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…”

ARE THE POOR IN CORNWALL LOSING OUT?

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There is an update at the foot of the post and a link to a later post

As part of the Tory Libdem changes to welfare two discretionary aspects of the social fund previously administered by the Department for work and pensions (DWP), crisis loans and community care grants, have been abolished. From April 2013 funds have been given by central government to local authorities for a replacement local welfare scheme. In Cornwall this is called the Crisis and care awards scheme.

Very briefly, the scheme gives help to low-income people in an emergency with living expenses and helps vulnerable people with, for example, household equipment, to enable them to live in the community. Cornwall Council has excellent leaflets on its website here explaining the scheme.

In 2013/14 Cornwall was given £985 074 by central government for the scheme (and additional separate funds for administration).

It gave £647,724.25 of those funds to 2272 successful applications. That’s about 66 percent of the total funds the council received and about 55 percent of total applications.

The council did not distribute £337 000 of its allocated funds as crisis and care awards. It gave £150 000 of that to Citizens Advice Bureau for advice to people the council referred to it. That’s a wise use of the undistributed funds. And the rest of it? That money, meant for the vulnerable and poor in Cornwall, went into the council’s general funds.

Cornwall has been given the same amount for the scheme from central government for 2014/15 so that looks like another by-gift from the desperate to the council’s funds.

Cornwall Council should look carefully at its local criteria for these awards to make sure nobody in need is being excluded who could be included. Could the criteria reasonably be loosened? While protecting people’s privacy, is it possible for the council to give as examples details of some applications refused so that we can be reassured about the criteria in practice? A much smaller proportion of applications were successful in 2013/14 compared with the data for 2005/06 and 2009/10 in Appendix D here but some reduction was expected because of the changes in arrangements for distribution.

If the council indeed has the awarding spot on, and that may very well be so, central government has been too generous in its allocation to Cornwall. Perhaps in that case rather than absorb the undistributed surplus into general funds the council could, if permissible, give it or its equivalent to the foodbanks in the county: they are another working scheme for crisis and care scheme for people here.

More worrying is the Tory Libdem government’s intention to end the scheme at the end of the current financial year. Councils will be expected to meet the needs of the present scheme from the general funds given to them by central government, what we call their own resources. That is a severe challenge. I hope Cornwall Council is already planning how it will do this.

Update 13 November 2014
The Department for work and pensions has published Local welfare provision review (November 2014). You can access it from Deposited parliamentary papers (DEP 2014-1442 of 10 November 2014). Page 21 gives some possible reasons for underspending the funds by local authorities.

Later post
Government dumps the vulnerable 24 December 2014

MAKE ‘EM WAIT

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Among the changes made by the Tory Libdem Welfare Reform Act was the requirement of people who become unemployed to wait for five and a half weeks before receiving any unemployment benefit – a month statutory wait and then a week for administration. Currently they wait two weeks.

The government says that this wait matches the monthly pay cycle of many in work and thus prepares people for their eventual transition to work. This makes sense in theory – and saves public money in administration – but what of it in real life?

How are people supposed to live without money? You work hard, pull your weight, contribute to our national prosperity – and then when you lose your job, through no fault of your own, you have to wait for five weeks for any supporting money.

Research by Step Change (Life on the edge) shows that around “13 million people do not have enough savings to keep up with essentials for a month if their income dropped by a quarter”. Of course, modest wages make saving for rainy days very difficult. It is difficult for people when they lose their job and we should not compound those difficulties by leaving people without financial support for five weeks. People should be able to focus on getting back in to work, not worrying unnecessarily about money. We should not be planning to put people in debt and poverty.

The government received serious advice about an unacceptable likely consequence of the five-weeks rule. For example, the Social Market Foundation gave telling evidence to the works and pensions select committee about the government’s theory and plans. It said that “some households will be unable to cope and will run out of money before the end of the month”.

The issue was raised by Labour (Kate Green in Hansard at second reading 9 March 2011 column 1012; and in Public Bill Committee 29 March 2011, page 180) but the regulations (Universal Credit Regulations 2013, statutory instrument 376) bringing the payment cycle into force stuck with five weeks.

Now the TUC has found that 300 000 people will be affected by the long wait.

I understand that welfare provisions should be regularly examined and changed from time to time to make them responsive to contemporary circumstances and to encourage and support people into work. However, this five-week rule, unless mitigated by exemptions, seems to fly in the face of compelling arguments of its likely adverse effects. That suggests that Tory Libdem ideology rather than realism is the driver.

