Tag Archives: working-age

Tax and benefit changes bleed families – how will the Coalition spin this?

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The Coalition’s changes to taxes and benefits have hit low-income, working-age households the hardest – costing the most hard-up (those with children in the lowest 10 per cent of earners) a massive £1,223 per year.

A report by the Institute for Fiscal Studies also states that the richest 10 per cent of households with children lost £5,350 a year, on average. This means that those in the lowest income decile have lost the most, in both real-money terms and as a percentage of their income.

Hang on! Hasn’t the Coalition been saying that top-earners have been hit the hardest by their ‘reforms’? Have ministers been lying to the nation yet again?

We may as well answer that straight away: Yes.

It is only when changes introduced by the previous, Labour, government are included in calculations that those in the highest-income group are shown to be feeling the pinch more than the poorest in society.

Let’s think about that for a second. Doesn’t this show that the last Labour government had its heart in the right place, was doing what it could to protect low-earners and was aiming its version of austerity where such policies belonged – at the rich?

We may as well answer that straight away, as well: Yes. Yes it does.

And Labour has moved to capitalise on this. Shadow treasury minister Cathy Jamieson said: “For all the government’s claims, this report shows that they have raised tax by over £13.5 billion a year. And for millions of working people the rise in VAT and cuts to things like tax credits have more than offset changes to the personal allowance.

“Families with children have been hit hardest of all by David Cameron’s choices – a clear betrayal of his promise to lead the most family-friendly government ever.

“The Tories are now promising to cut tax credits again for millions of working families and refusing to rule out another VAT rise to pay for their unfunded promises. It’s clear working people can’t afford five more years of this government.”

She said Labour’s plan “will ensure we earn our way to rising living standard for all”, reversing the Coalition’s “£3 billion a year” tax cut for the top one per cent of earners and helping 24 million working people by restoring the popular 10p starting rate of tax.

Before we start ringing the victory bells for Labour, though, the IFS report also states the following: “Middle-income working-age households without children have gained the most from the Coalition’s changes. They have gained significantly from the Coalition’s large increases in the income tax personal allowance and are much less affected by benefit cuts.”

It follows that those on middle incomes – that’s not the average income; it means incomes in the middle of a range that continues into the stratosphere, due to rises in executive pay levels – are likely to support the Tories, along with pensioners who have also been largely unaffected (so far – it’s future pensioners who have been hit hard).

The question is, will these groups be happy to sit in their own, insulated little world, selfishly ignoring the collapse of the country all around them – the deliberate underfunding-to-destruction of the NHS, the institutionalised torture of benefit claimants, moves that deny the justice system to those who can’t pay for it, plans to end human rights in the UK, plans to allow fracking under their homes, an economic policy that relies on them going into debt by almost twice as much as they earn (enough to have them legally declared bankrupt if they have trouble paying it back)… the list is endless…

Are middle-earners and pensioners so selfish that they will vote the Tories back into power just because, in a country that is collapsing around them, as the saying goes:, they’re “all right, Jack”?

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Osborne’s biggest lie: ‘Conservatives are competent’

As history will remember him: George Osborne will be remembered, but not for his calamitous career as Chancellor. His name will forever be linked to cocaine and (let's call them) 'ladies of the night'.

As history will remember him: George Osborne will be remembered, but not for his calamitous career as Chancellor. His name will forever be linked to cocaine and (let’s call them) ‘ladies of the night’.

Georgie Orgy, nose puddings and lies
Starved the poor – some of them died.
When the voters have their say
George Osborne will run away.

It would be impossible to take George Osborne seriously, if not for the fact that his plans threaten the livelihood, health, and indeed the lives – not only of British citizens, but of the nation itself.

His words yesterday (Monday), during the row with the Liberal Democrats over economic policy, certainly do not deserve any respect after the absolute nonsense he spouted to Parliament last week, masquerading as the Chancellor of the Exchequer’s Autumn Statement.

According to the BBC, he said spending cuts to reduce the deficit are a “price that works for our country”. Why?

“We are going to have to make savings.” Why? “We are going to have to cut certain welfare bills like benefits that go to working-age people.” Why?

