The hapless Work and Pensions secretary IDS next great welfare reform the Bedroom Tax appears to be disarray today as he announced a partial U turn of his failed policy, now foster parents and people who has service children will now be exempt.
The real problem with the Bedroom Tax is that is fundamentally floored, it is based on a theory that people with lots of spare rooms in the socially rented sector are blocking properties for others who need homes and those whom with spare rooms should move into smaller properties.
The reason why the Bedroom tax is floored is because, there are not enough smaller houses to fill those who have spare rooms and those in the private sector are more expensive then the larger socially rented homes and these houses are peoples homes. So effectively this will mean a living standard cut or rent arrears.
The amended proposals from the government for the Bedroom Tax does not applied to those people with disabled children, almost half a million households that are home to a disabled person who are set to lose over £700.
Tenants affected will face a 14% cut in housing benefit for the first "excess" bedroom, and 25% where two or more bedrooms are "under-occupied". The government, which estimates the average household affected will lose £14 a week, says the policy will save the exchequer £500m a year
David Orr, chief executive of the National Housing Federation, which represents housing associations, said: "The DWPs' continued claim that DHPs [additional funding to mitigate the worst effects] will protect all of the most vulnerable is simply not true. Even if DHP was divided equally only among those receiving disability living allowance, they would receive only £2.51 a week, compared to an average loss of £14 per week. It doesn't add up."
Chartered Institute of Housing chief executive Grainia Long said: "Other people are also unfairly affected, for instance, people who need a bigger home because of a disability should also be exempt.
"We know that the open market doesn't cater particularly well for these people, and they should not be penalised for living in social housing when in many cases there is nowhere else for them to go."
I take the view that this is a wrong headed policy, I hope MPs fund themselves at this level for their expenses for their homes. Because someone rents a social housing home, it is still your home, socially rented properties are cheaper than private rented sector and this government has done little to boost supply of affordable housing or to tackle high private rents.
This assault on low income families continues tax and welfare changes, including tax credit cuts, and the VAT rise to 20% would be compounded by wage freezes, and failure to tackle fast rising cost of living, pushing 500,000 more children into poverty.
TUC general secretary Frances O'Grady said: "By the 2015 election, the majority of children in Britain will be living below the breadline. For any civilised society, that should be shaming."
This at a Time when the Conservative Liberal Democrat government are cutting tax to millionaires, it appears the wealthy can pay less and the poorest pay more, this is simply perverse.
Tuesday, 12 March 2013
Saturday, 9 March 2013
Oh OBR ed
After accusing There Is No Alternative (TINA) of being pretty deaf, turns a blind eye and does do what she says she will do, today I must add misrepresentation.
The Office of Budget Responsibility (OBR) has written to the Prime Minister to tell him he has misrepresented the commentary offered in regard to the government policies on the economic handling of the economy.
The OBR was constituted by this government and has constantly over estimated the level of growth in the economy, so perhaps it is unusual for OBR to correct the impression made by the prime Minister.
It seems logical, that if you take money out of the economy, higher taxes and you cut spending by the government, removing wages and supply chain and you do nothing about rising food and utility costs, you end up with less spending and the economy slows, to quote Nick Clegg (1.5.2010), "his 8 year old son could be able to work this out -- you shouldn't start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational."
Who says Nick Clegg always get it wrong, he was right then so why did the Lib Dems support a policy he knew would result in the current situation where the OBR rebuts the Prime Minister?
The OBR says “it is important to point out that every forecast published by the OBR since June 2010 has incorporated the widely held assumption that tax increases and spending cuts reduce economic growth in the short term”. We believe that fiscal consolidation measures have reduced economic growth over the past couple of years.”
It is worth noting that since the Conservative Lib Dem government first budget in June 2010 the countrys GDP has fallen by 6%, this due to the governments policy.
Some economists have argued the OBR underestimated the negative impact of the cuts, particularly its cuts to infrastructure spending, which has been slashed by 40 per cent over the past two years. Senior economists from the International Monetary Fund argue that many forecasters – including itself – misjudged the size of these so-called “fiscal multipliers” three years ago
We can only hope that David Cameron MP is spinning his own policy, if he actually believes that raising taxes, cutting spending and allowing inflation through a devalued currency will not adversly affect growth then we are really in trouble.
The Office of Budget Responsibility (OBR) has written to the Prime Minister to tell him he has misrepresented the commentary offered in regard to the government policies on the economic handling of the economy.
The OBR was constituted by this government and has constantly over estimated the level of growth in the economy, so perhaps it is unusual for OBR to correct the impression made by the prime Minister.
