Two thirds of welfare cuts will fall on working families

Nearly two thirds of the £15.9 billion of welfare and benefit cuts announced in the emergency budget and spending review will hit working families, undermining government claims that they are ‘making work pay’, the TUC reveals today (Monday).

TUC analysis of welfare changes for working age people shows that working households will suffer a loss of around £9.4 billion – nearly twice the level of losses for non-working households (£5.9 billion).

The analysis, which breaks down the welfare cuts (as well as welfare increases such as child tax credits and discretionary housing benefit payments) by working and non-working household, shows that 69 per cent of the policies announced in the spending review hit working households, at a cost of £4.5 billion.

The majority of the working age welfare cuts relate to benefits for children so working families will bear the brunt of the cuts, says the TUC.

This research follows a TUC study last week which found that departmental spending cuts will hit the poorest households 15 times harder than the richest 10 per cent, and analysis from the Institute for Fiscal Studies (IFS) which found that the tax and benefit changes announced in the budget and spending review were regressive.

With policies such as housing benefit cuts hitting low income households hardest and more than half of all poor children living in working households, the targeting of working households is likely to increase child poverty amongst working families, the TUC says.

Other key welfare cuts such as increasing the rate at which tax credits are withdrawn and reducing the childcare element of working tax credit will also act as a disincentive for low income households to work more hours or gain a second income, directly contradicting the government’s aim of ‘making work pay’, the TUC believes.

TUC General Secretary Brendan Barber said: ‘Ministers say that their welfare and benefit cuts are fair and justified because they will make work pay.

‘Polls show that they have already lost the fairness argument. Now we show that it is working families – both the poor and the squeezed middle – who are the big losers from welfare cuts, not the alleged workshy scroungers that the government claims to target.

‘These deep rapid cuts – concentrated on families with children – weren’t in any election manifestos. The speed and scale of the cuts are not an economic necessity, but a political choice. No-one voted for these cuts to their living standards, more child poverty, mass job losses and a ‘get out of tax free’ card for the banks.

‘The government needs to reconsider its spending plans before it causes any more economic damage and pain to working families.’

NOTES TO EDITORS:

Annual working age welfare budget cuts to be implemented by 2014/15 by financial impacts for working and non-working households

Welfare changes by 2014/15	Amount cut (£millions)	Non-working	Working
Total budget cuts	£9,340	£3,946	£5,394
Percentage budget cuts		42	58
Total spending review cuts	£6,549	£2,005	£4,543
Percentage spending review cuts		31	69
Total cuts	£15,889	£5,952	£9,937
Percentage cuts		37	63

A full breakdown of the welfare cuts by working and non-working households is available at www.tuc.org.uk/extras/welfarechangesby2014-15.pdf

Source : TUC  

All TUC press releases can be found at www.tuc.org.uk

New Government Proposals on Welfare

This is taken directly from ‘The Coalition: our programme for government’ paper. It is still lacking a lot of details which need filling out, so a proper analysis can’t be made of it just yet. But it does show there are some major changes coming, which seem to be aimed at continuing to force people off incapacity benefits or training people on pointless courses for non-existent jobs through private companies. We should also note that there are massive plans to cut public spending and I think its safe to say, this is one area the government will be targetting.

The Government believes that we need to encourage responsibility and fairness in the welfare system. That means providing help for those who cannot work, training and targeted support for those looking for work, but sanctions for those who turn down reasonable offers of work or training.

• We will end all existing welfare to work programmes and create a single welfare to work programme to help all unemployed people get back into work.
• We will ensure that Jobseeker’s Allowance claimants facing the most significant barriers to work are referred to the new welfare to work programme immediately, not after 12 months as is currently the case. We will ensure that Jobseeker’s Allowance claimants aged under 25 are referred to the programme after a maximum of six months.
• We will realign contracts with welfare to work service providers to reflect more closely the results they achieve in getting people back into work.
• We will reform the funding mechanism used by government to finance welfare to work programmes to reflect the fact that initial investment delivers later savings through lower benefit expenditure, including creating an integrated work programme with outcome funding based upon the DEL/AME switch.
• We will ensure that receipt of benefits for those able to work is conditional on their willingness to work.
• We support the National Minimum Wage because of the protection it gives low-income workers and the incentives to work it provides.
• We will re-assess all current claimants of Incapacity Benefit for their readiness to work. Those assessed as fully capable for work will be moved onto Jobseeker’s Allowance.
• We will support would-be entrepreneurs through a new programme – Work for Yourself – which will give the unemployed access to business mentors and start-up loans.
• We will draw on a range of Service Academies to offer pre-employment training and work placements for unemployed people.
• We will develop local Work Clubs – places where unemployed people can gather to exchange skills, find opportunities, make contacts and provide mutual support.
• We will investigate how to simplify the benefit system in order to improve incentives to work.