“But the prize is economic stability, growth, jobs in the future, brighter future, I think that’s a price that works for our country.” Why?

Notice that he did not give any reasons for his statements. He presented them as though they were incontestable facts. They’re not.

Look at, for example, his claim that working-age benefits must be cut. Is he proposing cuts to benefits taken by working people because their employers are too miserly to pay them a living wage? Does he have a plan to help those people make ends meet, then? This writer hasn’t seen it!

That’s unless it’s the hoary old “Ask your boss for a raise.” Clearly, privileged George never had to try that.

You can be sure he won’t be requiring companies to pay a living wage to make up for the shortfall of in-work benefits that he is planning. The result is as inevitable as night following day: Working people will be unable to support themselves. If they pay housing costs but don’t buy food, they’ll become sick and will lose their jobs; if they buy food but neglect the rent/mortgage, they’ll be evicted and will lose their jobs due to homelessness.

The huge cumulative drop in the amount of cash being circulated through the economy implies a consequent effect on businesses; with fewer ordinary working people able to buy their goods, firms will go out of business. Super-rich twits like Osborne will be insulated from the effects for a while but the recession he is determined to cause will eventually overtake even his family wallpaper business. What will he do then?

The last four and a half years have shown that cutting public spending will not reduce the deficit. As many people have pointed out, it is madness to repeat the process and expect a different result. Looking at the BBC quotation, it seems Osborne is caught in a lie. His spending cuts aren’t about reducing the deficit at all; they’re about reducing the state – as bloggers like Alex Little, Martin Odoni, Professor Simon Wren-Lewis, kittysjones, and blogs like Flip Chart Fairy Tales, Skwawkbox, and even Vox Political have made clear.

We don’t have to make savings – we should be concentrating on increasing productivity and profit instead. That will get the deficit down much more quickly than whittling away the apparatus of the state until the damage is irreparable.

We don’t have to cut benefits to working-age people – we should be ensuring that nobody with a job needs to claim benefits; that they are paid enough to support themselves and their families.

We should also be providing the highest-quality education to youngsters and training to jobseekers young and old, in order to ensure that they can get a job without spending useless months parked in a benefit system that is more about hiding the unemployed in sanction hell than about providing any actual help.

Osborne’s way offers no stability, no growth, no jobs, and you’d better believe he offers no future.

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Chancellor fails to understand Welfare Reform Act – Jayne Linney

We’re spoilt for choice with this subject – so many people have commented on it. Here’s Jayne Linney‘s contribution, as hers was the first to reach Vox Towers:

I am totally unsurprised, albeit perturbed,  that the Chancellor of the Exchequer and Second Lord of the Treasury George Osborne, has demonstrated his total lack of understanding of the Welfare Reform Act. In his Conference speech he announced ‘working-age benefits will be frozen for two years after 2015′ with an added proviso that “the elderly and the disabled will be protected”.

He then confirmed Cameron’s statement of yesterday, of a £3,000 reduction in the Benefits Cap; and this is where confusion arises. Despite his promise of protection for disabled people, individuals in receipt of the work-related activity component of ESA will be included in the cap. Clearly Osborne has failed to notice that many disabled people are in receipt of precisely this benefit; and frequently these are the same people awaiting mandatory reconsiderations and/or Tribunals.

For more of her observations on this, please read the rest of the article on Jayne’s site.

You might also wish to try the Same Difference blog, which links to Ekklesia‘s article on this.

Follow me on Twitter: @MidWalesMike

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Why are councils silent about the Localism Act’s eviction threat?

If you don’t have a plan to deal with the financial demands of the Localism Act, this could be you.

Has anyone received any information from their local authority about how it plans to implement the new council tax support scheme required by the Localism Act?

This scheme will be running from the beginning of April next year (2013), and it is therefore a matter of urgency that we find out what it will involve. Or is it our councils’ intention to take us all by surprise?

It is two months since I wrote my article on the subject, Poll Tax revival plan to take away your home, and I have heard nothing from my own local authority.

