Category Archives: benefits

Food banks aren’t needed because some people are obese

Lord Prior of Brampton, Minister for NHS Productivity, has been quoted as saying that there is no link between between food bank use and the changes in benefits policies. He has also noted that it’s strange that people are using food banks while so many people are obese.

Former investment banker, Lord Prior, was taken to task by numerous food banks and the Arch Bishop of Canterbury, who noted that between 35 and 45 percent of visitors to food banks said that they were there because of benefit cuts or sanctions leaving them without any food to eat.

Reasons for food bank use – Trussell Trust

Food bank use in the UK has increased massively over the past few years, with the Trussell Trust giving out 40 times more emergency food packages than in 2008.

increase in food bank use – Trussell Trust

It’s not surprising to see the wealthy elite being occasionally ignorant of the use of food banks. For example, Michael Gove claimed that food bank use was just due to poor money management, and Tory Peer Baroness Jenkin claimed the poor should just learn to cook porridge. But for a Health Minister to equate obesity with a lack of poverty is either absurd ignorance or pure evil. Mwhahaha.

Autumn statement has numerous hidden evils

When George Osborne stood up in front of parliament to give his budget speech, he only spoke about the good things he did (or rather the bad things that he had threatened to do but then changed his mind in the face of overwhelming public objection). For some reason, he didn’t mention all of the evil things that he is doing in parliament – instead he published those in an 154 page document. Here’s some highlights of the evil buried deep in the document;

When students took out their loans, they signed up to a set of terms and conditions which described how much they would pay back and when they would pay it back. The amount they would pay back in any year depends on how much they earn above a certain threshold in that year, and that threshold increases with inflation. Except the government announced yesterday that they are changing the terms and conditions for people who already have taken out the loans to freeze that threshold rather than increase it with inflation – resulting in students having to pay significantly more of their wages in student loan repayments. If a commercial company changed loan conditions retrospectively, the FSA would stop them, but the government can do what it likes. Mwhahaha.

Whiplash injuries are thought to be a source of fraudulent insurance claims. Someone takes out their brake light bulbs, then slams on the brakes, and then claims for pain and suffering from whiplash injuries when the car behind hits them. This is thought to cost the average motorist £50 a year. In an effort to stop such fraudulent claims, the government is taking a sledgehammer to crack a nut. They are banning all claims for general damages (e.g. compensation for pain and suffering) in soft tissue injuries, and they are forcing anyone claiming under £5000 for an injury to do so in the small claims court – where they can’t recover any legal costs. So to stop fraudsters, innocent people are going to be out of pocket and under compensated.

Despite the high profile u-turn on withdrawing tax credits, a number of other changes are going on anyway. First of all, the tax credits are being withdrawn anyway, with people being switched over to universal credit, which will leave people £1600 a year worse off. Plus the chancellor will still cap child tax credit at two children, hurting families with more children.

At the moment student nurses get means tested bursaries to help them through their training. Nurse and midwife training takes 3 years, and typically has them working a 37.5 hour week during their training period, spending time working on wards in addition to lectures. So there’s little free time for a part time job on the side. But they can at least walk in to a job paying £21,692 a year at the end of it. However, thanks to changes in the autumn statement, nurses will be forced to pay for their training, so now they will start work with £50,000 in debt to pay off too.

Deficit up again – blame it on the poor

On Friday the government announced that the deficit was up to the highest monthly level since 2009 – £8.6bn in October alone. This is in part because the UK economy is not particularly growing (inflation was negative last month). Unlike countries, such as the US, who have not engaged in harsh austerity, the UK economic recovery is on a go slow. Countries who have been willing to spend on capital projects have seen their GDP grow far faster than the UK. That means that we don’t have increasing taxes coming in to help balance the books.

Another reason for the increased deficit is pensions. While inflation was negative and wages are stalled, pensioners are taking an ever increasing proportion of the UK’s benefits bill. In order to secure the grey vote, the Tories promised to give pensions a “triple lock” whereby the state pension is guaranteed to go up by price inflation, wage inflation or 2.5% – whichever is greater. Pensions income is racing away from other income and other benefits. From April 2016, the state pension will be worth £119.30 a week (compared to £57.90 jobseekers allowance for a 24 year old for example). Pensions make up £95bn of the state budget thanks to the triple lock, and with people living longer and longer, that super inflationary increase is not going to help the chancellor balance the books.