Taken from HM Government website

Carers on the march for rights

Carers from across Wearside will march to Parliament today to fight for their rights.

Representatives from Sunderland Carers’ Centre will present a petition at Downing Street before MPs meet to discuss issues facing the city’s unpaid army of carers.

Protesters are arguing against the carers’ allowance which they say is too low and doesn’t recognise wider issues facing carers.

About 300 carers in Sunderland who look after a disabled, frail or elderly loved one have signed the petition, which is part of a national campaign organised by the Carers’ Poverty Alliance.

Among them is Linda Gardner, 52, who cares for dad Robert, 84, who has cancer of the pancreas.

“We would like to see a fairer deal for carers,” she said.

“If I claimed the carers’ allowance, money would actually be taken off dad, which wouldn’t be fair.”

The mum-of-two also said more needs to be done to physically support carers.

She said: “Home help is available, but it is only for a few hours a week and it’s expensive. It was going to cost us £70 to have someone come and switch on the microwave for dad.”

The carers’ allowance is currently £53.10 a week. However, if you receive certain other benefits at the same amount or more, you are not eligible for the funds.

Fraser Kemp, MP for Houghton and Washington East, will be among MPs from across the country who will meet at Westminster to discuss issues affecting carers.

Mr Kemp, who has held surgeries for carers in the past, said: “The work that carers do on Wearside is of tremendous value and we have one of the highest proportion of carers of anywhere in the UK.”

About 11 per cent of Wearsiders – a total of 32,000 people – are carers.

Taken from Sunderland Echo

Poor paying for energy profits

Crippling energy costs hit the poor and elderly as companies cash in on cold weather

Households across the UK are facing record energy bills this month as a result of the recent freezing weather conditions. After one of the coldest Januarys in over 25  years gas and electricity bills are set to rise from an average £156 to £237 – a massive 52 per cent increase, according to official figures, with many people falling further into debt in order to pay.

The extreme weather during the first month of 2010 saw average temperatures slip below 3c with widespread heavy snowfall and sharp frosts across most of the UK. According to the Met Office the minimum temperature recorded was (minus) -22c. The extraordinary weather over the winter period is estimated to have caused a 30 per cent surge in energy consumption, as families and the elderly struggled to cope with the freezing temperatures.

Economically it means the UK’s 27 million households will pay out a total of £6.1 billion on their energy bills for the last month, an increase of £1.89 billion despite the decrease in the cost of fuel. Wholesale gas prices fell by 60 per cent during 2008/9, but the savings have not been passed on to consumers with customer bills being reduced by less than ten per cent. Critics argue that the major energy suppliers are waiting until the summer to bring down prices rather than risk a cut in profits during the peak energy consumption over the winter months.

The UK’s largest energy supplier, British Gas with 15.7million customers, is set for a 50 per cent rise in annual profits to more than £500million, while Scottish and Southern Energy’s profits rose by 36 per cent in the past six months. Thousands of elderly, meanwhile, have been unable to afford to keep warm during the coldest spell in 30 years. One energy expert commented “There is still scope for significant price cuts for both gas and electricity to ease the burden on hard-pressed households. A lot of people, especially the old, poor and vulnerable, were already struggling to pay their bills even before the sharp drop in temperatures and they need help.”

There were 36,700 more deaths among the elderly during winter than in warmer months, according to the Office of National Statistics, up 12,000 on the previous year. At the same time there are millions of pensioners among the 5.4million who are in fuel poverty. The Age Concern and Help the Aged charity condemned the rise in winter deaths, which it links to ‘cash-strapped older people turning down the heating’. Energy watchdog group Consumer Focus commented: ‘All of the suppliers will be enjoying rocketing profits while millions of consumers worry about how to afford to keep warm.’

The windfall for gas and electric companies comes on the back of an the energy regulators Ofgem critical report that found energy suppliers waiting 65 days after putting up prices before informing customers of the increase, leaving many in the dark over the true cost of their energy consumption.

Taken from Freedom

Britain ‘most unequal society in western Europe’

A high-profile philanthropist has labelled evidence that poverty affects children’s ability to do well in school a “a tragic indictment on modern society.”

