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The Tories’ £12bn of welfare cuts could come back to haunt them

Now they can get on with the really nasty stuff unopposed I guess.

Powered by Guardian.co.ukThis article titled “The Tories’ £12bn of welfare cuts could come back to haunt them” was written by Patrick Butler, for theguardian.com on Friday 8th May 2015 13.08 UTC

By the autumn we will find out how the Tories will make welfare cuts of £12bn a year by 2018. If they go ahead – and there are difficult political choices to be made here – these cuts will amount to one of the defining social policy decisions of the next five years.

The Tories were curiously loathe to explain how they would make these cuts during the election campaign. Either they knew, but were not telling because the truth would scare voters; or they didn’t know, but it didn’t matter because this was only ever a coalition bargaining chip to trade with the Lib Dems.

Ironically, a Conservative majority government may now find itself having to take unpopular choices it perhaps never really expected to have to make.

As we know from this week’s leaked Whitehall documents, when it comes to cuts there is no longer any “low-hanging fruit”. What’s left are in large part harsh cuts hitting middle-income working families: or, as the Institute for Fiscal Studies politely puts it, the “less palatable options”.

What we do know is that the Tories will freeze the level of working-age benefits for two years from next April, disqualify most 18- to 21-year-olds from claiming housing benefit, and reduce the household benefit cap from £26,000 to £23,000. Those three policies, the IFS calculates, will find the Tories about £1.5bn a year.

So where will the remaining £10.5bn come from?

The Tory line throughout the campaign has been: trust us on our track record. We made the cuts before, and we’ll make them again. The coalition did indeed make about £18bn of welfare cuts over the last parliament – but importantly, in view of what they need to achieve over the next five years, very little in the way of savings.

The bulk of the cuts – roughly two thirds – came from below-inflation uprating of benefits; the rest from restricting child benefit for wealthier families and some cuts to child tax credit. The cuts made here were more or less cancelled out by massive overspending on disability benefits and housing benefit.

According to social researcher Declan Gaffney, the net savings from five years of supposed welfare “revolution”, measured against the savings expected in 2010, were about £2bn. Contrary to Tory rhetoric, the coalition track record on finding welfare savings was dismal.

To reach £12bn by 2018, the Tories will not only have to massively increase the pace of welfare cuts made over the past five years, but achieve net savings. They will have to focus on the five big ticket items: tax credits (currently about £30bn a year); housing benefit (£21bn); disability living allowance and personal independence payments (£15bn); incapacity benefits (£14bn); and child benefit (£12bn).

One key area will be incapacity benefit spending. Previous attempts to cut this failed (spending rose at least £3bn above anticipated levels under the coalition): the high number of successful appeals against the notoriously unpopular fit-for-work tests revealed that there were simply not, as the coalition passionately believed, millions of people fraudulently claiming the benefit.

The Department for Work and Pensions believes there is scope for reform, however, and we can expect more drastic measures to try to reduce the numbers claiming employment and support allowance, by moving as many as possible on to the less-well remunerated jobseeker’s allowance.

This will be controversial, and Whitehall has concerns over the ability of the outsourced service (formerly run by Atos, now Maximus) to do this. Savings here will be painful, in human terms, and are far from guaranteed.

Housing benefit will be another target area, but the anticipated increase in spending (up £3bn a year from 2020) will be difficult to reverse given the growth in working households on low or static incomes forced to draw on housing support to meet high rents, particularly in London and the south.

Tax credits and child benefit cuts would appear to be necessary but they will take hundreds if not thousands of pounds a year out of the pockets of many of the middle-England voters that delivered David Cameron the premiership. Cuts to smaller budget items, such as carer’s allowance and statutory maternity pay may deliver marginal savings but at the cost of alienating the same demographic.

The Conservatives will look to a relatively buoyant employment market to reduce spending on unemployment benefit. But this relatively small budget line will do nothing to get them close to the £12bn target. Universal credit will be heralded as a technological fix to benefits spending by increasing the incentives for people on a range of in- and out-of-work benefits to come off the dole or work more hours. But the troubled programme is way off schedule (it may not be working fully until 2017 at the earliest) and there is no hard evidence it will deliver savings.

There will be much emphasis on so-called behavioural change policies, even though they will deliver barely any savings (and may not work even on their own terms). The benefit cap will continue, and there will be the threat of benefit sanctions for alcohol or drug addicted,​ mentally ill, or obese claimants who refuse treatment programmes.

The decision for​ the Tories is how many of these cuts they want to deliver and what the political costs of this will be. There is no coalition partner to blame if they don’t offer up £12bn; but if they take their foot off the welfare cuts pedal the imperatives of ​​deficit reduction mean savings will have to be found from other departmental budgets.

