November 1, 2010

On the shoulders of the vulnerable

Alan Rigg has just been assessed as 100 per cent fit for work even though he suffers from adjustment disorder, anxiety and depression.

He has apparently fallen victim to a government “savings strategy” geared for a society in which no human beings exist – just money, pie charts and business.

The coalition has launched plans to reassess everyone currently on incapacity benefit, with the intention of forcing those “fit for work” out into a non-existent jobs market.

Rigg’s health problems had been previously diagnosed by a psychiatrist and were certified by his GP as a “long-term underlying mental health condition.” He is also deaf in one ear, has osteoarthritis and a bad back and knees.

But under the national reassessment of incapacity benefit claimants’ ability to work, currently being trialled in Burnley and Aberdeen, he has been judged perfectly well enough to go out and get a job.

“The first questions they ask are – how did you get here and did you travel alone? You’re deemed fit to work because you either drove there or coped with public transport, heard your name being called, walked 30 yards to the room and sat for 40 minutes in their chair,” Rigg says.

“Apparently the fact that I have had a problem with standing, sitting, bending and kneeling for several years did not apply.”

Millions of others like Rigg now facing the anxiety of being forced to go through the box-ticking exercise to assess whether they “should” be working, under what is known as the Work Capability Assessment (WCA).

And there is good reason to worry. There have been cases of sufferers of Parkinson’s disease and multiple sclerosis, amputees and people with severe mental illness being found “fit for work,” with some even scoring 0 in a point-scoring system where a score of at least 15 is needed to prove that you are unfit.

Questions like “can you count back from 100?” and “can you walk 200 metres?” seem guaranteed to make sure that hardly anyone will qualify, with those who are mentally ill facing the greatest difficulty in ensuring they remain eligible.

Mental illness is notoriously difficult to assess and diagnose for even the most seasoned and experienced of professionals. As health charities have pointed out, mental illness can encompass a whole swathe of ability and disability, with symptoms varying from individual to individual – and for many sufferers, symptoms can vary from day to day.

“Basing an entire benefit on a point-scoring system rather than sound medical knowledge makes no sense,” says Rigg.

“Complex things that affect the mentally ill such as social situations, mood swings and emotions were not even discussed. Neither was my history of illness considered. Ticking boxes and deleting as applicable is not a ‘clinical examination’.”

A number of mental health charities have already raised concerns that the tests are too oriented towards assessing physical illness, and Mind has called for the test to be revised before it is rolled out nationwide.

The charity’s own figures show the majority of incapacity benefit claimants have mental health difficulties.

Richard Jones, 48, of Somerset, is one such claimant. He worked for the ambulance service before his acute clinical depression meant he needed to be signed off work in 1995.

He subsequently left the ambulance service but after a string of jobs it became all too clear that the deep-seated emotional problems brought on by his depression caused serious setbacks in his ability to work.

“I was very unhappy, tearful and suicidal at times,” he says. “I am still in this place now and have been fighting depression for years. I don’t think that depression ever leaves you.

“When the Work Capability Assessment was introduced it totally knocked me for six.

“I was given the impression that it had all gone OK. The way they inform you that it hasn’t is by letter. It’s outrageous. It just says that they will be stopping your incapacity benefit in a fortnight.

“If you have depression then one of the things you worry about is finance. I was in a hell of a state. I was feeling suicidal and this was like the final kick in the backside. The test is totally not right for people with mental health problems. It is literally costing lives.”

Jones had scored zero in the WCA, but those helping him prepare for his tribunal appeal felt his score should have been more like 20.

However, it’s not only the substance of the tests that has raised concern – the large amounts of money sloshing around in the background and the involvement of a privateer have prompted additional fears.

The government controversially decided that medical assessments would be carried out by a private company – Atos Healthcare, which is owned by parent company Atos Origin.

It has been employed on a £59 million contract from the Department of Work and Pensions (DWP) to carry out the reassessments. However this sum is only for the reassessments alone. The cost of the WCA contract itself is around £80 million.

Tony Greenstein of Brighton and Hove TUC unemployed workers’ centre is concerned that Atos’s profit motive could well colour how the assessments are carried out.

“The involvement and running of the programme by Atos is very important,” he says.