It seems logical, that if you take money out of the economy, higher taxes and you cut spending by the government, removing wages and supply chain and you do nothing about rising food and utility costs, you end up with less spending and the economy slows, to quote Nick Clegg (1.5.2010), "his 8 year old son could be able to work this out -- you shouldn't start slamming on the brakes when the economy is barely growing. If you do that you create more joblessness, you create heavier costs on the state, the deficit goes up even further and the pain with dealing with it is even greater. So it is completely irrational."
Who says Nick Clegg always get it wrong, he was right then so why did the Lib Dems support a policy he knew would result in the current situation where the OBR rebuts the Prime Minister?
The OBR says “it is important to point out that every forecast published by the OBR since June 2010 has incorporated the widely held assumption that tax increases and spending cuts reduce economic growth in the short term”. We believe that fiscal consolidation measures have reduced economic growth over the past couple of years.”
It is worth noting that since the Conservative Lib Dem government first budget in June 2010 the countrys GDP has fallen by 6%, this due to the governments policy.
Some economists have argued the OBR underestimated the negative impact of the cuts, particularly its cuts to infrastructure spending, which has been slashed by 40 per cent over the past two years. Senior economists from the International Monetary Fund argue that many forecasters – including itself – misjudged the size of these so-called “fiscal multipliers” three years ago
We can only hope that David Cameron MP is spinning his own policy, if he actually believes that raising taxes, cutting spending and allowing inflation through a devalued currency will not adversly affect growth then we are really in trouble.
Thursday, 7 March 2013
I never fancied TINA
The Prime minister has once again said There Is No Alternative (TINA) to the Conservative Liberal Democrat government economic handling of the country.
I have never fancied TINA, she is pretty deaf, turns a blind eye and does do what she says she will do.
Vince Cable today called for government investment in housing and infrastructure projects to allow the country to take advantage of any future recovery in our economy, the Prime minister says there is no "magic money tree", yet he like TINA forgets he will now borrow £212 Billion more than he said and more than Labour proposed to do.
Mr Cameron forgets that the reason for the downgrade from AAA was lack of growth in our economy and Moodys could not see how the country was going to generate income to pay down the deficit.
This judgement is stating the obvious, this week we have seen manufacturing in recession and construction continuing to struggle, there has to be an alternative to this.
The Prime minister sent his Chancellor to Europe to stop bank bonuses, the same institutions who played roulette with our economies, there has to be an alternative to this.
This week the parliamentary ending of the Agricultural wages Board (AWB) was debated, this giving agricultural workers minimum standards of pay and conditions, these workers earn between £14 and 18,000 a year, the AWB has been an effective mechanism for collective bargaining since 1948, has ensured the good industrial relations vital in an industry where employer and employee work side by side.
Like the Beecroft espisode this government tries to reduce workers rights, makes employment less secure, this cocktail leads to insecurity and less wages and this leads to low growth, there has to be an alternative to this.
TINA is not attractive, stagflation, high cost of living and falling income is not a policy of deficit reduction, a policy that does not engender hope or confidence, either in businesses or ordinary people, if there is no alternative to this, then please Mr Cameron exit stage left.
I have never fancied TINA, she is pretty deaf, turns a blind eye and does do what she says she will do.
Vince Cable today called for government investment in housing and infrastructure projects to allow the country to take advantage of any future recovery in our economy, the Prime minister says there is no "magic money tree", yet he like TINA forgets he will now borrow £212 Billion more than he said and more than Labour proposed to do.
Mr Cameron forgets that the reason for the downgrade from AAA was lack of growth in our economy and Moodys could not see how the country was going to generate income to pay down the deficit.
This judgement is stating the obvious, this week we have seen manufacturing in recession and construction continuing to struggle, there has to be an alternative to this.
The Prime minister sent his Chancellor to Europe to stop bank bonuses, the same institutions who played roulette with our economies, there has to be an alternative to this.
This week the parliamentary ending of the Agricultural wages Board (AWB) was debated, this giving agricultural workers minimum standards of pay and conditions, these workers earn between £14 and 18,000 a year, the AWB has been an effective mechanism for collective bargaining since 1948, has ensured the good industrial relations vital in an industry where employer and employee work side by side.
Like the Beecroft espisode this government tries to reduce workers rights, makes employment less secure, this cocktail leads to insecurity and less wages and this leads to low growth, there has to be an alternative to this.
TINA is not attractive, stagflation, high cost of living and falling income is not a policy of deficit reduction, a policy that does not engender hope or confidence, either in businesses or ordinary people, if there is no alternative to this, then please Mr Cameron exit stage left.