Cameron spoke this morning of a “one nation” Toryism but he will know his £12bn of cuts will disproportionately hit the poor, young sick and​ disabled. The cuts will deliver more pain, fear and instability to those they affect. We can expect a rise in child poverty, a further decline in living standards for all but the most well-off, and more stupendous rises in productivity in the food bank sector.

A majority gives the Tories a mandate to begin seriously dismantling the welfare state, but Cameron – if not all of his party – will know this carries a political cost. Deliver social security cuts on this scale and many of those who voted for him yesterday may be surprised to find that it is they, and not the mythical scroungers and shirkers of Tory demagoguery, who will lose out.

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Meet the invisibles – the wealthy and powerful at the heart of the Tory party

These are the people that assume that my life and others like me is worthless. I am getting a bit rusty and creaking due to the passage of time. There is not much I can say or do about anything that will have an effect,  but when people are pushed to extremes, something snaps in the end. People still believe the lie that hanging on their coat tales will somehow lift us out of the myre. The notion that people can work hard to improve their lot in life is shown to be in most cases a fallacy. Its very difficult to make money if you don’t have it it in the first place. Its more profitable even now for banks to asset strip companies rather than support small business. The so called growth is very little to do with any real productivity and far to many people are classed as employed statistically when they are on zero hours contracts or on part-time minimum wage jobs fighting to survive with in work benefits.

Understand the simple truth about the nature of these people, they wouldn’t piss on you if your were on fire.

If you are going to vote then think  about what you want the UK to look like in future.

We have become accustomed to the most extreme inequality. Its doesn’t have to be like that. Yet we still put up with it. 


Powered by Guardian.co.ukThis article titled “Meet the invisibles – the wealthy and powerful at the heart of the Tory party” was written by Polly Toynbee, for The Guardian on Tuesday 5th May 2015 05.00 UTC

It’s a networking event in one of the City’s great glass towers. The room is filled mostly with company directors, hedge funders, bankers and lawyers. Would they vote Labour? “An unmitigated disaster. You can’t be serious? Have you any idea what would happen? Half the clients of people in this room would be off, gone, anyone who can.”

The editor of Spears Wealth Management Magazine has kindly brought me with him to breathe in the thin air of the upper stratosphere. In the election I have travelled everywhere from Glasgow to the Isle of Wight, Bristol to Ely, Somerset to Gateshead, Chipping Norton to Wakefield, talking to people of all politics and none. But these are the invisibles, the echelons of money and power not seen on Newsnight or Question Time, who never apologise, never explain.

Their world is the beating heart of the modern Tory party, its financial backers, its influencers who whisper to David Cameron’s people in private gatherings, country suppers and the secret salons of Westminster restaurants; the world where Lord Chadlington, lobbying supremo, chats over the stone wall between his estate and Cameron’s in Witney. Murmuring what? We never know. Cameras pry into benefits street but none invade this private life of the nation.

I had forgotten that frank look of baffled incredulity. No one they meet votes Labour. “You mean just as we are repairing the frightful damage done by Labour, you want to put them back in? Good God!” “What, piss it all up the wall again? Pardon my French – but you want all those people back on welfare?” “I don’t think you realise what this government’s done to get the country back on its feet – and you want to give it back to the people who bankrupted us?”

The one non-Tory I met was an older banker from an ancient firm: “I’m a Christian. I’m appalled at migrants being left to drown in the Mediterranean.” Those nearby looked on him politely as an eccentric. A venture capitalist investing in start-ups shook his head: “The non-doms, they’ll go. Mansion tax, tax rates at 50%? Labour want to drive out wealth creators, don’t they?”

Would he go? Well no, but all the mobile global high net worths would be off like a flock of migratory birds. Look, the top London property market is already frozen, waiting for Thursday.

“You do realise,” said a woman on several boards, “it’s us middle classes who are the motor of the economy? Government has nothing if we don’t generate wealth for them to spend – spending it on people who create nothing.” (Middle class is a term of art, easier on the ear than plutocrat.) “Government wastes and wastes,” said a boardroom man. “Philanthropy does it so much better. Tax us less we’ll see that money well spent.”

We all live in our own silos – Guardian readers too. To understand the Cameron world, hear this drumbeat in their ears, their native noise. Forget the phoney “march of the makers”, the hard hats and hi-vis jackets of electioneering: when they leave politics, Tories return to this natural habitat.

English Conservatism’s rip-tide undercurrents break surface in the daily front-page vilification of Labour. The nation’s loudspeakers are an 85% rightwing press, owned by non-UK tax payers. Disappointingly, but no surprise, even the Financial Times with its City clientele calls for a Conservative win. Despite editorials regularly lambasting Cameron’s Euroscepticism, despite its chief commentator Martin Wolf’s devastating critiques of austerianism, it has reverted to its market. Its election editorial, “The compelling case for continuity”, is the authentic voice of unreasoning Conservatism, where being Tory is as natural as the English weather and Labour is always the interloping upsetter of apple carts.