If it wants to keep its contract, a private company may well be under pressure “to fail as many people as possible” and is “unaccountable in how it carries this out.”

With the government determined to reduce the number of those who are claiming, “they don’t want assessments by doctors, still less one’s own GP,” says Greenstein.

The DWP says that health-care professionals who compile medical reports do not receive bonuses where DWP decision-makers have disallowed benefits. But the department does not hold any information regarding the amounts paid to Atos Healthcare staff.

Whether Atos itself awards bonuses to staff for “failing” claimants remains unclear. Despite several attempts by the Morning Star to contact Atos in order to clarify salaries or any bonuses it pays, no response has been received.

Although the DWP says that assessments are not target-driven, many are not reassured that the decisions being reached are the correct ones.

Stephen Dickinson suffers from mental illness and is unable to even speak on the phone due to his condition.

He was found not fit for work, but he questions why the health-care professional he saw was not a qualified psychiatrist or psychologist.

“My assessment was carried out by an Atos Healthcare doctor,” he says.

“I remain sceptical of his qualifications because he never explained what he was a doctor of.

“I still remain unsure how Atos have come to their conclusion. Should I ever need to, this will form the basis of any appeal I undertake.

“The assessment was basically him asking me the same questions that were on the form I had completed, as my condition was mental rather than physical.

“He told me that if I had indicated any physical ailments on the form I would have had to do some ‘exercises’ so he could assess my suitability for work.”

For those concerned about their benefit being snatched away from them there is some hope held out in the Welfare Reform Act 2007.

It requires that an independent review of any reform be brought before Parliament every year for the first five years of its operation.

The first of these independent reports will be carried out by Professor Malcolm Harrington, who will publish his findings before the end of this year and aims to assess the effectiveness of WCAs, but only time will tell what such a review will find.

While the coalition seem hell-bent on making “savings” from the most vulnerable in society, let’s not forget that billions of pounds’ worth of benefits go unclaimed every year – a fact well documented by the Citizens Advice and numerous charities.

So it seems that rather than the coalition taking the initiative to help the most vulnerable to claim their entitled benefits, it prefers doing what it does best – take every last penny from them until there’s nothing left to take.

 Source:     The Morning Star     – Will Stone   Sunday 31 October 2010

November 1, 2010

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.’


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

Source : TUC  

All TUC press releases can be found at

May 20, 2010

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

May 17, 2010

Stop Demonising the Unemployed

Unemployment figures were up to 2.5 million by the end of March, and there’s no reason to think they won’t get any higher: some estimates put them as high as 3.3 million by the end of the year.

As well as rises in unemployment over the past few years, there have been increased attempts on the part of capital to project an image of criminality onto the unemployed, with high-level campaigns targeting “benefit thieves”. Such campaigns have the basic effect of portraying the unemployed as lazy, scrounging criminals, in what seems like a more-or-less conscious campaign to undermine solidarity on the part of the rest of the working class.

For those lucky enough not to hang around in JobCentres, here’s what you have to do to get your £64 a week (£100 if you’re married). At first it’s suprisingly relaxed: you go to reception, get waved through by two or three security guards, sit in a waiting area for ten minutes or so, before being called over to sign on and have a ‘chat’ with your advisor. You’ll have been expected to fill in a jobsearch booklet, detailing all your efforts to find work. Your advisor will glance at it, and then you’ll be free to go. I’ve been signing on for a while, and have never once had my jobsearch checked in any meaningful way. It can happen though, and if they find it ‘unsatisfactory’, or if you’ve failed to fill it in at all, then they can, and often do, stop your benefit for a fortnight.

Incidentally, the waiting areas can be great places to meet people. Last time I was signing, I got talking to someone. He was going off his head because they were going to stop his benefit, predictably enough because his jobsearch wasn’t ‘satisfactory ’. The guy was pretty ill, and on heavy medication. He was terrified of becoming homeless. He was 65 years old. I eavesdropped on his interview when he was eventually called over. They gave him a week’s grace, and they spoke to him like he was a five year old. A few years ago, he would have been on Disability Benefit, and would not have had to put with such harassment and condescension. But these days Disability Benefit is being phased out, and is almost impossible to get on.