Wednesday, 6 March 2013
The March Council
Last evening we held the March Shepton Mallet Town Council meeting.
There were some issues of interest.
Mendip Council has set up a new schemes, the local legacy fund and community environment fund, one about £250,000 and the other giving district councillors £2000 to spend on local scheme. I said that although this was nice, this does not tackle the problem of affordable housing, as this money comes from central government from a new homes dividend, i suggested that this could build a few needed homes.
The policy is wrong headed as this coupled with mendip councils failure to achieve a high percentage of affordable housing in new housing development, local people are being let down by the Conservative dominated Mendip Council.
We debated the concerns of sheptonians concerns about building on the Mid Somerset showfield, i proposed although the proposal was not taken, that the council should readopt the position of no building on the showfield and I believe any new housing development should adjoin established housing to the south of Ridgeway and to the south west of St Peters estate. the Town Council missed an opportunity to show the community that we need to defend our green spaces such as the showfield and west shepton playing fields.
A couple of good community stories, cllr Champion is organising the competition for the new Town crier. We also awarded the bell ringers £500 for new equipment.,
The Council agreed the concept plan for new paving in the Town Centre, this will essentially be new paving on the current levels, the company doing this work will now bring forward more details plans.
That's about it for the march council meeting
There were some issues of interest.
Mendip Council has set up a new schemes, the local legacy fund and community environment fund, one about £250,000 and the other giving district councillors £2000 to spend on local scheme. I said that although this was nice, this does not tackle the problem of affordable housing, as this money comes from central government from a new homes dividend, i suggested that this could build a few needed homes.
The policy is wrong headed as this coupled with mendip councils failure to achieve a high percentage of affordable housing in new housing development, local people are being let down by the Conservative dominated Mendip Council.
We debated the concerns of sheptonians concerns about building on the Mid Somerset showfield, i proposed although the proposal was not taken, that the council should readopt the position of no building on the showfield and I believe any new housing development should adjoin established housing to the south of Ridgeway and to the south west of St Peters estate. the Town Council missed an opportunity to show the community that we need to defend our green spaces such as the showfield and west shepton playing fields.
A couple of good community stories, cllr Champion is organising the competition for the new Town crier. We also awarded the bell ringers £500 for new equipment.,
The Council agreed the concept plan for new paving in the Town Centre, this will essentially be new paving on the current levels, the company doing this work will now bring forward more details plans.
That's about it for the march council meeting
Monday, 25 February 2013
The road to nowhere
The media has broken out in mass hysteria because of the loss of our AAA financial rating. Yet, I'm surprised anyone should be surprised by the decision.
The politics of the decision is more important than the economic.
Politically George Osbourne has staked his reputation on AAA status, he has claimed that his austerity policy would sustain AAA. But the economic realities of stagnant income, high inflation in food, fuel. utilities and cuts to capital projects and reductions in the public sector has been a cocktail that has delivered a double dip and on the way to a triple dip recession.
The Great Recession has seen incomes now at 2003 levels.
This is the government of nil action, banking reform put off to the next government. Businesses continue to suffer the lack finance to invest in their businesses.
Inequality continues to grow. The inequality is severely damaging the housing market, last year saw 100,000 homes built, this short of £240,000 needed.
This is hurting economically and in terms of tackling housing need.
The housing market is hamstrung, by overpriced housing, this because first time buyers cannot afford to buy, this does not allow for movement in the housing chain.
Government, central or local refuse to build housing, private landlords with high rents and high benefits are the unsustainable policy of this government.
So housing need continues to grow, the vice like grip will continue, high housing costs, high living costs, it is time for action, we need action on affordable housing.
Under Mr Osbourne we are on the road to nowhere.
The politics of the decision is more important than the economic.
Politically George Osbourne has staked his reputation on AAA status, he has claimed that his austerity policy would sustain AAA. But the economic realities of stagnant income, high inflation in food, fuel. utilities and cuts to capital projects and reductions in the public sector has been a cocktail that has delivered a double dip and on the way to a triple dip recession.
The Great Recession has seen incomes now at 2003 levels.
This is the government of nil action, banking reform put off to the next government. Businesses continue to suffer the lack finance to invest in their businesses.
Inequality continues to grow. The inequality is severely damaging the housing market, last year saw 100,000 homes built, this short of £240,000 needed.
This is hurting economically and in terms of tackling housing need.
The housing market is hamstrung, by overpriced housing, this because first time buyers cannot afford to buy, this does not allow for movement in the housing chain.
Government, central or local refuse to build housing, private landlords with high rents and high benefits are the unsustainable policy of this government.
So housing need continues to grow, the vice like grip will continue, high housing costs, high living costs, it is time for action, we need action on affordable housing.