Yet Cameron has run the most radical government of our lifetime – cutting the state, sweeping away support for the weak, denuding local government, gifting millions to their folk to set up free schools, selling the NHS to private firms, privatising Royal Mail, tripling fees to make universities effectively private, replacing a million lost public jobs with pre-unionised lump labour.

All this state-stripping turmoil is disguised as sober “continuity” Conservatism. Broadcasters in their questioning too are swayed by this sense that Toryism is the norm and everything else insurgent. Just wait for a foghorn blast against an “illegitimate” Labour government if a Cameron coalition fails to collect enough Commons votes – though convention is with whoever has a Commons majority.

Labour’s aim is to restore the postwar, pre-Thatcher consensus – an adequate welfare state, more housebuilding, decent work and a robust NHS, taxing the rich more fairly. That makes economic as well as social sense: on the same page as that FT leader, Wolf points out how inequality has risen since the late 1970s, calling Cameron’s regressive taxes “worrying”.

The theme of the Davos world economic forum was the danger of growing inequality, while the Bank of England governor, Mark Carney, says inequality is the greatest threat to growth. Yet, says the FT leader, “the fundamental weakness in Labour’s plans” is that “Mr Miliband is preoccupied with inequality”. He’s not alone.

Modest measures “restoring the 50p level for high earners and imposing an ill-conceived mansion tax” outweigh everything else – even the “seismic” danger of Cameron taking the UK out of the EU, putting the “integrity of the UK at stake”. Few have been more eloquent than FT writers about the need to stay in the EU. Yet when the chips are down, antagonism to taxing the rich comes before the future of Britain.

Greed, selfishness, unimpeded inheritance, privilege cemented down the generations, cutting benefits while giving more to the wealthy – those are the Conservative passions. The FT praises Cameron for having the “political courage” to “shrink the state”, but look how their How to Spend It magazine in this same election week suggests squandering all that wealth. Forget public services when you can spend £1,250 on a bottle of A Goodnight Kiss perfume or £10,100 on a tulle shirt dress. Has the £10,540 per person “ultimate Nepal” by helicopter, plus private audience with the king, been disrupted at all by the earthquake?

Try taking City denizens to food banks and nothing changes their mind. “Let them eat lentils, why don’t they retrain, where’s their get-up-and-go?” Most of us are entrenched. I could no more vote Tory than they could back Labour. I think them boorishly selfish, they think me delusionally ignorant of their “real world”. The country is profoundly split between a tribe of revolutionary state-breakers and preservers of the public realm. A hung result doesn’t make Britain undecided, but divided by a chasm between the reds and the blues.

• Polly Toynbee is a panellist at Guardian Live: Election results special on Friday 8 May at 6pm in Kings Place. For full details and to book tickets, see here

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The Guardian view: Britain needs a new direction, Britain needs Labour

Fingers crossed that we can move forward. 


Powered by Guardian.co.ukThis article titled “The Guardian view: Britain needs a new direction, Britain needs Labour” was written by Editorial, for The Guardian on Friday 1st May 2015 12.15 UTC

The campaign is nearly over and it is time to choose. We believe Britain needs a new direction. At home, the economic recovery is only fragile, while social cohesion is threatened by the unequal impact of the financial crisis and the continuing attempt to shrink the postwar state. Abroad, Britain remains traumatised by its wars, and, like our neighbours, is spooked by Vladimir Putin, the rise of jihadist terrorism and by mounting migratory pressures. In parts of Britain, nationalist and religious identities are threatening older solidarities, while privacy and freedom sometimes feel under siege, even as we mark 800 years since Magna Carta. More people in Britain are leading longer, healthier and more satisfying lives than ever before – yet too many of those lives feel stressed in ways to which politics struggles to respond, much less to shape.

This is the context in which we must judge the record of the outgoing coalition and the choices on offer to voters on 7 May. Five years ago, Labour was exhausted and conflicted, amid disenchantment over war, recession and Gordon Brown’s leadership. The country was ready for a change, one we hoped would see a greatly strengthened Liberal Democrat presence in parliament combine with the core Labour tradition to reform politics after the expenses scandal. That did not happen. Instead the Conservatives and the Liberal Democrats have governed together for five difficult years.

That experiment has clearly run its course. The outgoing government proved that coalitions can function, which is important, and it can be proud of its achievements on equal marriage and foreign aid. But its record, as our recent series of editorials on detailed themes has shown, is dominated by an initial decision to pursue a needless and disastrous fiscal rigidity. That turned into a moral failure, by insisting on making the neediest and the least secure pay the highest price for an economic and financial crash that they did not cause. The evidence is there in the one million annual visits to foodbanks, a shocking figure in what is, still, a wealthy country.

