DOING THE POOR IN CORNWALL…

…and others and elsewhere

The other day I wrote about the slow erosion of the minimum wage which for a dozen years has helped those at the bottom of the pay pile. The wage has been “the slow-foot hope of the poor”. As the budget provisions come into force there is more bad news for the vulnerable here.

Yes, any budget is complex with winners and losers and contending interpretations. In the 2012 budget there are very small tax reductions for a lot of taxpayers, but I think these are outmatched by significant losses for some poor, low-paid, and very modestly paid groups. For example, today the Tory Libdem government’s destructive change to working tax credits comes into force. A couple with children on less than about £17 000 a year at present can get the credit as a top up to their wages for working at least 16 hours a week. From today those qualifying hours are raised to 24: between them they must work 24 with one working at least 16 or one must work 24. There is a recession, jobs are hard to find, the opportunities for increasing hours extremely limited. If they fail the new hours test, the family will lose all the working tax credit, up to £74 a week. There are estimated to be around
200 000 couples affected by this change nationally and pro-rata that is nearly two thousand in Cornwall. These are working people and their families; they should be encouraged not find their lives made more difficult by deliberate government decision.

At the same time research by the Institute for Fiscal Studies (IFS) for the Labour party shows that a typical family will lose £511 a year due to 2012 Tory Libdem budget changes in taxes and benefits: this takes into account the vaunted increase in the income tax threshold. In April 2014 pensioners will be £315 a year worse off as the granny tax bites.

Here then are the fruits of Tories and Libdems working together to take from the poor and low paid. Cue overpaid politicians earnestly telling us how it pains them to have to take hard decisions to reduce lesser paid people’s income.

Do not expect the Conservatives or Libdems to mention these cuts.

ADDENDA

Read here why the government’s tax threshold change amounts to only 81p a week after accounting for the default inflation rise. (7 April 2012)

A survey by the Guardian shows that many jobs are not giving enough hours for people to meet the new qualifying hours rule for working tax benefits. This new rule is either serious incompetence by the Tory Libdem government or a callous policy change; it should be righted. (8 April 2012)

NOTE
“the slow-foot hope of the poor”: Robert TRESSELL Ragged trousered philanthropists chapter 45

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LIBDEMS SHRINK IN CORNWALL

A recent survey for Conservatives of opinion in some marginal constituencies, including two in Cornwall, has thrown up a mean average swing of three percent from Liberal Democrats to Conservatives in seats held by the latter where the Libdems are second in votes.

The two Cornwall seats are Camborne-and-Redruth and Truro-and-Falmouth. The results for these two seats are not given separately in the public scores but, assuming they fit the pattern, this means that the Tories should win them comfortably next time. However, bear in mind the next election is not due until 2015 and that’s a long way off.

Electoral calculus has the Tories winning these two even more clearly. In fact it shows them winning all the Cornwall seats. Of course we are likely to have new boundaries in 2015.

It will be interesting to compare these 2011 findings with the actual results of the next general election.

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ANOTHER PROMISE BITES THE DUST

Tomorrow, Wednesday 19 January 2011, the Commons will debate a Labour motion supporting the educational maintenance allowance (EMA) for sixteen to eighteen year old students in further education in England, including more than 7000 in Cornwall.

EMAs, which cost around £560 million a year, are part of departmental spending so do not require a Commons vote to abolish or keep them.

Let’s have a quiz about this. Nothing too taxing, just two simple questions linked to tomorrow’s EMA debate. Clue, the pantomime season being over, nothing about the Libdems this time.

1 Who said: “We’ve looked at Educational Maintenance Allowances and we haven’t announced any plan to get rid of them…no, we don’t have any plans to get rid of them. I said we don’t have any plans to get rid of them…”

2 What actually happened?

Scroll down for the answers
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ANSWERS
1 David Cameron, January 2009
2 His Tory Libdem government announced in October 2010 that it is abolishing the EMA
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2010 GENERAL ELECTION CANDIDATES IN CORNWALL

These are the candidates for the six Cornwall seats in the 6 May 2010 general election

CAMBORNE AND REDRUTH
Conservative George Eustice, Green Euan McPhee, Labour Jude Robinson, Liberal Democrat Julia Goldsworthy MP, Mebyon Kernow Loveday Jenkin, Socialist Labour Robert Hawkins, UKIP Derek Elliot

NORTH CORNWALL
Conservative Sian Flynn, Labour Janet Hulme, Liberal Democrat Dan Rogerson MP, Mebyon Kernow Joanie Willett, UKIP Miriel O’Connor

SAINT AUSTELL AND NEWQUAY
BNP James Fitton, Conservative Caroline Righton, Labour Lee Jameson, Liberal Democrat Stephen Gilbert, Mebyon Kernow Dick Cole, UKIP Clive Medway

