CORNWALL PEERS VOTE FOR CHANGE TO TAX CREDIT CHANGES

In this this post I am recording how the Lords members associated with Cornwall voted yesterday on the government’s planned tax credit changes.

Read the amendments, debate, and votes
here.

There were three amendments, all proposed by women members, to the government’s plans. I put details and references below, along with the votes of members of the Lords who I am aware are associated with Cornwall and who voted.

Liberal Democrat Zahida Manzoor’s amendment rejected the tax credit cuts outright saying the house “declines to approve” the tax credit cuts: defeated 310-99. Liberal Democrats Judith Jolly, Robin Teverson, and Paul Tyler voted for the amendment. The amendment is at column 982, the vote at column 1030.

Crossbencher Molly Meacher’s amendment requires a response from the government to the Institute for Fiscal Studies (IFS) analysis of the changes and possible mitigation of adverse effects. Liberal Democrats Judith Jolly, Robin Teverson, and Paul Tyler and Labour’s Tony Berkeley voted for the amendment. The amendment is at column 1033, vote at column 1034.

Labour Patricia Hollis’s amendment requires the government to provide “full transitional protection” for present claimants against adverse impact of the tax credit cuts for a minimum of three years, along with a response to the IFS analysis and possible mitigation. Liberal Democrats Judith Jolly, Robin Teverson, and Paul Tyler and Labour’s Tony Berkeley voted for the amendment. The amendment and vote are at column 1038.

I welcome the Lords positive Meacher and Hollis votes. We live in interesting times.

CORNWALL TORY MPS VOTE FOR TAX CREDIT CUTS

On Monday, 20 October 2015, the Commons debated a non-binding Labour motion: “this House calls on the Government to reverse its decision to cut tax credits”. The debate begins at Hansard column 845 and the vote at column 923.

The debate arose from the concerns that the Tory government’s changes to welfare and tax credits make around 3 million families worse off. I wrote about this in the posts Robbing the working poor  and Assaulting poverty or the poor.

In the vote on the Labour motion Sarah Newton was a teller for the noes and the other five Cornwall Tory MPs voted against the Labour motion.

This is a repeat of the vote from Cornwall MPs last month to approve the regulations for the tax credit changes: see Hansard 15 September 2015. The debate begins at column 964, the vote is at column 989. Sarah Newton was a teller for the ayes and the other five Tory MPs for Cornwall voted for the regulations.

At prime minister’s questions on 21 October David Cameron said he was “delighted” – yes, that’s the very word he used – that the tax credit cuts and other changes had been approved by the Commons (Hansard 21 October 2015 column 948).

Are the Cornwall Tory MPs delighted too? Read the comments of Steve Double (St Austell and Newquay) and Derek Thomas (St Ives) extracts of which I have put below; do read the whole of what they said.

On 22 October 2015 Steve Double wrote on his blog : “I have been working behind the scenes to ask the Government to do something to ease the impact of these cuts. I have met with the Chancellor George Osborne and have written to the Prime Minister… I want to make clear that I support the principle of reducing tax credits but believe the severity of what is proposed needs to be addressed. I will continue to work towards a different solution, a solution that softens the blow that has come relatively swiftly.”

Protestors against the cuts gave Derek Thomas a petition. The   Cornishman  reports on 28 July 2015:

“Mr Thomas said he would work to alleviate the plight of anyone suffering hardship as a result of the cuts…

‘I completely agree that the Government needs to strike the right balance when reforming welfare. There is a need to reduce welfare spending but we must be careful that people do not experience unacceptable (and unintended) levels of hardship.

‘I will work hard to help people who find themselves in this situation and I have offered to hold a regular drop-in surgery in the Changing Room so that people can get help when needed.’ ”

I am not clear what the other four MPs think on the issue.

The Commons will look at the tax credit changes yet again on 29 October with a motion calling for mitigation of the effect on low paid workers and their families. It will be interesting to see how the six vote. The issue will be before the House of Lords on 26 October. Signatories to a letter from members calling for change so that working families do not experience “major overall losses” include Tim Thornton, bishop of Truro, and Robin Teverson. The prime minister and chancellor insist the tax credit cuts will not be changed at all. We’ll see.