David Cameron has been an increasingly weak prime minister. On issues such as Europe, the integrity of the United Kingdom, climate change, human rights and the spread of the low-wage economy, he has been content to lead the Tories back towards their nastiest and most Thatcherite comfort zones. All this is particularly disappointing after the promise of change that Mr Cameron once embodied.

The union at risk

The Conservative campaign has redoubled all this. Economically, the party offers more of the same, prioritising public-sector austerity which will worsen life for the most needy – imposing £12bn of largely unspecified welfare cuts – while doing little to ensure the rich and comfortable pay a fair share. Internationally, the party is set on a referendum over Europe which many of its activists hope will end in UK withdrawal. It’s also set on an isolationist abandonment of British commitment to international human rights conventions and norms, outcomes which this newspaper – unlike most others – will always do all in its power to oppose. At the same time, the Tories go out of their way to alienate Scotland and put the UK at risk. The two are related: if a 2017 referendum did result in a British exit from the EU, it could trigger a fresh and powerful demand for a Scottish exit from the UK. The Conservative campaign has been one of the tawdriest in decades.

The overriding priority on 7 May is therefore, first, to stop the Conservatives from returning to government and, second, to put a viable alternative in their place. For many decades, this newspaper’s guiding star has been the formulation offered by John Maynard Keynes in a speech in Manchester in 1926: “The political problem of mankind is to combine three things: economic efficiency, social justice and individual liberty.” The task on 7 May is to elect the parliament and government that will come closest to passing Keynes’s triple test.

Some despair of the whole system, believing a model created for two-party politics is now exhausted, failing to give adequate expression to the diverse society we have become. We are hardly newcomers to that view: we have demanded electoral reform for a century and believe that demand will find new vigour on 8 May. But for now, this is the voting system we’ve got. How should we use it?

To the charge that they enabled a government whose record we reject, the Liberal Democrats would plead that they made a difference, mitigating and blocking on issues such as Europe, the environment, child benefit and human rights, without which things would have been worse. That adds weight to the view that the next Commons would be enhanced by the presence of Lib Dem MPs to insist on the political reform and civil liberties agendas – as they did, almost alone, over Edward Snowden’s revelations. Similarly, it would be good to hear Green voices in Westminster to press further on climate change and sustainability. Where the real constituency choice is between these parties and the Conservatives, as it is between the Lib Dems and the Tories in the south-west, we support a vote for them. But they are not the answer.

In Scotland, politics is going through a cultural revolution. The energy and engagement on show are formidable – and welcome. The level of registration is an example to the rest of Britain. If the polls are right, and the SNP is returned as Scotland’s majority party, we must respect that choice – and would expect all parties that believe in the union, and the equal legitimacy of all its citizens, to do the same. We do that even as we maintain our view that, whatever myriad problems the peoples of these islands face, the solution is not nationalism. Breaking apart is not the answer: not in Europe and not in the UK. We still believe that the union rests on something precious – the social and economic solidarity of four distinct nations – and that is to be nurtured and strengthened, not turned against itself.

A sense of what is just

Which brings us to Labour. There have been times when a Labour vote has been, at best, a pragmatic choice – something to be undertaken without enthusiasm. This is not such a time. Of course there are misgivings. The party has some bad instincts – on civil liberties, penal policy and on Trident, about which it is too inflexible. Questions linger over Ed Miliband’s leadership, and whether he has that elusive quality that inspires others to follow.

But Mr Miliband has grown in this campaign. He may not have stardust or TV-ready charisma, but those are qualities that can be overvalued. He has resilience and, above all, a strong sense of what is just. Mr Miliband understood early one of the central questions of the age: inequality. While most Tories shrug at that yawning gap between rich and poor, Labour will at least strive to slow and even reverse the three-decade march towards an obscenely unequal society. It is Labour that speaks with more urgency than its rivals on social justice, standing up to predatory capitalism, on investment for growth, on reforming and strengthening the public realm, Britain’s place in Europe and international development – and which has a record in government that it can be more proud of than it sometimes lets on.

In each area, Labour could go further and be bolder. But the contrast between them and the Conservatives is sharp. While Labour would repeal the bedroom tax, the Tories are set on those £12bn of cuts to social security, cuts that will have a concrete and painful impact on real lives. Even if they don’t affect you, they will affect your disabled neighbour, reliant on a vital service that suddenly gets slashed, or the woman down the street, already working an exhausting double shift and still not able to feed her children without the help of benefits that are about to be squeezed yet further. For those people, and for many others, a Labour government can make a very big difference.

This newspaper has never been a cheerleader for the Labour party. We are not now. But our view is clear. Labour provides the best hope for starting to tackle the turbulent issues facing us. On 7 May, as this country makes a profound decision about its future, we hope Britain turns to Labour.

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