But don’t worry – there’s a budget this week, and instead of keeping pension inflation in line with everyone else, or injecting work in to the economy, we can cut back some more essential services or screw the poor some more. Mwhahaha.

93% tax rate proposed by Osborne – for the poorest

George Osborne is out to prove just how much he despises the lowest paid with his new rate of marginal tax for people transitioning from benefits to work that ranges from 75% to 100%. Why haven’t you heard about the new tax bands? Well, it’s because tax in this country is ridiculously complicated, with income tax only making up about half of the deductions from your pay packet. There’s also national insurance, reductions in child benefit from 50k, loss of personal allowance from 100k, and more, meaning that the effective tax rate is much higher. This is known as the marginal tax rate, and it tells if your pay went up by £1, how much of it would you end up with in your pocket. The Telegraph recently calculated that we have 12 marginal tax bands;

Currently the highest tax rate is for people earning between £50k and £60k who also have 4 children – they pay 70% tax. That’s high compared to the 47% rate that the highest earners pay, but it’s not as much as the minimum 75% marginal tax rate that George Osborne wants to tax people who are on minimum wage.

So what is being proposed? If you are not employed, you get benefits from the state – income support, housing benefit. If you are employed and paid well, you do not get any benefits. Rather than there being an instant jump between the two where if you earn just £1 you lose all benefits, benefits are withdrawn in line with how much you earn. If for every pound you earned, you lost a pound in benefits, your marginal rate of tax would be 100% – i.e. you are not any better off for having earned that money. That tends to disincentive people from working, so we have a system known as welfare-to-work where people only lose a fraction of their benefits – for example losing 50p in benefits and income tax for every £1 you earn would put you on a 50% marginal tax rate. That’s still pretty high, but it’s not high enough for George Osborne. He wants to start the benefits cuts at 75p for every £1 earned, taking it higher if you receive more benefits. The Telegraph give an example of someone who works 35 hours a week on minimum wage. For every £1 extra that they earn, the government will take 20p income tax and 12p national insurance, and will take 48p in tax credit reductions, and 13p in housing benefit reductions. That leaves the person with 7p in their pocket for every £1 they earn. By contrast, every pound extra that George Osborne earns will net him 58p – nearly ten times as much as someone on minimum wage. Mwhahaha.

Osborne re-writing history

History is written by the winners, and re-writing history is exactly what the Tories are setting about doing. George Osborne has been questioned by the Treasury Select Committee today about his proposed changes to child tax credits. And the fact defying statement that he made was that we can’t complain because he told everyone that he would cut child tax credit in the run up to the election.

When asked about the cuts, Mr. Osborne claimed that during the general election the Tories had “provided a huge amount of information about these changes, more so than any other government, more so than certainly any Labour Chancellor”. However, during the general election when pressed about where the cuts would be, the Tories said time and time again that they had not decided yet where the £12bn cuts would come from;

When the Liberal Democrats leaked documents saying that there were plans to cut child tax credits, Mr. Osborne was quoted as saying “This is a three-year-old document of policy options that was commissioned by the Chief Secretary himself. We have not put into practice any of these options. We don’t support them. We didn’t support them. We don’t support them in the future”.

And when David Cameron was pressed on Child Tax Credit cuts, he repeatedly stated on television that he would not cut Child Tax Credit.

Yet despite all of the evidence that the Tories did not spell out where cuts would come from other than explicitly denying that Child Tax Credits would be cut, Mr. Osborne is now claiming to have not misled the public, and to have always been clear where the cuts would come from. Mwhahaha.

When pressed about the child tax credit cuts, he also told the select committee “People know what we’ve proposed and of course in the general election we made it very clear we needed to make £12 billion of savings from welfare, so it was also, you know, signalled in the general election campaign and, I seem to remember, heavily debated in the general election campaign”. So unless he is truly very very forgetful indeed, we have to assume that what he meant was that the general public should have seen through the lies told during the election campaign and assumed that he would cut the child tax credit anyway. And in that at least, he’s right – we should have.