I have therefore written a letter, asking for information. If you are in the same situation, you may wish to use what follows as a template:

Dear County Council,

You will be aware that the Coalition government’s Localism Act means that Council Tax Benefit will be scrapped from April next year. Instead, local authorities – such as yours – will be compelled to set up local council tax support schemes. The aim is to cut 10 per cent from the current council tax benefit bill, or around £470 million.

Because pensioners will not be attacked in this way (at this time) – the legislation exempts them – this means working-age people are likely to face a loss of at least 16 per cent of their benefit.

Councils could choose to reduce spending in other areas or increase council tax, but these would affect groups other than current benefit recipients and so, in the name of fairness, I think we can be sure those who are on benefit now will end up paying that £470 million bill.

You can be sure that the illusion of choice has been included by the Coalition to ensure that you – and all the other local authorities in the UK – take the blame for what will be a considerable increase in the bills being paid by poorer households. I don’t think anyone who devised the legislation stopped to think what the tax hike will be, as a proportion of claimants’ earnings.

Worse than that, though, is the fact that I have not heard a single word from you about how you plan to approach this matter. Implementation of the scheme is now less than six months away, and those who will be affected need to plan how they intend to absorb the extra expense.

My fear is that you think you can remain silent until the very last minute in the hope that this will minimise harmful publicity against you. This would be disastrous for your taxpaying constituents.

Such a policy may well leave them unable to pay their bills and therefore, ultimately, homeless.

Please publicise your proposals to deal with the demands of the Localism Act now.

Poll tax revival plan to take away your home

How much do you like your home?

Is it a good building? Do you get on with the neighbours? Do you live in a pleasant part of the country?

Well, take a good look around because you could soon lose it all if the Tory-led Coalition government has its way.

The plan is to scrap Council Tax Benefit from April next year and compel local authorities to set up local council tax support schemes, in order to cut 10 per cent from the current council tax benefit bill – a total of around £470 million per year.

Because pensioners will not be attacked in this way – at this time – this means working-age people are likely to face a loss of at least 16 per cent of their benefit.

Councils could choose to reduce spending in other areas or increase their revenue through council tax but, as these will affect groups other than current benefit recipients, I think we all know which way our councillors will be pushed. Either way, the local authority will take the blame – or at least, that’s what the Coalition hopes.

It will then be up to those authorities to pursue poor people through the courts for payment, if they cannot afford the new charge. This could amount to more than 760,000 people who work, but whose incomes are so low that they currently receive council tax benefit (The fact that the benefit being paid to them is effectively a subsidy for their employers, who should pay enough for them to support themselves without the need for benefit, is apparently a side issue) plus the disabled (already a target for hate campaigns by the Department for Work and Pensions), the unemployed, and families with young children.

The alternative, of course, is to move somewhere cheaper. You see, this is another part of the government’s social cleansing policy, created to run alongside the housing benefit cap and the ‘bedroom tax’.

The plan, in the government’s Localism Bill, has already been labelled a revival of Margaret Thatcher’s hated Poll Tax because it aims to ensure that everybody pays, no matter how little money you have.

To put this in perspective, the annual saving will total less than one-twelfth of Vodafone’s tax bill. That company owed the UK Treasury £6 billion but the government let it get away with paying just £1.25 billion after a ‘sweetheart’ deal was made with HM Revenue and Customs. That’s the same government that will have you kicked out of your home for the sake of a few pennies.

Rebates of up to 100 per cent have been available to the unemployed, disabled people, full-time carers and households on low incomes, many of whom have not been required to pay at all, ever since Council Tax came into effect in 1992.

Councils are currently setting out how they plan to deal with the change. Manchester has launched a consultation on proposals to require all households except pensioners to pay at least 15 per cent of the council tax bill, while Barnet is proposing a minimum 25 per cent charge for all working-age residents – clearly that council wants to clear out the poor and set up shop as a desirable residence for the rich.

Adding insult to injury, the tax increase for the low-paid will be timed to come into effect next April, on the same day as a tax cut for millionaires.

It all seems a very vindictive way to keep the scheme’s architect, Eric Pickles, in pies.

Wouldn’t it be better just to get Vodafone to pay its taxes?