When you’ve been signing on for three months things start getting to be a bit more serious. You’ll probably be put on “intensive signing”, which means you’ll have to sign on weekly instead of fortnightly, and your advisor will look a little more closely at your jobsearch.

At further ‘stages’ in the process – you move up a stage every three months – you’ll be given various ‘offers’. Training courses, most of which are absolutely useless and are run by private companies, A4e being the most notorious example. These companies have zero knowledge of the issues facing the long-term unemployed, and the services they offer are completely useless in terms of getting any meaningful work. And things are set to get a lot worse. From October sections of the unemployed in Greater Manchester will be forced to take part in the proposed Work for Your Benefits scheme, where they will have to do full-time work whilst remaining on benefit money. Of course, with the new government, this may well change – but it’s unlikely to change for the better.

All of this doesn’t seem to be much more than a punishment system for those who for whatever reason can’t get a job. Claimants are demoralised and patronised, and are certainly not offered any meaningful help. The training that you can do outside of the JobCentre system is severely limited by the cap that is placed on the number of hours you can do if you are not to lose your benefits. Voluntary work – which any sensible system would understand to be the best place to gain new skills – is limited to registered charities. In dark moments I almost think that ultimately the benefits system would like to force inactivity: if you’re not actively seeking work, you shouldn’t be doing anything at all.

Traditionally the unemployed have been used in capitalism as a reserve workforce, to instil fear and discipline into the working population. That’s starting to change: we are increasingly portrayed as a criminal class to be feared and despised, entirely separate from the working class proper. Sometime in the last five years the term usually used for people who fiddle their benefits was changed from ‘benefit cheat’ to ‘benefit thief’. The DWP website claims that “those who steal benefits are picking the pockets of law-abiding taxpayers. In 2008-9 benefit thieves stole an estimated £900 million from public funds, that’s why we are determined to catch them”. They don’t mention that there’s an estimated £10.5 billion saved in unclaimed benefits each year. Nor do they mention how reluctant the DWP are to explain precisely what benefits you are entitled to. And they certainly don’t have anything to say about that pack of benefit thieves in Buckingham Palace, who with the Civil List have their very own, very high class benefits system.

On the Benefit Thief section of the DWP website, alongside the usual drivel about “hidden cameras and mobile surveillance”, there is an online form for the enthusiastic Benefit Snitch to fill in. It is remarkably detailed: it wants to know the victim’s NI number, their height, the colour of their eyes. It would be pretty funny if it wasn’t ever so slightly sinister. Who are these snitches who know the colour of your eyes? Just like with terrorists, the honest taxpayer in expected to see benefit thieves everywhere, and to dob them in at every opportunity. Far from being a criminal class, the unemployed are actually a scapegoat class: one more example of capital’s vicious tendency to set up the most vulnerable people in the country – migrant workers, asylum seekers, the ill, the ‘insane’, the list goes on – as hate figures.

Since Thatcher, and even more so since Blair, it is always automatically assumed that the unemployed quite simply don’t want to work. Blair and Brown were always droning on about “benefit culture”, about how a “life on the dole” would soon be impossible. They never say anything that since the all-out attacks on the industrial base in the 1980s there are massive areas of the country where work is quite simply not there, or that most of the “job creation” they talk about is either meaningless or illusory. It is worth repeating: the jobs are not there. The only sane response would be to accept that full employment is an impossibility, and to then start coughing up a decent amount of benefit money. And ultimately, an all-out critique of the entire ideology of work is necessary: of course, these demands are totally incompatible with capitalism.

The dole is essentially one of the front-line zones of capital, where we come face to face with the seething contempt that it holds for us. But we’re not taking it lying down. One of the most exciting developments for the left over the last year has been the massive increase in Unemployed Workers’ Unions throughout the country: groups have formed in Cambridge, Salford, Oxford, Sheffield and London. The Cambridge offices of A4e were picketed in January, and in March, London Coalition Against Poverty, the Disabled People’s Direct Action Network and Feminist Fightback organised a week of action against the Welfare Reform Bill.

Claimants are only able to be scapegoated because the public don’t know what the conditions for the unemployed actually are. The new campaigns can challenge this, and will lead to greater solidarity has between the unemployed and the wider movement. False images of the unemployed have to be challenged at every opportunity. Most important of all, Work for your Benefits, or whatever version of it Cameron decides to throw at us, must be treated in the same way that we treated the Poll Tax. Resistance to capitalism is slowly but surely increasing in intensity: the unemployed have a key role to play in the struggle.