SAINT IVES AND ISLES OF SCILLY
Conservative Derek Thomas, Cornish Democrats Jonathan Rogers, Green Tim Andrewes, Labour Philippa Latimer, Liberal Democrat Andrew George MP, Mebyon Kernow Simon Reed, UKIP Mick Faulkner

SOUTHEAST CORNWALL
Conservative Sheryll Murray, Green Roger Creagh-Osborne, Labour Michael Sparling, Liberal Democrat Karen Gillard, Mebyon Kernow Roger Holmes, UKIP Stephanie McWilliam

TRURO AND FALMOUTH
Conservative Sarah Newton, Green Ian Wright, Labour Charlotte Mackenzie, Liberal Democrat Terrye Teverson, Mebyon Kernow Loic Rich, UKIP Harry Blakeley

Related post

Unitary and EU election candidates in Cornwall

Cornwall election results 2009

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LOOKING-GLASS ECONOMICS

Another Cornish mystery.

I’ve just had a leaflet from the national Conservative party. It says: “Freezing council tax. Conservatives will work with local councils to freeze council tax for two years, by reducing wasteful spending” (People Talk leaflet page 2).

Now look at the budget plans of Conservative/Independent Cornwall Council. This coming year, 2010/11, council tax will go up by 2.9 percent. For the next three years after that there are indicative percentage rises of 2.5, 2.25, and 2.0 (page 20 of agenda item 6 of the Corporate Business Plan, Forward Budget for Cornwall Council Cabinet meeting 25 January 2010).

A council tax freeze and rises in council tax, standing still and going up. It’s alchemy, it’s magic, it’s Tory looking-glass economics.
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Alice laughed. “There’s no use trying,” she said, “one can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”
Lewis CARROLL Through the looking glass, chapter 5, Alice and the White Queen

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THE MIRROR CRACK’D

Spoof Tory posters

And more spoof Tory posters here based on their death tax piffle; and here on the theme of I’ve never voted Tory before but…

And now spoof Labour posters

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The mirror crack’d: Alfred Tennyson The lady of Shalott

VOTE TORY TODAY, CRY TOMORROW

Tory ideas on localising benefits will punish people in Cornwall

Last September I wrote on Conservative ideas about localising benefits which for Cornwall looked to mean lower benefits than elsewhere.

Now comes a variation or addition to that story. This time the report is that the Conservatives may give local councils the power to set lower benefits where jobs are easier to find. A council would have the power to set the level of job seekers allowance, for example, in its area.

Is this merely relating benefit rates to local labour markets? Hmm. Philip Hammond, the Tory shadow chief secretary to the treasury, said there were “huge potential savings” to be made. We lack details but that has to mean in some areas lower benefit payment than a uniform, national standard would set or a reduction in the number of benefit recipients, or indeed both, as well as infrastructural improvements.

Taken together the Observer and Guardian reports suggest that the Conservatives appear to be seriously thinking about the localisation of some benefits, administered by councils not central government, and matching them to the local availability of jobs and local living costs; and I think local wage levels too would inevitably be included in the matching criteria. What would the abandonment of uniform, national levels of benefit payments mean for Cornwall? We might escape the ‘easier to find work’ criterion but certainly local wages and probably living costs would mean lower benefit payments here than in many other areas. It is unclear to me whether it would mean lower benefits than now, an absolute cut, or a lower rate of future benefit increases. The result either way would be in effect a reduced income for many people in Cornwall, a falling below national standards.

It isn’t just benefits. The localisation of benefits and the consequent saving of money may encourage the localisation of public service pay. In Cornwall we should then see pay in education and healthcare, for example, matched to local circumstances, local wage rates, rather than set nationally. The mandatory, national minimum wage also looks vulnerable to Conservative ideas: see this post.

We may not have before the general election the details of what the Conservatives plan for the localisation of benefits, indeed they are still exploring the topic, but the direction of their thinking is very clear. Many people in Cornwall stand to lose out.

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N. CORNWALL TORIES SHOW US THE FUTURE: UPDATED

UPDATE 20 September 2009

I congratulated the Tories in North Cornwall on their open selection of parliamentary candidates a couple of years ago — the original post is below.

Now read this in today’s Bedfordshire on Sunday.

Nothing’s simple, is it? In 2007 I thought open selections were an expansive democratic idea. I still do. It would be reasonable to exclude members of other parties from the open selection meetings, if practical, though I don’t think that would solve this Tory dispute. Is this a one-off or a harbinger?

ORIGINAL POST 3 July 2007

Conservatives in the North Cornwall constituency have chosen an “open primary” meeting as the way to select their prospective parliamentary candidate. See here.

