge – they do work for a living.

… In their own interest – not yours.

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The depth of corruption in the Conservative Party’s new, privatised health system

n4s_nhs1

You can’t call it a National Health Service any more, can you?

The corruption imposed on the system by the Conservative-led Coalition government has reached new depths with the award of huge contracts to companies that donate to the Conservative Party, and plans to stop the corrupt re-hiring of executives who had already received large payoffs – after this has already happened.

Especially to blame are the Liberal Tory Democrats who made sure that this desecration could take place by supporting it in Parliament.

Did anybody else find it laughable when the Telegraph reported plans for the Queen’s Speech this year to include stopping highly-paid civil servants and NHS executives from receiving large redundancy pay-offs and then being re-hired only a few months later?

The plan, apparently part of the legislative programme to be announced by Her Majesty tomorrow (Wednesday), is effectively fixing the barn door after the chickens have come home to roost; already thousands of NHS executives who were sacked from their jobs in the pre-Health and Social Care Act service have been re-hired – at great cost to the taxpayer – into the new one.

The new law won’t be able to stop any of them from doing what they have already done, and Treasury Financial Secretary Nicky Morgan’s claim that “We must make sure hard-earned taxpayers’ money is not being squandered” is meaningless.

Meanwhile, health companies have been rewarded with ‘NHS’ contracts worth almost 1,000 times as much as the money they have donated to the Conservative Party.

According to the Daily Mirror, Circle Health has been given £1.36 billion of health work after investors gave £1.5 million to the Tories; and Care UK – who bankrolled former Health Secretary Andrew Lansley with £21,000 during the seven years he was secretly working on the Health and Social Care Act while Tory leaders were denying any plans for the top-down reorganisation it would authorise – has won £102.6 million in contracts and its chairman John Nash has been made a lord, in return for a £247,250 donation to the Tories.

Shadow Health Secretary Andy Burnham was right to say, “Nobody gave David Cameron permission to sell the NHS to his friends.”

Nobody did – Cameron lied about his plans for the NHS throughout his 2010 general election campaign, and then failed to win a mandate from the electorate.

But this is what David Cameron’s NHS was always going to be – a gravy train for rich asset-strippers.

The only losers are the sick – and Tories couldn’t care less about them.

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Why is it fair for taxpayers to subsidise businesses but not the disabled?

Swivel-eyed loon: This is the kind of many who thinks subsidising businesses to be lazy, while refusing to support disabled students (no matter how intelligent they are) is a clever idea. [Picture: Left Foot Forward]

Swivel-eyed loon: This is the kind of many who thinks subsidising businesses to be lazy, while refusing to support disabled students (no matter how intelligent they are) is a clever idea. [Picture: Left Foot Forward]

George Osborne was today set to attack both the Labour Party and UKIP as being bad for business. Isn’t that a bit rich, coming from a man whose party uses taxpayers’ money to subsidise private firms?

Across the UK, firms of all sizes – ranging from huge multinationals right down to the smallest traders – take advantage of the taxpayer-funded benefit system that supports people who earn less than the Living Wage (the minimum amount necessary for a working person to be able to pay their own way).

Osborne would have you believe this is good for Britain; more firms are employing more people – and that’s got to be good, right?

Wrong. More people may be employed, but on increasingly less money, meaning the burden on the taxpayer is increasing all the time.

But the taxpayer has increasingly less money to give to the Treasury, meaning that – instead of saving the economy – Osborne has put us into a vicious spiral of diminishing returns.

That’s what you get when you ask a towel-folder to do a real job!

It would be far better to demand that businesses pay the Living Wage. It isn’t an impossible dream – only a few decades ago, it was possible for one parent to earn enough to house and feed an entire family. Why doesn’t this happen anymore?

There is, in fact, no reason for it to have stopped.

The only conclusion we can reach is that the Tory government is using the system to leach money into the pockets of wealthy businesspeople. By pushing benefit payments so low that the unemployed and low-paid struggle to support themselves, they have made it possible for employers to pay less and pocket more.

That is why the names on the Sunday Times Roll Call of Shame (otherwise known as the Rich List) are so much richer this year than they were before the Tories weren’t elected.

The answer is simple: Compel businesses to pay the Living Wage.