Taken from the commune

May 12, 2010

UK unemployment increases to 2.51 million

The number of people unemployed in the UK rose by 53,000 to 2.51 million during the three months to March, official figures have shown.

The unemployment total is now at its highest level since December 1994.

However, the total number of people claiming unemployment benefit fell in April by 27,100 to 1.52 million – a sharper fall than expected.

The rate of unemployment remained at 8%, the Office for National Statistics said.

There was also a rise in the number of people classed as economically inactive – those out of work and not seeking work.

They rose by almost 100,000 to a record total of just under 8.2 million.

‘Big task’

John Philpott of the Chartered Institute of Personnel and Development said the latest data underlined how tough a challenge the new coalition government faced.

“The big task for the government is trying to stimulate growth while also cutting the deficit,” he told the BBC.

“There’s nothing to suggest we’re going to get a return to anything approaching full employment anytime soon.”

Taken from BBC News

May 2, 2010

Debt charity sees ‘sharp rise’ in people needing help

The Consumer Credit Counselling Service has said that it had seen a “sharp rise” in the number of people contacting it for help.

The debt charity said its helpline received 93,234 calls during the first three months of the year, 34 per cent more than during the same period of 2009.

The group warned that the high number of people who had contacted it for help with debt so far this year suggested that it would receive a record number of calls during the whole of 2010.

A total of 335,323 people contacted the group’s helpline last year, the highest number it had ever received.

External affairs director Delroy Corinaldi said: “The UK’s personal debt pain continues and this is even before the imminent public-spending cuts, so it is crucial that those who find themselves in this situation have access to free, impartial and independent advice in whichever way is best for them – online, face-to-face or over the phone.”

The freephone helpline is open from 8am to 8pm Monday to Friday on 0800 138-1111.

Taken from Morning Star

April 24, 2010

The Unemployment Business

The latest edition of Corporate Watch

It has almost become a self-evident truth that unemployment has been growing progressively over the last two decades, both in scale and in its significance for social and economic policy. How and why are often ignored but a vast industry to ‘manage’ this ‘crisis’ has developed. From flourishing private companies, such as A4e, contracted by the Department for Work and Pensions to deliver what Jobcentre Plus has apparently failed to achieve, through tens of subcontracted employment services providers, to a growing sector of so-called voluntary organisations that depend on this reserve army of unemployed people to source their ‘slave’ workforce. This double issue of the Corporate Watch Newsletter takes a look at this relatively new ‘unemployment business’; its protagonists, ideological, political and economic premises and how it is being utilised by the New Labour government to dismantle what’s left of the welfare state.

The ‘unemployment crisis’ has certainly been exacerbated by the recent economic downturn, with many employers going bust, but that’s not the whole story. Many big businesses have also exploited the current climate to push for compulsory redundancies. More importantly, the recession and the rising number of jobless people have been skilfully employed by politicians and government officials. By introducing new schemes and increasingly coercive measures to ‘help’ the unemployed get back into the job market, they have put yet another nail in the welfare state’s coffin.

The first article, The Welfare Crisis, discusses these deployments in more detail, providing some historical background on New Labour’s welfare reforms. Two other articles take an in-depth look at the New Deal programmes, both old and new, which have been at the core of these reforms, providing some new details and figures about the winners and losers, or the private contractors and their victims. The voluntarism business is discussed in depth in a separate article, again with some interesting details and figures. These are complemented by a shorter article on prison slave labour, which bears striking similarities to the increasingly coercive benefits and employment system, both in how it is working out and in the reasoning behind it.

Readers may notice, or be annoyed by, the rather excessive use of inverted commas in most of the articles. This is because one of the aims of this issue is not only to demystify the business jargon used to talk about employment and benefits, but also to pause and question the official terms and euphemisms that have come to be used by almost everyone without much questioning. To that end, we have included a list of the most common words and terms in this ‘benefits newspeak’, along with their real meanings.