Three candidates have been selected by the usual party method and from these the parliamentary candidate will be chosen. As I understand it, any voter, whatever their own politics, in North Cornwall can pre-register with the North Cornwall Conservatives and then go to the meeting on 9 July and vote for their preferred Conservative candidate.

This open primary method potentially involves a wider public than just Tory party members and participation, or the possibility of it, may well encourage them to vote in a general election for the Conservative. Of course, people who do not support the Conservatives can presumably attend the meeting and vote for the candidate they think most likely to lose in a general election or the candidate nearest to their own non-Tory views. However, all the candidates are pre-selected by the party so there is a safety net for the party.

This open primary meeting, common in America, is a bold step by the Conservatives. They are pushing the frontiers of democracy forward and making the routine, closed methods of selection by other parties (and other Conservative parties) look old-hat and unacceptably exclusionary. It will be interesting to see how this works out and how many people who are not members attend but I, an enemy of Conservatism, admire their radicalism here and wish them well with their open primary meeting. They are, I hope, showing us the future of selection meetings.

At this point I should also say I think Gordon Brown’s reaching out to those outside the Labour party is a welcome inclusionary step. Democracy is growing up.

TORIES EYE BENEFITS AND WAGES IN CORNWALL

The Conservatives are looking at plans to localise benefits: local councils would be given the power to set the benefit levels in their areas and the present uniform payments throughout Britain would be abandoned. The story is in today’s Observer, Tories plan to let benefit levels be set by local councils.

Many people in Cornwall gain from national standards in wages and benefits. The levels of wages for people in the public services here, like nurses and teachers, are set by national standards and comparisons not local ones. For example, Cornwall local wages are not used as comparators to decide what to pay a teacher here. Benefit levels are also set nationally and do not, with exceptions for rent for example, refer to local living costs. The Tory localising ideas would have a marked effect on the rates of benefits paid to people in Cornwall where average wages and the general cost of living are lower than in, for example, London and the south of England. Benefit levels in Cornwall would be stifled — fall or be frozen or increase at a lower rate than elsewhere, the last probably being the more likely — to align them with the different living costs here.

Would it just be benefits a Conservative government would localise? I pointed out in this post that the national minimum wage might be a target for Tory cuts: localisation would be a way for a Conservative government to stifle it, to freeze it or hold back its present progressive increases, in places like Cornwall. Once the localisation of benefits is established, the Tories might indeed come to see localism as a rational way of reducing costs and acknowledging varying local circumstances in other spheres, especially in public service pay: for example, localising nurses’ pay — in Cornwall lower levels than in London and the south of England because comparator pay and living costs are lower — is a way of tackling the costs of the NHS.

Local variations in benefits and public sector pay (and the minimum wage) might seem reasonable. After all, local living costs do vary and market pay varies. However, the Tory ideas appear not to be about topping up mandatory national payments in areas of high living costs. In practice councils of all parties would most likely seize the localising of payments as an opportunity to cut back costs and perhaps reduce or stabilise council tax. David Cameron has said a Conservative government would wish to give councils a general power of competence: it will thus be difficult to prevent the essentially arbitrary stifling of benefits or pay, a stifling with only a tenuous link to local living costs. We shall also have a contentious post code lottery, especially noticeable outside Cornwall in large urban areas where neighbours will have different levels of benefit payment and, although doing the same job, different pay. Indeed, we might have differences within Cornwall as local living costs, especially housing costs, vary within the county. I discussed these issues two years ago in this post.

Cornishing benefits, public sector pay, and the minimum wage carries large disadvantages for many people in Cornwall. There are questions to ask the Conservative parliamentary candidates and unitary councillors. Localisers in other parties have some difficult questions too.

WORK FOR PEANUTS IN CORNWALL

A while ago I doubted the Tory Party conversion to social democracy.

Then there was a story in the Sunday Mirror last October claiming that “David Cameron would allow minimum wage to die out” (Sunday Mirror 5 October 2008).

Now the other day in the House of Commons a group of eleven Conservative MPs introduced a bill, which won’t get far, to make the mandatory national minimum wage voluntary: adult workers would be able to freely choose to work for less than its current £5.73 an hour (Hansard 10 February 2009 columns 1258-1260: the Employment Opportunities bill). The philosophy behind this was “freedom, flexibility, and opportunity” but I think in practice it will be about working for peanuts.

