Ipswich Unemployed Action.

Campaigning for Unemployed Rights.

Spending Review Hits Unemployed.

with 17 comments

This sums it all up.

With the CSR, we will certainly see more people out of work (cuts), and the DWP Budget  is for the chop.

While our trained analysts, economists, commentators, and sooth-sayers pore over the CRR the comments boxes are open.


Written by Andrew Coates

October 20, 2010 at 3:45 pm

17 Responses

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  1. Where is the French when we need them?!

    Seems everyone here is happy (well, to put it another way… not unhappy) to put up with the Conservatives.

    We need a new General Election next year… say March or April so we can revert back to 17.5% VAT (Did we all forgot about the VAT increase?)

    This gets my back up really… you can decide to order less aircraft etc. or have an aircraft carrier for 5 years or so without any planes… but how can you justify a cut to benefits?

    As the employment situation in the country doesn’t improve how can you really make fair cuts? You can’t. More bullying to get people off benefits will begin. Alternatively… “Today you wont get any jobseekers allowance… we are out of money!”

    Flexible New Deal

    October 20, 2010 at 3:58 pm

  2. “Today you wont get any jobseekers allowance… we are out of money!” – but how can you “run out of money”? How can you have a situation where there is plenty of food in the shops and buildings standing empty whilst swathes of people are on the streets starving – because we have “run out of money”, eh?!


    October 20, 2010 at 4:03 pm

  3. “Job Centre closed INDEFINITELY – we have RUN OUT OF MONEY”


    October 20, 2010 at 4:05 pm

    • hehe, totally right, was hoping people would understand I was referring to Government Budget ideology… its impossible to run out of money in reality but they can always claim to have no money.

      Flexible New Deal

      October 20, 2010 at 4:42 pm

      • But Osborne keeps hammering the point over and over again: “there is NO money”, “we have run out of money”. When you think about it – it’s just stupid – it’s amazing that so many people buy into that shit!. We could end up like in the American Depression where they “they had plenty of everything, but no money.”


        October 20, 2010 at 5:15 pm

  4. ken

    October 20, 2010 at 4:58 pm

    • “The question is how quickly Britain can adapt..”

      it took only three years in Nazi Germany (1930-1933). 😉

      “..and whether those unable to change will be protected.”

      history tells us — no.

      Mark Easton

      October 20, 2010 at 6:24 pm

      • Spot on, we are going to see things crumbling around us: starvation, homelessness, transportation to far off “resettlement camps”, the disabled being summoned to “special hospitals” never to be seen again… and we won’t suspect a thing because they media will be pumping out the same propaganda, the same smiley faces will be on the telescreen and x-factor will still be on…


        October 20, 2010 at 6:34 pm

  5. The truth about George Osborne’s reforms

    5pm: It was a speech of nearly 10,000 words, but the real news came in a brief passage of just 291, which George Osborne spluttered out in machine-gun fashion. It covered the “reform” of social security.

    Before the big day, the pre-briefing was all about terrifying cuts for public services. In the event, Osborne raided the welfare budget in order to make a crowd-pleasing claim that he would cut public services by “only” 19%, which he claimed were rather more mild cuts than those Labour would have imposed.

    There had, of course, been a measure of sabre-rattling on welfare in advance of the speech, but this was chiefly connected with the withdrawal of child benefit from higher-rate taxpayers, a move to save a mere £1bn out of the total £7bn of new savings that he was bent on making today.

    Coming on top of £11bn of social security cuts already announced in the budget in June, the great bulk of the new measures fall not on higher-rate taxpayers or others with broad shoulders, but on the workless, the infirm and the poor.

    Taking the measures one at a time, the first – and the biggest – was to “time limit contributory employment and support allowance” for one year, that is the benefit formerly known as incapacity benefit. What this means is that a disabled or seriously sick person who has a working spouse, however low-paid their job may be, will lose their personal entitlement to benefits after a year.