Added 26 October 2015
Very difficult findings for the government on the effects of its tax credit cuts from research group Policy in practice

ROBBING THE WORKING POOR

Faced with low pay and employers unwilling or unable to pay a real living wage, the Labour government introduced tax credits, a means of topping up unlivable low pay with taxpayers’ money. A civilised and sensible approach, it seriously helps very many people, who also receive other financial benefits such as help with rent.

The Tory government now wishes to move away from state subsidy for low pay and dependency on benefits. It considers employers should pay their workers decent wages, hence Osborne’s compulsory “national living wage” of £7.20 an hour from next April for workers aged twenty five and over, and this, with other measures, the Tories say enables a reduction in tax credits to the low paid. The current real living wage is £7.85 an hour outside London and that rate applies to workers aged twenty one and over.

I heartily agree that all workers should be paid at least a real living wage: workers should have the proper recognition of their labour and the simple dignity of earning enough to live decently, even well, and provide good security and stability for their families. A proportionate reduction in state subsidy to low pay should then follow. The question is: have the Tories got the arithmetic right, does their simultaneous give-this-take-away-that of their July 29015 budget add up? The independent expert Institute for fiscal studies (IFS) says it doesn’t and that around 3 million low paid families will overall lose as much as £1300 a year from the Tory changes. I gather individuals will learn of their quantified losses in December, the month of Christmas. The IFS damagingly describes the budget as “regressive”.

Sensible proposals have been suggested, by Frank Field among others, to mitigate the presumably unintended losses but David Cameron has insisted there will be no loss of income for the poor and his government will not change anything in their plans.

Well, that confirms the Conservatives as the stupid party – and the nasty party. I think the stupidity will tell against them most.

The risks for the government are so big that I believe there will be mitigating changes. It will be interesting to see how Cameron explains that.

And

On 6 October in a platform speech at the Tory party conference Boris Johnson, mayor of London, and known to fret genuinely about those 3 million losing families, said of the government welfare changes: “we must ensure…we protect the hardest working and lowest paid: the retail staff, the cleaners…”

ROTTEN APPLES

There was an interesting letter in the Independent the other day. The writer, Roddy Keenan, pointed out that fraudulent behaviour in the City is framed as rotten apples not comprehensive or systemic failure. However, fraud by a benefits claimant is framed as “representative of benefit claimants a whole,” an example of widespread abuse. Rotten apples do not call for all-out reform of the City, systemic benefits abuse supports the abolition of the benefits system. Keenan makes an excellent point.

Here’s his letter
– scroll to No ‘rotten apples’ on benefits, Independent 10 August 2015

LOCAL HOUSING ALLOWANCE RATES IN CORNWALL 2015-16

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The new rates for local housing allowance (LHA, housing benefit for renting in the private sector) for April 2015 to March 2016 are here. (LHA 2015 tables, then tab for table 4 in the spreadsheet.)

Cornwall falls into three broad rental market areas (BRMA) for calculating housing allowance rates: Kernow West; North Cornwall and Devon Borders; and Plymouth. I have put links to maps of the areas below.

Kernow West

North Cornwall and Devon Borders

Plymouth

THE NASTY PARTIES

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The Tory Libdem coalition has been a nasty government. It has hit the poor and vulnerable, savaged public goods like funds for affordable housing, and used austerity as an opportunity to undermine the state and the collective endeavour for the good of the many that the state enables. The Tories and Libdems are marketising the health service and comforting the rich. For five years they have stretched out their coalition hand and visited us with a darkness that can be felt.

Here are some very recent examples of their government:

Forty percent of new teachers quit within a year Guardian 31 March 2015

NHS damaged Guardian 7 April 2015
Doctors say “this administration’s record is characterised by broken promises, reductions in necessary funding, and destructive legislation, which leaves health services weaker, more fragmented, and less able to perform their vital role than at any time in the NHS’s history”.

Tory Libdem benefit sanctions policy has led to food banks Guardian 9 April 2015

Children coming to school hungry Guardian 5 April 2015

NHS hospital waiting time figures worst in seven years Guardian 9 April 2015

Trussell Trust: written evidence to Works and pensions select committee with examples of job centre ‘sanctioning’ 12 December 2014. Evidence to the committee from others is here.