Under Mr Osbourne we are on the road to nowhere.
Wednesday, 13 February 2013
Why it does not add up anymore
The Office of National Statistics today reported that the level of earnings had retreated to 2003 levels with 7% of people have had pay rises above their living costs since coalition
From 2010 to 2012, the decline in median real earnings averaged 2.1% per year for full-time male public sector workers in the UK compared with 3.1% per year for their private sector counterparts.
The self-employed were the worst hit of all, with a 16% drop in median real income between 2007/08 and 2010/11 for the UK
Official figures now confirm what everyone knows. Living standards have been falling for the vast majority, and there is no sign of change.
With unemployment figures being kept down by part time labour or by self employed this explains why jobseekers has not grown nor has the economy.
But on top of the wage squeeze, the government has been making it worse with cuts to tax credits, the freeze in child benefit and a VAT hike. Millions of low-income families - both in and out of work - are now threatened by the bedroom tax and the one per cent cap on benefits and the changes to council tax benefit, where everyone of working age will make a contribution. The cost of living goes ever upwards with the costs of essentials such as food, fuel, energy and rented accommodation continuing to increase.
There is a sharp contrast with the few at the top of the corporate ladder, where bonuses and huge salaries allow them to enjoy more than their fair share of the created wealth. They are now looking forward to the top-pay tax cut due in April.
With this wage disparity, with the many having pay freezes and the few milking the system, this will continue to have an impact on the wider economy.
The economy will not recover until people have money in their pockets to spend, and businesses can know that their customers feel confident. The challenge for the government is to reverse austerity and start boosting wages and incomes for the majority. That is the only route to growth.
Matthew Whittaker of the Resolution Foundation says "We now know that the squeeze on living standards will be longer and deeper than projected this time last year. Average wages are not expected to rise in real terms until late 2014 after a period of stagnation and decline. Despite stronger than expected job growth in the private sector, many people continue to work fewer hours than they would like, putting downward pressure on household incomes."
The unite union says "The challenge is how we ensure that the benefits of future growth are fairly shared."
"In the absence of wage rises, consumers must borrow to buy goods and services. If they don't borrow, they don't shop and if they don't shop, producers of goods and services shed jobs."
"Britain isn't just being squeezed, our country is going backwards under the Tory-led coalition. The nation is now characterised by falling wages, insecure employment and cuts to welfare.
Ed Balls the Shadow Chancellor says .“We have a chancellor who believes that he can slash public spending, raise VAT and cut benefits – he can take billions out of the economy and billions more out of people’s pockets, he can directly cut thousands of public sector jobs and private sector contracts, and none of this will have any impact on unemployment or growth.
Against all the evidence, both contemporary and historical, he argues the private sector will somehow rush to fill the void left by government and consumer spending, and become the driver of jobs and growth”
The Bank of England says today that Inflation will be running higher than wages this year.
The challenge for politicians is how to create increases in incomes, until the coalition invests in the infastructure, develop an industrial strategy, develop skills, investing in sciences and research and development, this country will be cut away from prosperity and human misery will grow.
From 2010 to 2012, the decline in median real earnings averaged 2.1% per year for full-time male public sector workers in the UK compared with 3.1% per year for their private sector counterparts.
The self-employed were the worst hit of all, with a 16% drop in median real income between 2007/08 and 2010/11 for the UK
Official figures now confirm what everyone knows. Living standards have been falling for the vast majority, and there is no sign of change.
With unemployment figures being kept down by part time labour or by self employed this explains why jobseekers has not grown nor has the economy.
But on top of the wage squeeze, the government has been making it worse with cuts to tax credits, the freeze in child benefit and a VAT hike. Millions of low-income families - both in and out of work - are now threatened by the bedroom tax and the one per cent cap on benefits and the changes to council tax benefit, where everyone of working age will make a contribution. The cost of living goes ever upwards with the costs of essentials such as food, fuel, energy and rented accommodation continuing to increase.
There is a sharp contrast with the few at the top of the corporate ladder, where bonuses and huge salaries allow them to enjoy more than their fair share of the created wealth. They are now looking forward to the top-pay tax cut due in April.
With this wage disparity, with the many having pay freezes and the few milking the system, this will continue to have an impact on the wider economy.
The economy will not recover until people have money in their pockets to spend, and businesses can know that their customers feel confident. The challenge for the government is to reverse austerity and start boosting wages and incomes for the majority. That is the only route to growth.
