SKEWERING THE POOR

30 January 2015


Tax and benefit impact
The Institute for fiscal studies (IFS) has published its conclusions on how tax and benefit changes of Tory Libdem government since 2010 have affected different groups. The report is the latest in several which explore the Tory Libdem government’s financial and related policies and reach common conclusions; it is here (open the pdf). Broadly the IFS report shows that two groups have lost most: the richest ten percent and the poorest ten percent. The poorest have lost because they are more heavily dependent on benefits and they include people too poor to pay income tax to begin with and therefore gain from the Tory Libdem raising of the point at which you begin to pay income tax.

Users of public services
The IFS model does not include cuts to public services which again affect the poor most. The impact of the cuts in local government funds and thus different users of council services in Cornwall is explored in this budget report (click on full impact assessment report in the text). The report identifies the group who use the services most and who therefore who stood to lose most when they are cut. Cornwall Council took mitigating actions to reduce the adverse impact on them.

The bitter fruits of the Tory Libdem government
I wrote last November in the post The bitter fruits of coalition about several reports on similar topics. The conclusions were similar.

More damning reports
And a nine-report study, covering more ground, has similar financial conclusions. It is summarised in the Guardian 27 January 2015.

Dumping the most vulnerable
The latest assault on public services is the ending of direct central government funds for the local welfare assistance scheme which helps the most vulnerable in Cornwall and elsewhere. See the post Government dumps the vulnerable 24 December 2914.

Yes, they’re stercora
We can now say with confidence that overall the financial policies of the Tory Libdem government since 2010 have fallen disproportionately on the poorest. Do not expect admission and repentance from the parties but do ask them.

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If you wish to see what the Tory Libdem government has achieved, what it is about and the fruits of its work, look around you.

David Cameron: Welfare reforms are “at the heart of our social and moral mission”
Daily Telegraph 19 February 2014

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“Malnutrition, rent arrears, bailiff visits and food bank use in Cornwall soars

The levels of malnutrition, rent arrears, bailiff visits and food bank use in Cornwall is soaring as welfare reform starts to bite.”
Falmouth Packet 2 February 2014

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“Thousands of HIV patients go hungry as benefit cuts hit

Thousands of people with HIV have been left struggling in poverty by the Government’s welfare reforms – with some unable to afford the basic food they need to fight their condition.”
Independent February 2014

Notes
Si monumentum…the epitaph of Christopher Wren in St Paul’s cathedral


ALTERNATIVE THAT ISN’T

31 October 2011

Alex Folkes, deputy leader of the Cornwall Council Libdems, wrote on twitter on 28 October that in Cornwall the Lib Dems are the “only true alternative” to the Conservatives. Alternative? Really?

Let’s begin the week with a quiz. Read through the following and then answer the question:

Cuts to local government funds, abolition of the Agricultural Wages Board for England and Wales, Health and Social Care bill for England, selling off the public forest in England, reactionary changes to social housing tenancies and rents, abolition of the Educational Maintenance Allowance in England, raising – tripling – university tuition fees, axing the planned extension to free school meals, cuts to housing benefits, ending the Building Schools for the Future program for England, increasing VAT, abolition of the Future Jobs Fund …

Right, now say whether you think these national measures are:

(a) the works of Satan or the archangels

(b) the works of only the Conservatives, done while the Libdems were out of the room making the sandwiches

(c) the works of the Tory Libdem coalition.


The Tory Libdem government appears to be on a carousel of stupidity.

Most universities have not reported their fees yet but, to the government’s amazement but no one else’s, most fees look set to be typically near to the maximum of £9000 a year, meant to be an “exceptional” figure. This, with changes in the interest charged, will increase student debt though there will be bursaries and fee waivers. Expect a rehash.

Tory Libdem plans to privatise England’s forests antagonised very many, including half a million petitioners, all with votes, and have temporarily at least been shunted aside.

The bill to reorganise the NHS is being heavily amended; or perhaps it isn’t really being amended but just tinkered with. Who knows? All is a shambles.

Removing the ringfencing from the money for the discretionary supporting people program for very vulnerable people has enabled some councils, including Cornwall, to cut funding disproportionately. This was entirely predictable: faced with making cuts, many councils will cut unringfenced discretionary projects. The government has deprecated disproportionate cuts to supporting people that its own policy made possible and likely: see page 29 here.