And this too:
Schools forced to act as ‘miniature welfare states’ with teachers buying underwear and even haircuts for poor pupils Independent 1 May 2015

Darkness that can be felt: Exodus 10.21

FOODBANKS AND COUNCIL TAX IN CORNWALL

Foodbanks
I have pointed out the growth of both foodbanks and the numbers of people using them in Cornwall and elsewhere. I have linked these to changes and incompetencies in the benefit system which have left people without enough money to feed their families and heat their homes.

However, David Freud, the benefits minister, has said that “it is difficult to know what came first, the supply or the demand”. The supply is the foodbank, the demand is the users. He said that foodbanks are a free good and “there is an almost infinite demand for a free good” (Lords Hansard 2 July 2013 column 1072).

In short, the view of the Tory Libdem government is that the foodbanks might be not so much serving a need of hungry people without enough money to buy food as rather themselves creating a need. People are using them not because they are short of money for food and everything else but are taking advantage of the free food because it is there.

As people have to be referred to foodbanks it is very unlikely that there is much freeloading. Poverty charities that work on the ground attest that foodbanks are serving a genuine need, a gap in welfare provision by the state; and the need has its origins in the delays in paying benefits and changes such as the localisation of crisis loans. In the government’s language, the demand came first. The need is genuine; Freud is wrong.

What we have is a reluctance by the Tory Libdem government to face up to the unpleasant consequences on people of policy decisions by that government, the impact of those decisions on the everyday lives of people. As the partiality and harshness of government pauperising decisions become more evident, as the cries become louder and the challenges more eager, the retreat of Tory Libdem ministers and MPs into the bunker of denial and unreality will be more marked.

Council tax
Meanwhile in Cornwall as predicted people are having difficulty in paying council tax. The Tory Libdem government localised council tax benefit (and renamed it council tax support) and made it the responsibility of local government, Cornwall Council here, to arrange a benefit system; at the same time the government cut funds for this by ten percent. Cornwall Council, then run by Tories and Independents, decided to require everyone, even the poorest, in a rerun of the poll tax, to pay some council tax. Now we are told that about 6000 are in arrears with their council tax and the council has extraordinarily summonsed about 1000 of them. I cannot see what is positive or constructive about that.

To sum up. Tories and Liberal Democrats are pauperising the poor. But you knew that already, didn’t you?

Related post
Taxing the poor in Cornwall (bedroom tax and council tax benefit)

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CORNWALL’S UNEMPLOYED WAIT, WAIT, WAIT, WAIT, WAIT, WAIT, AND WAIT

The recent spending review, informing us what the Tory Libdem government will spend and cut, included a particularly telling instance of a mean-spirited attack on people when they are down. At present if you become unemployed you have to wait three days before you can claim job seekers allowance. The Tory Libdem view is that you should wait seven days. See page 25 here and page 7 here.

The current three-days wait for job seekers allowance does not apply to linked benefits; presumably the seven-days wait will apply to all of the replacement universal credit.

If you have been in a well paid job, yes, you probably have some savings that can tide you over. However, many people in Cornwall and elsewhere have ill paid jobs with no opportunity to save. What do they do for a week with no money? Look to a voluntary food bank for help – see the latest on those in Cornwall here which shows that the foodbank for Camborne, Pool, and Redruth is now supplying a thousand meals a week. Perhaps look for a payday loan. Perhaps choose to eat rather than to heat. For people in and out of temporary work, it is another anxiety and dread. The Tory Libdems have ripped the long-standing safety net that keeps people from falling into destitution.

Charities that deal with the poor are clear. For example, Alison Garnham of Child Poverty Action has said that the seven-days wait “will leave more families and children cold and hungry”. Zacchaeus 2000 has said that it takes “money from the pockets of the nation’s poorest at the time they need support most of all”. Immiseration is a morally unacceptable approach by the Tory Libdem government to people who have just lost their job.