Matthew Whittaker of the Resolution Foundation says "We now know that the squeeze on living standards will be longer and deeper than projected this time last year. Average wages are not expected to rise in real terms until late 2014 after a period of stagnation and decline. Despite stronger than expected job growth in the private sector, many people continue to work fewer hours than they would like, putting downward pressure on household incomes."
The unite union says "The challenge is how we ensure that the benefits of future growth are fairly shared."
"In the absence of wage rises, consumers must borrow to buy goods and services. If they don't borrow, they don't shop and if they don't shop, producers of goods and services shed jobs."
"Britain isn't just being squeezed, our country is going backwards under the Tory-led coalition. The nation is now characterised by falling wages, insecure employment and cuts to welfare.
Ed Balls the Shadow Chancellor says .“We have a chancellor who believes that he can slash public spending, raise VAT and cut benefits – he can take billions out of the economy and billions more out of people’s pockets, he can directly cut thousands of public sector jobs and private sector contracts, and none of this will have any impact on unemployment or growth.
Against all the evidence, both contemporary and historical, he argues the private sector will somehow rush to fill the void left by government and consumer spending, and become the driver of jobs and growth”
The Bank of England says today that Inflation will be running higher than wages this year.
The challenge for politicians is how to create increases in incomes, until the coalition invests in the infastructure, develop an industrial strategy, develop skills, investing in sciences and research and development, this country will be cut away from prosperity and human misery will grow.
Wednesday, 6 February 2013
Unfair and the second coming of Poll Tax
So the Conservatives with the lib Dem poodles are launching their next phase of punishing low paid people.
Poll Tax 2 is landing on many low paid people of working age door mats, in Mendip, will pay a minimum 20% of the Council Tax with the former exempt, will now pay a minimum £4 a week.
This on top of housing benefit changes and the 1% in work benefit rises amounting to a real terms cut in living standards.
I am pleased that the government has dropped the "we are all in this together" line, frankly it would be a sick joke if they continued. In the new tax year, millionaires will get a £40,000 tax cut, people who need it the less.
The Conservatives and Lib Dems have a perverse mentality, the millionaires need the tax cut because they will either avoid paying the 50% tax or it is a disincentive, yet for really low paid people need to be incentivesed by taking money away from this. This perversity must be taught in Eton.
Sadly the cover for these attacks are the basic attack on the scroungers, the retoric clearly resinates with some but the truth is the largest gainers from the welfare budget are pensioners and this group is exempt from cuts, 60% of those whom claim welfare support are in work, so the picture is painted to appeal to base elements in people.
The only way to attack poverty is creating jobs, well paid jobs, yet today we see finance to business fell by £18.6 billion in the last year, so businesses will not retool and businesses will not grow, this government have completely failed in getting banks to lend for business growth and in turn new jobs in new industries, whilst we stagnate, Germany and the USA grow.
This government are punishing the low paid, failing to create the opportunity for business to grow, they are also failing to reduce the deficit as fast as they said with £64 billion more borrowed by the general election.
The priority of government must be creating a productive economy.
If they want to attack the dodgers, lets tackle tax evasion it costs the economy more than benefit fraud. We need a government for the millions not just the millionaires.
Poll Tax 2 is landing on many low paid people of working age door mats, in Mendip, will pay a minimum 20% of the Council Tax with the former exempt, will now pay a minimum £4 a week.
This on top of housing benefit changes and the 1% in work benefit rises amounting to a real terms cut in living standards.
I am pleased that the government has dropped the "we are all in this together" line, frankly it would be a sick joke if they continued. In the new tax year, millionaires will get a £40,000 tax cut, people who need it the less.
The Conservatives and Lib Dems have a perverse mentality, the millionaires need the tax cut because they will either avoid paying the 50% tax or it is a disincentive, yet for really low paid people need to be incentivesed by taking money away from this. This perversity must be taught in Eton.
Sadly the cover for these attacks are the basic attack on the scroungers, the retoric clearly resinates with some but the truth is the largest gainers from the welfare budget are pensioners and this group is exempt from cuts, 60% of those whom claim welfare support are in work, so the picture is painted to appeal to base elements in people.
The only way to attack poverty is creating jobs, well paid jobs, yet today we see finance to business fell by £18.6 billion in the last year, so businesses will not retool and businesses will not grow, this government have completely failed in getting banks to lend for business growth and in turn new jobs in new industries, whilst we stagnate, Germany and the USA grow.
This government are punishing the low paid, failing to create the opportunity for business to grow, they are also failing to reduce the deficit as fast as they said with £64 billion more borrowed by the general election.
The priority of government must be creating a productive economy.
If they want to attack the dodgers, lets tackle tax evasion it costs the economy more than benefit fraud. We need a government for the millions not just the millionaires.
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