    Singles will be able to fall back on a means-tested safety net, but everyone else will be forced to rely on the generosity of their partner. Expect wheelchairs in Downing Street as the coalition does away with the long-established principle that people who have contributed their own national insurance in the past, and then become sick and disabled, should expect a modest stipend from the state in recognition of this.

    On housing benefit, already savaged in June, there was a move to link the maximum rents paid for council and housing association properties to the market rent, something which will further encourage the cleansing of the poor out of central London. On top of that, we have the extension of the penny-pinching presumption of shared living, which the old Tories imposed on very young people (in order to try and encourage more of them to stay in the family home) to people as old as 35 who, presumably, are already likely to have flown the family nest.

    Local authorities will get new “flexibility to manage … council tax benefit”. Aside from the inevitable administrative shambles that will be produced by hundreds of town halls administering a complex benefit in entirely separate ways, the 10% cut in the overall budget returns us to the days of the poll tax, by requiring councils to chase poor people for a fraction of their personal bill.

    Recall that the poll tax payments for the poor were capped at 20% of the total bill, but that did not prevent a spot of bother on the streets. In the light of this, I’m tempted to say that I predict a riot.

    Next came cuts to benefits for the seriously ill who live in residential care. And after that boy George turned his hand to reducing “savings credit”, a benefit Labour introduced to see off the old anomaly by which poorer pensioners with a little savings, most of them single women, would find it knocked pound-for-pound off their income support entitlement.

    His willingness to punish this group, who have saved a little, stands in staggering contrast to the great pains he went to placate the frustrated equitable life savers of middle England. Last but not least there were tax credits, with the cuts – as in the budget – half-heartedly soothed by an increase in the basic rate for children.

    It will not be enough to undo the damage that comes from the rest of the package. That consisted of restricting the working tax credit (yes, that’s right, the one that’s meant to make it pay to work), and cutting the help the state gives to poorer mothers who work to help with childcare costs.

    None of this fits with the government’s pro-work rhetoric, and it is intriguing that the spending review documentation (at least on my quick reading) omits the table that was in the budget on the so-called marginal deduction rates which measure the poverty trap as people see their benefits reduced from working an extra hour.

    6.30pm update: On the basis of the CSR documentation, I have only a fuzzy feeling for what is going on with council tax benefit, but it is enough to make me scared. I do hope the coalition have a clearer idea, although I am not at all sure they do.

    The official policy is to “cut spending” on the benefit “by 10% and [then] localise it”. This rings two alarm bills. The first is that this formulation sounds like an invitation to ask town halls to redesign a benefit of fiendish complexity. It was my unfortunate calling in my first job to spend a whole year writing a book about this obscure corner of social security, and – trust me – councils will struggle to do redesign the system. Housing benefit processing was an absolute shambles when town halls were given the “freedom” to implement it in different ways, but today’s council tax move appears to be a far wilder proposal than that. They are, it seems, being asked this time to redesign not just the implementation but the structure of one corner of the nationwide income safety net.

    The second and louder alarm bell rings an echo of the poll tax. Thatcher’s hubristic levy had two flaws which the council tax corrected – the one which got the publicity was the disregarding of property size; the one which caused the chaos on the ground was the requirement for councils to chase the poorest households for modest amounts of money, for which the ultimate penalty for failure to pay was a prison sentence. If councils are being told it is now up to them to pay the bills of the poorest with a pool of funds which we already know will be 10% short of what is required, they will once again be forced to chase the poor in an identical way. With typical council tax bills having been well over £1,000 for several years now the financial effect will be, very roughly, like asking every poor house to fork out for a second TV licence. And one need only scan the court-in-brief section in any local paper to see that TV licenses already land a great number of families in court.