Our other aim of this issue is to highlight how the reformed welfare system is being used by the state and the market for social control. During interviews conducted for the purpose of producing this newsletter, one of the “Jobcentre victims,” as he described himself, commented: “If they gave the money they spend on finding work for people to those people [on the dole], there wouldn’t be a crisis, would there?” No, there probably wouldn’t but, of course, it’s not only about money. Keeping people busy with work or looking for work also serves another political agenda: preventing time for politics, uninstitutionalised creativity and other ‘dangerous’ activities.

With all the talk about ‘flexibility’, people nowadays appear to have less freedom to choose what they really want to do, particularly those with less marketable skills. Forcing people to do whatever is available on the job market to survive means subjecting them to ruthless market mechanisms (everyone seems to accept terms like the ‘labour market’ as normal!). We have included an article about the rather small-scale acts of resistance by the unemployed and benefit claimants, but we are aware that much more could, and should, be done. We hope this issue is a useful contribution to this growing movement.

The rest of the magazine can be found online here and a full PDF here

April 24, 2010

How I learned to stop worrying and love the benefits cheats

I’m sure everyone’s seen the adverts. They’re on TV, in newspapers, on bustops and on the sides of the buses themselves. The “We’re closing in” ones designed to make so called “benefit thieves” look like right villains. Anyone who’s claimed benefits in the last few years might know too how unpleasant an experience it has become now with a mix of intimidation and surveillance everywhere in the system. There’s even handy phone numbers so that you can grass your friends, families, neighbours, or even total strangers.

Alister Darling and those two brain caterpillars that control you. You are not going to enjoy this…

I fully support workers who cheat the benefits system! There! I said it! I’m not suggesting for one moment that I personally cheat the system. I’m paid by BACS, directly to my credit union account. The government, sadly, knows exactly how much I earn and in their infinite wisdom, believe that I £4k a year in wages is enough to live off without support other than £60 of my rent paying. More’s the pity.

Those that have found a way to fiddle the system. Good on you!

We in the UK have some real drains on our system. They don’t live in council houses on estates, or come from abroad (who are actually denied all state welfare, despite BNP propaganda saying otherwise). They live off us whether we like it or not and they’re taking hundreds of billions a year.

Drains like Fred Goodwin, ex-CEO of Royal Bank of Scotland and one of the biggest causes of the recession, that’s put millions of people worldwide on the dole. He’s only in his 40’s, but he’s retired with a £600k a year pension. We’re paying for that when against our will, the government bailed out RBS. Lord Ashcroft receives protection from the police and has the British Army fighting to keep him and his buddies in power, at the expense of the taxpayer, while he is not one himself. We’ve had MP’s who already “earn” over £60k a year, claiming for moat cleaning, duck houses and using their second homes as a property development company.

On a more everyday scale though, we are robbed every day by our employers. We provide the labour that customers want and pay for, while our bosses, take our money for it to pay themselves better than what we get. At the end of the day, a business can always run without a boss, or managers, but it cannot run without workers, which are the most vital part, yet paid the least.

These are our work-shy “sponges” on the system. Hopefully you agree with me that it is wrong that they take this money from us. However, it is perfectly legal. No doubt because these same people are the ones who dictate what the law is in the first place, either directly, or through funding the parties in power with the condition that the party pleases these rich funders.

Now, I know that the Daily Mail might tell us that people who smuggle away £65 a week extra in dole are somehow the scum of the earth, but lets actually think about this like adults for a moment. Job Seeker’s Allowance for a single person under 25 is £45 a week, over 25 it’s £65 a week. Housing benefit is capped at around £40 a week for under 25’s and £60 a week for over 25’s. These are what single people get, couples get even less.

Now, that gives you a grand total of £85 a week income for an under 25 to pay your rent, bills, eat, and try get a little entertainment in there to stop you going nuts. The grand total of £125 a week for over 25’s isn’t much better.

Consider for a moment whether you could live on that kind of an income. Forget about your Internet, credit card bills, running your car and phone and entertainment for a moment. Can you even pay your rent/mortgage, gas and electric and feed yourself on that? The answer is no.

Yet currently, nearly two million people on benefits in the UK are told to do just that. This doesn’t even include people, such as cleaners, like myself who’s wages are below this income! There is no question here that we are talking about peoples’ health and welfare here and in a world where the rich irresponsibly put a price tag on water, food, shelter and warmth, to deny those things means death.