Oh, but you think that will be bad for business too, do you?

Mr Osborne would tell you so, would he?

How odd – because this would be no different from a policy his government has been happily forcing on benefit claimants since 2010.

You see, as stated above, the policy has been to make living on benefits extremely difficult in order to force people to seek employment. This in turn allows firms to depress wages because they can tell the workforce there are plenty of other people waiting to take their places.

Only today, on this blog, we were discussing Tory David Willetts’ plan to cut Disabled Student Allowance. He wants us to believe that this will get students with disabilities to work harder, rather than expecting the taxpayer to lay everything at their feet; in fact, he is taking away their lifeline and leaving them to starve.

But the argument works just as well with employers. Any government with the guts to tell them that the crutch of in-work benefits is being removed and they will have to pay the difference is sending out the same message to employers as they did to benefit claimants: You’ve had it easy for too long. Now it’s time for you to earn your keep.

Some firms will go under. Unlike the disabled people being victimised by David Willetts (et al), we should shed no tears for them; they weren’t helping the economy.

More will pay up – finding new markets to fund the extra expenditure. These are the businesses that will build the real economic recovery.

Labour is one of only a few political organisations that support the Living Wage, and therefore the only mass-appeal political party that would have a genuinely beneficial effect on the economy.

Oh, but I forgot.

You were listening to George Osborne.

And he says Labour is bad for business.

But then – he’s no economist.

He’s a towel-folder.

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How do we wrestle fairness from a rigged economic system?

The problem in a nutshell - and this cartoon was drawn in 1972! [Image: Alan Hardman]

The problem in a nutshell – and this cartoon was drawn in 1972! [Image: Alan Hardman]

It’s terrific when an article makes you think.

Why Capitalism needs unemployment, by Cheltenham & Gloucester Against Cuts, tells us that unemployment is used as a weapon against the workers – with the threat of it used to force pay cuts on employees, while we are told to fear inflation if unemployment falls.

So fatcat company bosses win either way, it seems.

The article commented on Margaret Thatcher’s ideological mentor, Milton Friedman, who “understood that low levels of unemployment give confidence to workers, who can fight for better pay and conditions. When they’re successful, the profit margins of capitalists are reduced, causing them to put their prices up in response“.

We know this happens; we have seen it many times. Some may argue that it is different from cases in which shortages of particular commodities push up their prices and the prices of products that are made from them – but, with fuel prices as the only notable exception, have you ever seen prices drop after these shortages end?

The system is rigged to ensure that working people stay poor, either through pay cuts during high unemployment or inflation in low unemployment; meanwhile the employers and shareholders ensure that they stay rich, by sharing out extra profits gained by keeping pay low or by putting up prices.

What do they do with this money?

The answer, it seems, is nothing. They bank it in offshore tax havens and leave it there. This is why, we are told, Britain’s richest citizens have more than £20 trillion banked offshore at the moment.

That’s more than £20,000,000,000,000! Enough to pay off this country’s national debt 18,000 times over and still have plenty to spare. Enough to solve the problems of the world, forever. It is, in fact, more money than we can comfortably imagine.

It is doing nothing.

Faced with this knowledge, there can only be one logical question: Why?

Why rig the system so that ever-larger sums of money pour into these offshore accounts, if nothing is to be done with it? Where is the sense in that?

The only logical answer appears to relate to its effect on workers: Keeping the profits of their work away from the workforce means they are kept in misery and servitude to the ruling classes – the parasitical board members and shareholders.

There are knock-on effects. Taxpayers are hit twice – not only are they forced to grapple with ever-more-hostile pay offers, but their taxes pay for in-work benefits that subsidise corporate-imposed pay levels; they support people who have been forced into unemployment unnecessarily and the silly make-work schemes that are forced on those people by the Department for Work and Pensions, under threat of sanction.

It’s a protection racket. There should be a law against it. And this begs the next question: Why isn’t there a law against it? How can this corrupt system be dismantled and what should replace it?

That’s a very good question, because the other cosh being held over our collective heads is the possibility that firms will move abroad if new laws in this country threaten their massive profits. This is where an international agreement between nations or groups of nations would be very useful, if it was carried out in the right way – a Transatlantic, or Trans-pacific, Trade and Investment Partnership, perhaps.