    In case it seems like my comparison with the poll tax is alarmist, recall that the social security system back then notionally provided for 80% of the bill for every poor family. It was not the full bill but merely the residual 20% that led to all the trouble. Households going missing, protesters not paying, and of course riots on the streets. Perhaps things will be easier this time around because it will be for individual council leaders, as opposed to one iron lady, to make the case on the detail. Localism may dissipate the rage. But I would not be so sure. Perhaps, the coalition have some cunning plan up their sleeve, which I have failed to spot, and which will be set out in due course. I’m not banking on that either, though. If we really are looking at poll tax mark II then, as well as a riot I would predict fiscal anarchy in the UK.


    Crystal Balls

    October 20, 2010 at 6:47 pm

  6. This talk of ‘benefit cheats’ is not only stigmatising, it is slanderous, too

    Before we get too animated about the Tory suggestions for dealing with benefit cheats, let’s remember that all governments talk like this. George Osborne wants a three-strike rule which will deny benefits to people who have repeatedly been found guilty of fraud.

    How this will work is opaque, since you have to assume that these fraudsters, for all their dishonesty, still don’t have any money. So they are either to starve, or get food stamps, both of which would represent a radical new direction for welfare policy. But during the election campaign, it was leaked (the technical term is “accidentally on purpose”) that Jim Murphy, then Scottish secretary, had suggested to Ed Miliband that people who informed on benefit cheats should get a share of any cash they save the government. In politics, if you have a conversation about benefit fraud and you don’t sound like Rush Limbaugh or the Stasi, then you’re not doing it right.

    The reality of this “cost” never taints the political rhetoric in any way. The figure lost is £5.2bn, but that is fraud and error, which the relevant press officers always pronounce “fraudnerror”, as though they were the same thing. The true figure for benefit fraud is £1bn, and £500m for tax credit fraud. About 56,000 people are caught every year perpetrating a fraud, which is about 1.1% of those receiving benefits.

    The cost of errors dwarfs that of fraud: in the DWP it’s £1.1bn in official error, and £1.1bn in customer error. Within tax credits there’s an overall error figure of £1.6bn, over three times the fraud amount. HMRC doesn’t specify whose the error is.

    The government has suggested a £50 fine for customer errors that could reasonably have been prevented. That is a brilliant idea, but it must be matched, for any semblance of fairness, by compensation from the government when the error is theirs. So far we are only dealing with money lost by the government, not money it saves by underpayments. This is interesting: £1.3bn is saved by the DWP, not because people don’t claim what they’re entitled to, but because people do claim and the department calculates their entitlement wrongly. If you combined all the official errors by the DWP and HMRC and then undertook to rectify them – well, it would be irresponsible to talk about national bankruptcy, but we’d be kissing goodbye to our empty aircraft carriers, for a start. And that’s just relating to benefits – the income tax errors in the government’s favour, which predominantly hit the low paid, are even more scandalous.

    Anyway, back to these fraudsters, who are the least costly element of a leaky system, but nevertheless transfix the political imagination as though they were masterminds of cunning and audacity, whose long game were to destroy the fabric of society altogether. The department doesn’t break the figures down by type of fraud – whether it’s mainly undeclared cash-in-hand work, or couples pretending to be single, or criminal gangs stealing identities – but they do give some sense of scale.

    The average fraud per prosecution was £11,000, but only one in 10 fraudsters is prosecuted because most misdemeanours are too small to warrant it. There were 360 convictions for frauds of over £50,000 last year, but that is a tiny proportion of the total. To notch up that much, you would have to be doing something quite major, such as cloning an identity for housing benefit or faking a disability over a very long period.

    Around 90% of cheats are either given an administrative penalty or a caution – and the average frauds that bring about these sanctions are, respectively, £1,100 and £1,200. So imagine you did two hours a week cash-in-hand work over the 16 hours you’re allowed: and over three months, your fraud amounted to £1,000, since you shouldn’t have been on jobseeker’s allowance at all. That’s what politicians should be asking us to envisage when they set upon this bugbear with their big sticks: people on very low incomes earning a very small amount extra and not declaring it. I am amazed that the figure for fraud is so low. When you consider the incompetence of the DWP and HMRC, you would be mad to declare a small cash-in-hand income to them. You’d probably find yourself not just having your benefits withdrawn, but also on an emergency code, erroneously charged tax that it would take you years to recover.