The argument seems to be that voluntarising the minimum wage would help struggling small firms by enabling them reduce their wage bill and thus keep jobs that otherwise might have to go or even create new jobs and thus help people presently out of work into work by letting them take jobs which firms could afford if they pay less than £5.73 an hour. It is a plausible argument but basically I think this is a reformulation of the original Tory argument that the minimum wage destroys jobs at the bottom and the way to save them is to pay poverty wages. I believe if working for less than the minimum wage is made permissible, it will encourage a rush to the bottom in pay and more and more workers will be asked to choose, a job on inadequate pay or no job? Working for less than the minimum wage will cease to be a voluntary choice for vast numbers in the low-paid jobs. Many wages in Cornwall would be among those reduced to peanuts.

This is not a pay cut in jobs with reasonable pay which I can see in present dire circumstances might be sensible in some firms; it is a pay cut at the very bottom.

Additionally, a cut in low wages will increase the call upon top-up tax credits thus shifting costs from employer to taxpayers generally – assuming the Tories would keep tax credits.

It is instructive to note the position here before the introduction of the minimum wage. Speaking in the House of Commons second reading debate in 1997 on the bill to introduce the minimum wage, Candy Atherton, then an MP for Cornwall, said that in Penryn, Cornwall jobcentre she had seen jobs advertised for care workers at £2.20 an hour; kitchen porters at £2 an hour; and a skilled car mechanic at £1.80 an hour to work “40 hours, weekends and nights” (Hansard 16 December 1997 columns 211-212). She explicitly challenged the idea that low pay brings jobs.

In fact very few jobs have been lost because of the minimum wage which is at a very modest level and is increased annually generally with judiciousness but over time above general price and pay increases. The national minimum wage has increased the real wages of the low paid without damaging employment. For both these points see this study, On the impact of the British national minimum wage on pay and employment, December 2006, by David Metcalf.

Britain’s minimum wage: what impact on pay and jobs is a summary.

The Conservatives voted against the minimum wage when it was introduced by the Labour government. The October story and the Tory sally on 10 February raise the serious question of whether a Conservative government would abolish the mandatory minimum wage or voluntarise it or let it wither and die. The Tory leadership should be open with us about this and the Tory parliamentary candidates in Cornwall should say out loud where they stand.

I think we should keep the mandatory minimum wage and keep on increasing it in normal economic circumstances. If we reach a point where jobs disappear in numbers, we should deal with that scenario then. In the meantime we should take the low paid out of tax. People on the minimum wage pay tax which effectively reduces the wage rate by around £1 an hour. I would like to see the low paid taken out of tax altogether and it is extremely disappointing that after twelve years of a Labour government, with many fat years and millions paid in bonuses to the well paid, working people start paying tax when they reach pay of £116 a week, with no ten percent rate now.

These are not normal economic circumstances. The recession and rising unemployment mean that whether the minimum wage should be frozen at its present level or raised is a difficult question – and wholly separate from the Tory bill. The Low Paid Commission will report in May and its arguments will be engaging.

Look for a moment at the measure of the downturn in Cornwall and the fast disappearance of jobs, the circumstances in which some Tories want to hobble the minimum wage. In January 2009 there were 8989 unemployed people in Cornwall – that is, people claiming job seeker allowance (JSA), the standard measure which probably underestimates unemployment (Table 16 at Claimant count by unitary and local authority). That is a very substantial rise over 2007/08 (see Table 12).

The JSA is not generous. A single person, over twenty five and with no dependent children, gets £60.50 a week on JSA. Rent and mortgage payments are additional but £60.50 is pitifully inadequate for a decent life.

All right, in normal circumstances most people are on JSA for only a few months until they find a job. But these are not normal economic circumstances, are they?

This is the pro-Cornish agenda, recognising the people of Cornwall and their needs. The minimum wage should remain mandatory and be increased if feasible in these circumstances; the Tories are wrong. Unemployment benefits should be increased now: the low level of the JSA which in boom circumstances might have been defended as a temporary payment and a spur to work, an argument I am unhappy with anyway, is not valid now. People will be unemployed for longer than in the recent past and debts and deprivation will pile up and their ownership of their houses is imperilled.

Meanwhile Cornish nationalism studies its navel.
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Notes

The national minimum wage began in 1999 at £3.60 an hour. About 1.2 million workers were covered by it. There are now about 2 million workers covered by it.

The TUC estimates that 1.5 million workers are currently paid below the minimum wage though not all these will be instances of noncompliance with the law.

The second reading of the minimum wage bill was on 16 December 1997, the third reading on 9 March 1998. Conservatives voted against the bill on both occasions.

The February 2009 JSA claimant figure for Cornwall is 10 220 (added 19 March 2009).

This post, Shameful failure, also discusses inter alia the minimum wage.

UPDATE
Chope’s Employment Opportunities bill was denied a second reading on 16 June 2009 (Hansard column 1106) and is down for second reading on 16 October 2009, along with a host of other bills. Early day motion (EDM) 1461 of 11 May 2009 opposed the bill.