And what do we see? Plans for such agreements have been put together and they do the exact opposite of what they should – tying the workers into ever-worsening conditions. This is why the TTIP, currently being pushed on the European Union, must be rejected – and why bosses will do anything to ensure it succeeds.

This is the situation. It seems clear that nothing will change it for the better until somebody has the courage to stand up to these manipulators (who were probably schoolyard bullies back in the day) and say enough is enough; change is coming – do what you will.

Tax evasion and avoidance is already a huge issue here in the UK; perhaps we need to make a criminal offence of manipulating the economy – with prison sentences for bosses who put their prices up purely to retain high profit margins when their salaries are already dozens of times higher than those of their workers.

But what else is needed? How can such a mechanism be brought in without scaring off business? Or should we let them go, and put something fairer in their place? Ban them from trading in the UK unless they conform to the new model?

These are ideas that need exploration – by many people, not just a few.

What do you think should happen?

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Tory policy on ‘zero hours’: Beggars can’t be choosers

140507choice

Isn’t it nice to see some clear blue water emerge between the main political parties on an important issue?

Less than two weeks after Ed Miliband announced that he would tackle the “epidemic” of zero-hours contracts if Labour wins the next general election, the Conservatives have confirmed that Universal Credit – if they can ever get it working – will force jobseekers into those very contracts.

Labour said workers on zero-hours contracts should not be obliged to be available outside contracted hours; be free to work for other employers; have a right to compensation if shifts are cancelled at short notice; have ‘clarity’ from their employer about their employment status, terms and conditions; have the right to request a contract with a ‘minimum amount of work’ after six months, that could only be refused if employers could prove their business could not operate any other way; and have an automatic right to a fixed-hours contract after 12 months with the same employer.

At the time, the Tories said the number of zero-hours contracts had increased under the last Labour government, which had done nothing about it.

This tired excuse has been trotted out far too many times to be taken seriously any more, but it may have led some members of the public to believe that the Tories were distancing themselves from zero-hours contracts as well. They are, after all, supposed to be The Party of More Choice. Perhaps they are, themselves, less than keen on this kind of exploitation.

Not a bit of it!

The Guardian revealed yesterday that conditions will be imposed on the receipt of Universal Credit, meaning that – for the first time ever – jobseekers could lose their benefits if they refuse to take zero-hour jobs – for three months or longer.

Currently, people on Jobseekers’ Allowance are able to refuse such jobs without facing penalties.

The policy change was revealed in a letter from employment minister Esther McVey to Labour MP Sheila Gilmore. She said Job Centre “coaches” would be able to “mandate to zero-hours contracts” – basically forcing them to accept this kind of exploitation by employers.

The DWP has also stated: “We expect claimants to do all they reasonably can to look for and move into paid work. If a claimant turns down a particular vacancy (including zero-hours contract jobs) a sanction may be applied.”

The message from the Conservatives – the Party of More Choice – is clear: Beggars can’t be choosers.

Their chums on the boards of big businesses want more profits, and know the way to get it – employ people on low pay and with no employee benefits. Zero-hours contracts mean you can be made to work fewer hours than you need in order for employers to have to pay National Insurance credits for you. You don’t get sick pay; holiday pay; or a pension. And you’ll probably still be on benefits, meaning the work that you do is subsidised by other hardworking taxpayers, most of whom earn only a little more than you do.

It’s a racket – as bad as workfare/mandatory work activity/the work programme/whatever-they’re-calling-it-today, in which taxpayers subsidise work carried out by jobseekers for participating employers, hugely boosting those firms’ profits while ensuring that the number of people without proper, paid jobs remains high.

Their attitude is that, if you don’t have a job, you are a beggar.

Beggars can’t be choosers.

So they’ll choose what you do, and they – or their boardroom chums – will benefit from it.

If you are a working taxpayer, think about this before casting your vote later this month – and especially before you do so in May 2015: A vote for the Conservative Party means more of your fellow citizens will be prevented from getting proper jobs and becoming contributing members of society by the greedy – and idle – rich.

A vote for the Conservative Party means more of your tax money going to subsidise fat business board members who already have more money than they can ever use.

A vote for the Conservative Party means a better life for them and their friends – and a poorer life for you.

You’d have to be mad to choose that.

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