    There is a very important failure of governance here: people are being cheated out of benefits by an incompetent system, they are being threatened for their own mistakes and simultaneously screwed by the DWP, and 200 extra employees are being taken on as “anti-fraud” officers when the first priority of government should be that it has enough staff to get its sums right.

    But of course this is all common knowledge: nobody in government thinks of benefit fraud as a significant cost. It’s just a rhetorical twitch that they have. Osborne demonstrated neatly, yesterday, how the rhetoric works: he placed his welfare aims in the territory of stopping cheats, but the cuts he announced were nothing to do with fraud, they applied to all welfare claimants. This narrative tacitly turns everyone who claims welfare into a fraud. It is socially very divisive, it is stigmatising, it is subtly slanderous and it is immoral.


    Crystal Balls

    October 20, 2010 at 8:25 pm

  7. Spending review: What’s all the fuss about? Just you wait

    The price of everything was laid out, but not the value of anything about to be destroyed. The glee club on the government benches could hardly contain their delight. Even Iain Duncan Smith smiled as £18bn was hacked from his budget. How Jeremy Hunt beamed with pride at the 30% he had cut from the arts funds while gouging the BBC. What the governor of the Bank of England calls the “sober decade” began with unsuppressed smirks of satisfaction.

    These were cuts beyond the dreams of Margaret Thatcher, an £83bn shrivelling of the state drawn from a Chicago School economic blueprint. How cleverly the man who re-invented his party as nice, green, caring and socially concerned has used the crash to turn it into a radical neo-liberal cutting machine. What’s more, so far he has done it with public approval: 60% say this brutality is necessary.

    The ground was well tilled with text-book doublethink that stood the facts on their head. The broadest shoulders will carry the burden, the chancellor intoned over and over. Yet even the government’s own graph shows the poorest tenth losing a higher proportion of their income than the average – and every cut hurts them most. Months of stories softened up opinion, suggesting that all benefit recipients are scroungers with vast families living in mansions. One good anecdote beats dry statistics on poverty every time. So welfare cuts are popular – for now.

    How brilliantly the public sector was turned into public enemy number one, lazy and complacent, Eric Pickles said. So its pay and pensions could be cut with the public unaware of Office for National Statistics figures showing how public sector pay had lagged behind the private sector for a decade; a few overpaid public executives provide anecdotes of greed to disguise mere facts.

    When the chancellor heralds the generosity of an increase in child tax credits, few notice that their £30 extra a year, less than a loaf of bread a week, is wiped out by the £600 a year extra that low-paid working parents must pay in childcare.

    The public will approve, at first, YouGov expects. A bounce in the polls may be the first reaction to popular cuts in waste, welfare and the workshy. Ben Page of Ipsos Mori says the coalition is betting that 70% of voters will not be much affected, at first.

    If you are not low-paid, not dependent on housing benefit or reliant on social services to help care for your mother, and not on sick pay, you may not notice anything – at first. If you are not a sixth-former from a poor family losing the £30-a-week allowance to keep you in education, if you don’t use buses, whose subsidies are cut, and you don’t work in the public sector, losing 10% in frozen pay and pension contributions, then at first you may think the four horsemen of the apocalypse have passed you by.

    Most people will keep their jobs, enjoy low interest rates and wonder what the fuss about cuts was all about – at first. That is the coalition bet: people just won’t know or care about the struggling third of their fellow citizens who lose out right away. That’s what first-past-the-post electoral arithmetic does: think Guildford and Harlow, never mind useless votes piled up in places that will never vote anything but Labour.