So, I do not consider it wrong if somebody tops up their benefits with a bit of cash in hand work, or tops up their undeclared wages with a bit of benefits. This however is not only illegal, but also criminal. Break these rules and not only will the money be forcibly removed from you by sequestion and bailiffs, but you can also get jail time. I’m sure this comes as no surprise though that this double standard exists, as we as the poorest workers do not fund parties with large donations. Even if we wanted to fund the parties, we couldn’t match the donations of the rich, seeing as though “the richest 1pc in the UK hold some 70pc of the country’s wealth” . We simply can’t ever match that kind of political bribe and as a result it is the poor, not the rich, who are declared the outlaws for a far lesser crime.

The intention of making benefits so unpleasant is to encourage us to accept substandard working conditions and pay and even to scab, join the army, or police, or do other such things that in the end only harm our other workers more. If benefits were fit for purpose, to support those who have been forbidden to work by the rich, then maybe there’d be a slight case for having a pop at “benefit thieves”, but at the end of the day, there’s not and there’s far bigger fish to fry before you do that anyway.

The lesson here is to understand that what is right and lawful and what’s wrong and illegal are not allways one and the same. Justice and the law are not the same thing.

Taken from And cleaners shall inherit the Earth!

April 21, 2010

UK unemployment increases to 2.5 million

The number of people unemployed in the UK rose by 43,000 to 2.5 million during the three months to February, official figures have shown.

The jobless total is now at its highest since 1994.

The rate of unemployment now stands at 8% – the highest since 1996 – the Office for National Statistics said.

However, the total number of people claiming unemployment benefit fell in March by 32,900 to 1,54 million – a much sharper fall than expected.

The ONS figures showed youth unemployment rising, with 929,000 16 to 24-year-olds out of work in the December to February period – a rise of 4,000 on the previous three months.

Unemployment among the over-50s rose by 7,000 to 396,000.

The figures prompted mixed reactions from City economists.

Vicky Redwood, economist at Capital Economics, warned the figures pointed to a jobless recovery in the UK economy, particularly with public sector cuts looming further down the line.

But Brian Hilliard from Societe Generale was more optimistic.

“The labour market is in far better shape than we dared to hope for at this stage of the economic cycle,” he said.

Figures from the ONS also showed a rise in wages for those still in work.

Average weekly earnings including bonuses were up 2.3% in the three months to February compared with the year before.

* North East unemployment is Down 3,000 to 120,000

Taken from BBC News

April 18, 2010

the deficit! the deficit! but what about unemployment?

Listening to the debate in the media today you would conclude that there is consensus amongst economists that the key problem of the UK economy is the deficit. And the key question is how to cut it. And the key election issue therefore should be how to cut spending. This is not the case.

Working backwards, perhaps the most ridiculous issue here is the notion that the only way of cutting the deficit is by cutting spending. Fraser Nelson of The Spectator goes so far as to say, “Cameron should ban the word ‘deficit’ and simply say ‘overspend’ instead.” It would seem that some right-wing commentators can’t add. A deficit arises when revenue is less than expenditure. An equally good way of cutting the deficit is by increasing revenue, i.e., by raising taxes. Saying the deficit is an ‘overspend’ is as idiotic as calling the deficit an ‘undertax’.

This is not to say that increased taxes would necessarily benefit UK workers. Contrary to popular belief, the UK does not have a progressive taxation system. It has a regressive taxation system. A progressive tax system is one where the people most able to pay taxes do indeed pay more. A regressive one is where either everyone pays the same or where the less well off pay more than the better off.

According to the ONS (Office of National Statistics), in the UK, the poorest 20% pay 38.7% of their income in tax, while the wealthiest 20% pay only 34.8% of their income in tax. The confusion regarding this arises because people frequently only think of taxes in terms of income tax, which is progressive, but ignore council tax and indirect taxes such as VAT. However, there is abundant evidence that increased taxes matched with increased social spending makes society more equal, i.e., it increases the wealth of the least wealthy and decreases the wealth of the wealthiest.