Note

Universal credit: the problem of delay in benefit payments by Carl PACKMAN

SI MONUMENTUM REQUIRIS, CIRCUMSPICE

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

__________

“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

__________

“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

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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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FROM HIM THAT HATH NOT 2

Cornwall’s three Libdem MPs split three ways

The Welfare Uprating bill was completed in the Commons yesterday. This increases some social security benefits and tax credits by 1 percent for the financial years 2014-16 which, given likely inflation, is a cut in real terms. The benefits and credits are listed in the schedule to the bill. The bill will affect several thousand people in Cornwall.

I looked at this in the post From him that hath not. Yesterday there were three votes on the bill. In the first, division 136 on a Labour amendment (amendment 12 here ) Andrew George did not vote, Dan Rogerson and Stephen Gilbert voted against the Labour amendment.

In the second, report stage division 137 effectively on the unamended bill with the 1 percent provisions, Andrew George voted against the government bill, Stephen Gilbert voted for the bill, and Dan Rogerson did not vote.

On the last, division 138, which was the third reading of the bill, Andrew George voted against the bill, Stephen Gilbert voted for it, and Dan Rogerson did not vote.

The three Tory MPs for Cornwall constituencies voted in all three divisions to support the government as did Gilbert.

The amendments of George and a handful of other Libdems to relate benefits to wage rises, and of Caroline Lucas, to relate benefits to rises in RPI prices, were not voted on. This was because of the timetable agreed on 8 January 2013 which Gilbert and Rogerson both voted for (Hansard 8 January 2013 column 280).

Notes
Unless an MP says he abstained or votes both for and against in the same division, it is not possible to discern whether he abstained or was absent for a vote. I have written “did not vote” to cover this unknown.

In answer to a parliamentary question about the effect on the income of disabled people of limiting rises in benefits to 1 percent, the government said: “The Department [DWP] estimates that approximately 34% of households where someone describes themselves disabled are affected by this Bill with an average change of income of around -£3 a week in 2015-16 compared to uprating by the consumer prices index (CPI). This represents around 3.4 million households in Great Britain.” Hansard 8 January 2013 column 470W

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FROM HIM THAT HATH NOT

The Welfare Benefits Uprating bill limits most social security payments to an increase of 1 percent a year for 2014/15-2015/16, an increase expected to be below inflation and thus a real terms cut. Currently they increase in line with CPI inflation. The text of the current bill is here, along with proposed amendments.

A pitiful handful of Libdem MPs, including Andrew George and Dan Rogerson, Cornwall MPs, are suggesting that the uprating should be related to the increase in the general level of earnings. They will not succeeed.

The parliamentary explanatory notes for the bill are here and the House of Commons Library research paper on the bill is here.

Assessments of the impact of the bill
There have been several useful assessment of the impact of the bill on various groups. The excellent library research paper linked above gives inter alia an account of the impact.

The Department for work and pensions (DWP) impact assessment

The Citizens Advice Bureau (CAB) analysis

The Resolution Foundation (RF)

Who gets hit hardest?
“…capping the uprating of benefits will swamp any gains from the change in personal tax allowances for almost all low income households whether in or out of work and many middle income families with children” – Citizens Advice Bureau

“The majority of the cuts made to benefits and tax credits…will come from working households” – Resolution Foundation

The DWP impact assessment shows in table 4, page 8, that 1.4 million people in the bottom decile of income lose an average of £4 a week, 2 percent of their net income. The people in the top decile lose an average of £2 a week, less than 1 percent of their net income.

What disturbs me is the piecemeal approach of the Tory Libdem government to social security reform. Since May 2010 we have seen the chipping away of the real value and scope of benefits that help with the costs of rent, council tax, unemployment, bringing up children, and various disabilities. The Welfare Benefits Uprating bill is the latest. The Tory-Libdems say that the real term cuts are the consequence of the economic disaster that hit us and most of the developed world and, of course, blame Labour. However, there is a clear ideological path through the murk of spin: the government is diminishing the welfare state, advancing the private over the public, reducing help to the needy without fostering a society with robust opportunities for work. The ideological and disjointed and inept Tory Libdem approach has created a Britain of misshapen chaos, of food banks, too few houses and too high rents with no discernible government idea of what to do with effect, tax cuts for the very rich amid claims of national austerity; and in Cornwall in particular too few NHS staff as the latest Care Quality Commission report on the Royal Cornwall Hospitals Trust shows, hopefully now rectified, and squeezing money from those at the bottom as Cornwall Council is thinking/has thought of doing on council tax benefit.

We should have a coherent benefit and tax system that supports the needy and encourages work, that takes a realistic liberal view of what is desirable and what we can afford, and that encourages solidarity among people of vastly differing circumstances. The Tory-Libdems are neither up to that task nor inclined to it. I’m not sure yet about Labour but so far, oh dear, oh dear…

Notes
From him that hath not Matthew 25:29