    But will it last when reality bites by the middle of next year, when a million more are losing jobs? Newspaper anecdotes of a less favourable kind will show pensioners losing housing benefit evicted from their homes. Sick people queueing for admission on A&E trolleys will suddenly show that NHS ring-fencing was bogus, its inflation needs far higher than the tiny extra it was given. Try closing even one under-used library and hear the local protests, let alone leisure centres, school sports and youth clubs. Sure Start is not saved: without ringfenced funds, it will be left to local councils to wield the axe. Schools will cut teachers and teaching assistants, while a 10,000 cut in police will be blamed for any local crime. The stories of waste and welfare cheats will soon turn to horror tales of cuts. Will the comfortable 70% care then? You bet they will.

    The “big society” is now an empty aircraft carrier with no jump-jets. The voluntary sector is in no state to fill the void, with many charities near bankrupt. That £100m “transition” money Osborne gave will not even cover their redundancies and closures: transition to what, the National Council for Voluntary Organisations asks? A third of their funds – £13bn – come from government, mostly from local authorities.

    But localism triumphs, the Liberal Democrats boast. That is their proud contribution – devolving the axe to local authorities. Pickles has told councils all targets are gone, freedom is theirs at last! Freedom to take the blame, obliged to cut almost everything not cemented to the floor by law. KPMG said that some councils would go bust. Many companies and charities depending on councils will also collapse. Meanwhile, rejoice, for the bank bonus season is upon us soon.


    Crystal Balls

    October 21, 2010 at 8:54 am

  8. Bollocks


    October 21, 2010 at 9:41 am

  9. The Bullingdon boys want to finish what Thatcher began

    The savagery unveiled today by George Osborne doesn’t only amount to the deepest programme of public spending cuts since the 1920s. As the chancellor’s fog of spin started to clear, the scale of the political ambition behind them also became apparent. The Tory-led coalition is using the economic crisis not only to rein in the state, but to reorder society.

    This is to be Britain’s shock therapy. It is the culmination of the Conservative project to dismantle the heart of the welfare state – or, as Osborne put it today, to “reshape” public services – that began more than 30 years ago.

    Neither the Conservatives nor their Liberal Democrat cheerleaders have a mandate to do any such thing – or for the string of decisions they have handed down in blatant violation of pre-election pledges, from the abolition of universal child benefit to the privatising top-down transformation of the NHS. This is what most people at the May general election in fact voted against.

    So coalition leaders have used the absurd claim that the country is on the brink of bankruptcy to force through an array of sweeping changes, any one of which would normally be the focus of a prolonged political battle. It is a kind of political coup, and the result has been policymaking chaos, with a 16% cut in the BBC’s budget imposed in the middle of the night and a Ministry of Defence deal that promises aircraft carriers without any actual planes.

    But when it comes to choreography, the Bullingdon boys, Osborne and David Cameron, a former PR executive and a master of the darker political arts, have played a blinder. Months of leaks of staggering cuts and carefully timed announcements of raids on middle-class incomes, from child benefit to tuition fees, were used to soften up the public for today’s package with the preposterous theme of “we’re all in this together”.

    It got to the point where some coalition supporters even started to suggest this was actually a sort of leftwing administration, while Nick Clegg was regularly wheeled on to bolster the coalition’s claim to progressiveness and rightwing commentators grumbled that there was to be no overall cut in cash spending at all.

    Now the brutal reality has been spelled out. Government departments will in fact take an average hit of 19% in real terms over the next four years. The heaviest cut, however, of at least £18bn, is to welfare, targeted on the poorest in the country.

    This was the moment in Osborne’s otherwise polished peroration when he started to gabble, as the chancellor rushed through a series of technical announcements, the impact of which will be anything but technical. They include a new one-year cutoff to the revamped incapacity benefit, another squeeze on housing benefit and a sharp net cut in child-related tax credits.