Sutton Trust chairman Sir Peter Lampl described as shocking the findings of a study by his organisation to be released on Monday which show that the language skills of the poorest children in Britain are almost a year behind their richer peers.

Of 12,644 five-year-olds who were monitored in 2006 and 2007, just 45 per cent from the poorest fifth of families were ready to read daily by the age of three compared to 78 per cent of children from the richest fifth of families.

The study also showed “the stark educational disadvantage experienced by children from poorer homes before they have even stepped into the school classroom” – the poorest parents in the survey had no GCSEs at grade C or above, while four in five of the richest were educated to degree level.

Sources said the report confirmed that after 12 years of Labour government Britain is the most unequal society in western Europe.

Against a background of over half a billion pounds worth of cuts in higher education – unparalleled in the public sector – Mr Lampl warned against reducing funds that helped disadvantaged children to go to university.

“It is a tragic indictment on modern society that our children’s future life prospects depend so much on their family background, not their individual talents,” he said.

But he also claimed that “good parenting” – such as reading to children on a daily basis, or taking them to libraries, museums and galleries – could “overcome some of the negative impacts that poverty can have on children’s early development.”

The study found that wealthier parents with more free time would be more likely to take their kids on cultural activities.

Left-leaning think tank Compass highlighted the way in which poverty and wealth is inherited by subsequent generations last month.

It found that university graduates are disproportionately more likely to be from better-off backgrounds.

A mere 4 per cent of pupils eligible for free school meals go on to higher education, compared to 33 per cent of those who are ineligible.

Taken from Morning Star

Nursery costs go through the roof

Some parents are paying more than £22,000 a year for nursery places as the cost of childcare continues to rise faster than inflation, the Daycare Trust has warned.

Sending a child to nursery in the country’s most expensive areas can now cost more than private school fees, the trust claimed.

The cost of a nursery place for a child aged over two in England increased by 5.1 per cent last year – almost twice the rate of inflation.

A full-time nursery place for a child under two cost an average £176 per week, or £9,152 a year.

In London the figure rose to £218 weekly, but some nurseries in the capital charged £425 a week – the equivalent of £22,100 a year.

Average gross weekly earnings nationally are £489.

The rises were condemned by Daycare Trust joint chief executive Alison Garnham as increasing the burden on families already hit by the recession.

Taken from Morning Star

Rich-poor divide ‘wider than 40 years ago’

The gap between rich and poor in the UK is wider now than 40 years ago, a government-commissioned report says.

“Deep-seated and systemic differences” remain between men and women and minority groups in pay and employment, the National Equality Panel found.

It said in areas such as neighbourhood renewal, taxes and education, policy action was needed to limit inequality.

The issues raised would need “sustained and focused action”, Equalities Minister Harriet Harman said.

“But for the sake of the right of every individual to reach their full potential, for the sake of a strong and meritocratic economy and to achieve a peaceful and cohesive society, that is the challenge that must be met,” she added.

Earning power

Apparent discrimination against people from ethnic minorities was revealed in the report, with those from nearly every minority group less likely to be in paid work than white British men and women.

The panel – set up by the government in 2008 – found that despite women up to the age of 44 having better qualifications than men, men were still paid up to 21% more per hour.

But the authors pointed out that some of the greatest differences come within social groups.

Among women, many work part-time, earning less than £7.20 an hour, much less than the median pay of £9.90 across the country.

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“Most political parties and people subscribe to the ideal of ‘equality of opportunity’,” panel chair Professor John Hills, of the London School of Economics, told the BBC.

“The challenge that our report puts down to all political parties is how do you create a level playing field when there are such large differences between the resources that different people have available to them.

“Things that allow you to buy a house in the catchment area of a good school or allow you to help your children get on the housing ladder. These are very big differences.”

The study said that the type of job and pay a parent had could have a cumulative effect throughout a person’s life, setting them on “tracks that make all sorts of differences”.

By retirement, the difference between rich and poor can be “colossal”, the report added.

The panel pointed out that half of those who have worked in the top professions have net assets worth more than £900,000, while a 10th of those who have had unskilled jobs have property, savings and possessions worth less than £8,000.

BBC social policy correspondent Gillian Hargreaves said the report would make “awkward reading for the government” as Labour had made tackling inequality a priority.

Theresa May, shadow minister for women and equalities, told the BBC that Labour’s policies had failed.