Since the giravolta of the Liberal Democrats, their transformation into merely different Tories with their new mission to make life harder for those at the bottom, Labour has been the only place of hope for progressives but hope struggles. The shadow chancellor Ed Balls has said Labour is not opposed in principle to the extended wait and it might be a sensible way to save money and put a focus on job-seeking (interview on Radio 4, 27 June 2013).

Labour’s response to the seven-days wait is lamentable.

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TAXING THE POOR IN CORNWALL

We are about to see substantial new taxes on the poor come into effect. Of course they are not officially called that, the Tory Libdems have prettier names for them.

Bedroom tax
First, there’s the bedroom tax. People in social housing who receive housing benefit to help them pay their rent and who have more bedrooms than they are judged to need will have their benefit reduced by 14 percent for one surplus bedroom and 25 percent for two or more. This is expected by the government but not by anyone else to save £500 million a year in benefit payments. Tenants can avoid the tax by voluntarily downsizing to a smaller house which will affect the anticipated savings.

There are difficulties in downsizing which the government prefers not to notice: for example, Is a small box room a bedroom? Where will family visiting a parent sleep? What happens if there are not enough smaller houses?

On the last difficulty we know that there are not enough smaller places. Tenants who decide to downsize and find there is no social housing available will have to move into a house in the private sector; rents there are dearer than in social housing so their housing benefit will be larger to reflect that. The government’s savings would then be eroded.

There is then incoherence in this policy. The government wish people to downsize to free up large accommodation for people on the social housing waiting list. However, if people downsize that eats into the anticipated savings and, as there are not enough smaller places in the social rent sector, will lead to an increase in housing benefit payments as people move into the dearer private sector.

This is not only an uncivilised policy, it is inept.

How many people in Cornwall are affected?
The National Housing Federation (NHF), the group for affordable housing associations, calculates that in Cornwall around 3000 people will be affected. The average yearly tax (or benefit loss) for tenants in Cornwall is around £532 for one surplus bedroom and £950 for two or more (slightly less in St Ives constituency). [NHF cited in Guardian 28 March 2013. The figures for each constituency can be got by clicking on the map.]

Council tax support (CTS)
At the same time people who up to now have been judged too poor to pay any or all council tax will in Cornwall now have to pay a quarter of it.

The Tory Libdem government cut its subsidy to council tax and left it to local councils to work out how to deal with the shortfall. Pensioners were exempted by the government from any rise down to this cut. At the same time council tax benefit was renamed council tax support. Cornwall Council, with a shortfall of about £6 million a year, decided to limit the subsidy/rebate for the poor to 75 percent of the tax, that is the poor should pay 25 percent of the tax due.

Of course there are difficulties. The poor struggling with depleted incomes may default on their new council tax, choosing to eat and clothe as their priority; Cornwall Council will then have to summons them and perhaps send in bailiffs. We are talking about seriously poor people here. This Tory Libdem policy is likely to have these uncivilised consequences.

How many people in Cornwall are affected?
There are 26 729 people in Cornwall who receive council tax benefit [Cornwall Council Cabinet papers, 12 December 2012, page 83 onwards.]

Notes
“At least 50 000 in Cornwall will be affected by changes to welfare at various times over the next five years.” [Cornwall Council’s Community Intelligence Team, page 106 in 12 December 2012 Cabinet papers cited above]

Of 326 councils in England 71 percent are requiring some payment of council tax by the previously exempted poor. Of those requiring some payment four-fifths are requiring a lower percentage contribution than Cornwall. [ Joseph Rowntree Foundation, The Impact of localising council tax benefit .]

See also
Bedroom tax NHF

The New Policy Institute, Council tax support update has a comparison of council approaches to the council tax changes.

Housing Benefit (Amendment) Regulations 2012 (bedroom tax regulations)

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LEGAL CHALLENGES TO ENDING EXEMPTION OF POOR FROM COUNCIL TAX

UPDATE 7 February 2013
Haringey Council wins case but appeal to be made

ORIGINAL POST 1 February 2013
Read here about legal challenges to recruiting the very poor into paying council tax and cutting the council tax benefit so that people receiving it pay more council tax. If any of these challenges succeeds will Cornwall Council be affected?

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