    It is women, families and the sick who, it turns out, will be picking up the bill for the bank-triggered meltdown, along with low-income teenagers and public sector workers in their millions – while Cameron and Osborne are hoping local councils will take the blame for their 30% cut, universities for the 40% bite taken out of higher education funding and local operators for the 20% cut in bus subsidies.

    When it comes to welfare, the calculation is cynically straightforward. The poorest and most vulnerable have least political clout, while the military are cosseted and the majority of pensioners, who are highly likely to vote, are treated with kid gloves by comparison.

    Osborne’s insistence yesterday that those with the “broadest shoulders” would “bear the greatest burden” and that his cuts would hit the richest hardest is risible. A similar claim at the time of his emergency June budget was shown in short order to be the opposite of the truth.

    The chancellor’s own figures show that the poorest 10% will bear the largest share of yesterday’s spending review announcements. Even when all tax and spending measures are taken into account, they come off the second worst of all income groups – and that is only because the government calculation boosts the impact on the top 10% by including Labour’s 50% tax rate.

    When it comes to the seriously rich, of course, the coalition’s cuts and tax changes hardly register at all. Osborne’s bank levy barely matches the cut in child benefit, while corporation tax is to be reduced year after year. Those who actually caused the crisis that blew a hole in the public finances are being asked to pay almost nothing all.

    Meanwhile, close to a million jobs now stand to be lost as a direct result of the chancellor’s announcements in the public and private sectors. Potentially even more disastrously, by squeezing demand out of the economy Cameron and Osborne’s cuts risk tipping it back into recession, at a time when governments across Britain’s main trading markets are doing exactly the same thing.

    As the same IMF which last month backed the coalition’s cuts now argues, the level of fiscal tightening in Britain would cut growth sharply even if it were being done in isolation. In the context of Europe-wide austerity mania, the deflationary impact is likely to be much worse. If that then translates into lower tax revenues and higher unemployment, the government will have to make still deeper cuts or carry out a dramatic and humiliating U-turn.

    For the moment Cameron and Osborne are banking on the private sector to ride to their rescue, while relying on public acceptance of the endlessly repeated falsehood that Labour profligacy created the deficit the coalition is now having to clear up. In reality, the ballooning of Britain’s budget deficit mirrors the average deficit rise across the 33 most developed countries, from 1% of GDP in 2007 to 9% in 2009, as tax receipts slumped and dole payments mushroomed in the wake of the 2008 crisis.

    But Labour’s ability to champion the growing public opposition to cuts, along with an alternative of public investment and growth, remains hobbled by its own pre-election commitment to halving the deficit according to an arbitrary timetable, rather than the state of the economy – which Osborne tried to exploit today. That will have to be overcome quickly if yesterday’s class-driven folly is to be derailed.


    Crystal Balls

    October 21, 2010 at 10:02 am

    • £7 billion was shared by bankers in a fabulous bonus frenzy – the same amount as was slashed yesterday from an already decimated welfare state.

      £6 billion Vodafone tax bill cancelled by offshore-trustafarian George Osborne.

      £120 billion gypped from UK taxpayers by Osborne and his super-rich friends.

      £850 billion gifted to wealthy banks by the UK taxpayer.

      But the poor and the vulnerable must absorb this monumental corporate welfare bill.

      Perspective: the above amounts to £983 billion of public money transferred to the very richest in society. This equates to 89,300% of the £1.1 billion paid to disabled people who are now targeted by the state as potential fraudsters.


      October 21, 2010 at 2:08 pm

  10. No more of the racist term “gypped” on this site in the future please its highly offensive to us.

    Lowestoft's Finest

    October 21, 2010 at 2:31 pm

    • A most unfortunate oversight on my part. My most sincere apologies, Lowestoft’s Finest.


      October 21, 2010 at 2:59 pm

    • I agree, and no stuff about the Poles.

      Crystal Balls

      October 21, 2010 at 3:40 pm

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