“It is shocking that after 13 years of a government that wanted to focus on child inequality, we’re still in this situation,” she said.

“Labour has had a one-dimensional approach, looking at the symptoms, not the causes. For example, one in six children are growing up in a workless household. We need policies that can make equality a reality.”

The Liberal Democrats’ children, schools and families spokesman, David Laws, said Gordon Brown’s government had “run out of ideas for tackling the lack of opportunity for so many children and the chasm that separates the rich from the poor”.

Full report – An anatomy of economic inequality in the UK [4 MB]

Summary – An anatomy of economic inequality in the UK [1.79 MB]

Taken from BBC News

Thousands of children in poverty, new figures show

Thousands of youngsters are living in poverty in the North East, according to a children’s charity.
Figures released by Save the Children show 73,000 youngsters in the region are living in poverty-stricken conditions, without enough food or warm clothes.

The statistics stress the challenge facing the Government as it tries to live up to Tony Blair’s promise to end child poverty by 2020.

The study also shows that severe child poverty actually increased during the “good times” of prosperity before the credit crunch.

In the pre-recession boom, a further 260,000 children throughout the UK were plunged into poverty, taking the national total to 1.7million.

Fergus Drake, the charity’s director of UK programmes, said: “It’s shocking that at a time when the country was experiencing unprecedented levels of wealth, the number of children living in severe poverty – we’re talking about a winter coat, a bed and other day-to-day essentials – actually increased.

“Measures introduced by the Government in the last two years have managed to prevent the numbers spiralling even higher,w but with unemployment expected to rise, there is a danger that severe child poverty will increase even further.”

The charity’s study, based on the Government’s annual Family Resources Survey, revealed 14 per cent of North East children are classed as being in severe poverty – slightly higher than the national average.

The Government classes children as being in “severe” poverty if they are in a household with an income of below 50 per cent of the average income, after housing costs are factored in, can cannot afford at least three everyday goods and services.

Taken from Sunderland Echo

More families cannot pay their fuel bills

A combination of cold weather, high gas and electricity prices and mounting pressure on disposable incomes could see a substantial rise in the number of families falling into debt with energy companies, consumer groups are warning.

The alert follows a report by the energy industry regulator, Ofgem, last week, which showed large numbers of people getting behind on their gas and electricity bills.

Ofgem said that even before the winter began, more customers were getting themselves into financial difficulties. There was a 13 per cent increase in the number of electricity customers entering into a new debt arrangement with their supplier in the third quarter of last year, Ofgem said, and a 21 per cent increase in such arrangements between households and their gas suppliers.

In addition, the average level of debt of customers in difficulties was 20 per cent higher than a year previously, and there has also been a substantial increase in the number of people with debts of £600 or more.

uSwitch, the price comparison site, warned that regulators needed to take the issue of debt more seriously, but also advised customers to switch supplier more regularly in order to find the cheapest possible deals. One problem is that the customers most likely to get into financial difficulties also seem to be those who find it difficult to pay their bills by direct debit, an arrangement for which most suppliers offer discounted prices.

“The recession will have played a part, but Ofgem cannot afford to brush the cost of energy under the carpet. Energy bills are substantially higher – at £327 or more – than they were at the beginning of 2008, even after suppliers cut their prices last year, and this will have had an impact on the ability of many households to afford and pay for their energy,” said Thomas Lyon, an energy expert at uSwitch. “These debt numbers could get worse as we are in the middle of a bitter winter which could add an extra £60 on to our next quarterly bills because of the extra heating and energy we have all had to use – this will hit those who pay by cash or cheque particularly hard.”

Taken from The Independent

‘We’re losing child poverty battle,’ charity warns

The fight against child poverty has “slid into reverse” with more than 1.7 million British youngsters missing out on enough food and clothes, Save the Children has warned.

Evidence from the charity showed that England has been worst hit by the increase in severe child poverty, with more than 1.5m children now living in families earning 50 per cent below the average income.

“Measuring severe child poverty in the UK reveals that 13 per cent of the UK’s children are now living in severe poverty and shows that efforts to reduce child poverty have not only stalled but have slid into reverse,” a Save the Children spokesman said.

Evidence showed a sharp increase in severe poverty even before the recession, with an additional 260,000 children plunged into severe poverty during four years of economic boom before the recession hit in 2008.

The report also showed that Pakistani, Bangladeshi and black African children were around three times more likely to be in severe poverty than their white counterparts.

Taken from Morning Star