The Tory Libdem government has ended the waiting time targets in the NHS. The proportion of patients waiting for more than four hours in A and E to be seen has increased significantly, including in Cornwall, in 2010 against 2009. See the report for 4 April 2011 here.

Now we have the chaos of the replacement for the student educational maintenance allowance (EMA). A Labour scheme of £580 million (2009/10) was to become a Tory Libdem scheme of £75 million a year. After protests it has been rewritten to be a scheme of £180 million a year for fewer students plus £194 million for transitional payments, a total of £374 million found from – well, where from? Is it the money Osborne keeps under his mattress or is it money from other parts of education department spending? The plans were to stop the EMA in July for everyone but protests have led to its being continued wholly or in part for students currently receiving it; that’s the £194 million. This is sensible and fair but why did the government first plan to be stupid and unfair?

This is a coalition of the drowning.

Addendum 8 April 2011

University College Falmouth has set its fees at £9000 from 2012.
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MAKING PEOPLE POOR

16 December 2010

The Tory Libdem government like to characterise their policies as progressive and fair. They’re having a laugh of course. Anyway here’s the latest assessment of their progressive and fair harrowing of Britain, the report for the IFS and JRF on child and working-age adult income poverty in the next few years as a result of the government’s decisions: Child and working age poverty from 2010 to 2013.

There is a summary at the beginning of the report. In brief, relative poverty among these groups goes up from 2010/11 to 2013/14 by about 800 000 as a result of the government’s policy choices. Absolute poverty will also rise. Several thousand of them will be here in Cornwall.

Any chance of Cornwall Libdem MPs sharing their thoughts with us?

Notes
IFS Institute of fiscal studies
JRF Joseph Rowntree foundation

Note that the report says the work is “subject to uncertainties and limitations”.
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The Tory Libdem Treasury ministers said that their June 2010 budget was about fairness and the rich were more adversely affected than the poor. Charities and commentators have robustly challenged that Treasury view and in several posts I have tried to show the adverse effect of some of the measures on the poor and vulnerable in Cornwall.

Now the Institute for Fiscal Studies (IFS) has published its revised and authoritative analysis which shows that the overall effect of the Tory Libdem ’emergency’ budget was regressive in that the tax and benefit changes hit the poorest households harder than the better off. Read the report and the evidence it provides. Note that it says Labour’s tax and benefit plans of March 2010 were progressive.

Two measures mainly make for the regressiveness. First, cutting benefits which affects the low-income households more than the better off. Second, linking benefits to the lower consumer prices index (CPI) in place of either the retail prices index (RPI) or the Rossi index will reduce those benefits. That reduction will total around £6 billion in five years time. An explanation of differences between the indexes begins at page 15 of the IFS analysis.

I wonder what the Cornwall Libdem MPs, who welcomed the budget as a “step forward for Cornwall and the country,” now think of it in the light of the latest IFS findings?

NOTES

Tory Libdem budget June 2010
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LOCALISING BENEFITS

31 July 2010

I have set out previously the Tory and now Tory-Libdem proposals to end national rates of public pay and benefit.

These three posts explore this:

Tories eye benefits and wages in Cornwall

Vote Tory today, cry tomorrow

Tory-Libdems to localise NHS pay in Cornwall which refers to paragraph 4.36 in the NHS white paper Equity and excellence: liberating the NHS of July 2010.

The Department for work and pensions (DWP) has now published a consultation paper, 21st century welfare, which has a brief section on “localism” in chapter 4 paragraphs 8-9. This localism is not simply about more local discretion in administration but also about the rates of benefits. Read the arguments in this article in the Independent of 31 July.

Should benefits in Cornwall, for example, be lower than in areas like London with higher costs of living? Answering a similar question on Radio 4 the DWP secretary of state said, “We want to talk to people from different areas to see whether or not they would prefer that.” The DWP would like to hear from you.

ADDENDUM 3 August 2010
This post on the Liberal Conspiracy blog shows that, contrary to a claim in chapter 2 paragraph 9 in the DWP consultation paper, welfare payments do reduce the gap between the richest and poorest, do reduce income inequality.