With that said, it is interesting to consider the current debate regarding Brown’s proposed increases in National Insurance Contributions (NIC). Brown, while he can be criticised for a lot of things, has a rather strong understanding of economics. He explained the increase in NIC on the basis that it was fairer than an increase in VAT. On this he was technically correct, although an increase in the 50% rate of income tax would be even fairer.

The confusion on the NIC proposals arise with claims from the Tories and the employers that it is a ‘tax on jobs’, a tax on employers to discourage them from employing more. It isn’t. NIC can be thought of as two taxes, one paid by the employee, the other by the employer. But, as with every tax, the issue isn’t really who it is levied on, but who actually pays it, and there is pretty strong evidence that payroll taxes that employers pay, such as the NIC, are partially paid by employers but primarily paid by workers, in the form of lower wages. The tax is not really as ‘fair’ or egalitarian as Brown suggests. It’s a tax on workers. The Tories are either being dishonest or too stupid to understand that this is not a tax on employers but rather a tax on employees. And Labour isn’t admitting what the tax really is.

The debate over NIC is interesting because it shows that the Tories are not serious about cutting the deficit. Rather they simply want to cut public spending and adamantly refuse to levy any tax on business or the wealthy. The Tory line is cut spending and pay for what’s left by taxing the least well off workers.

As mentioned above, you can cut a deficit in two ways; by cutting spending and/or increasing taxes. But neither party seems all that interested in increasing taxes and neither is even considering redressing the existing tax injustice where the poorest pay relatively more in tax. However, all this has presumed that the media consensus is correct and that the key problem of the UK economy today is the deficit. This consensus is wrong. The key problem of the UK economy today is not the deficit, it’s unemployment.

The unemployment rate is currently 7.8 per cent, 150% of what it was in January 2008. There are nearly two and a half million people actively looking for work in the UK. Despite a 0.1% decrease in unemployment in the last quarter, the number of people unemployed for more than 12 months is still increasing and is the highest it’s been since 1997. The number of economically inactive people of working age (i.e. people who are neither working nor ‘actively looking for work’) increased by 371,000 over the last year to reach 8.16 million in the three months to January 2010.

The figures are even more shocking when you look at young people, where the unemployment rate is 14.8%. The Institute for Public Policy Research estimates that 20% of young white workers are out of work, 31% of young Asian or Asian-British workers and a shocking 48% of young black workers. That means effectively one in every two young black workers in the UK cannot find work!

This is particularly disturbing given that a growing pool of research shows young people are disproportionately affected by periods of unemployment. It has been found that youth unemployment can have a permanent impact on health status, job satisfaction and wellbeing, and can lead to reduced wages not just in the short term but throughout an individual’s lifetime.

However, despite this, relatively little is being said about unemployment in the UK today. Instead, everything is about the deficit and the need to cut spending regardless of the obvious and significant negative impact that would have on unemployment. Conservative shadow Chancellor George Osborne has argued that “[t]here is no choice between going for growth today and dealing with our debts tomorrow.” As with much recent economic debate, this is idiotic. This statement is essentially that “borrowing is impossible”. Obviously borrowing is possible, Osborne could argue it’s a bad idea but to say that that choice doesn’t exist is idiotic.

Indeed, no less a bastion of socialist radicalism than the International Monetary Fund has argued in a recent study that ‘going for growth today and dealing with our debts tomorrow’ is a good idea. They argue that cutting spending too quickly could damage the economic recovery.

“Unwinding public intervention too early,” the IMF argues, “could jeopardise progress in securing a sustained economic recovery… One of the key lessons from experiences of similar crises is that a premature withdrawal of policy stimulus can be very costly, particularly if the financial system is weak. Thus, in the current context, the potential risks associated with an early withdrawal of policy stimulus seem to outweigh the risks of maintaining it for longer than possibly needed.”

So what is Osborne rambling on about? In his Mais Lecture in February, ‘A New Economic Model’, Osborne laid out his economic theory most clearly, saying that, “[p]erhaps the most significant contribution to our understanding of the origins of the crisis has been made by Professor Ken Rogoff, former Chief Economist at the IMF, and his co-author Carmen Reinhart.

“As Rogoff and Reinhart demonstrate convincingly, all financial crises ultimately have their origins in one thing – rapid and unsustainable increases in debt….. So while private sector debt was the cause of this crisis, public sector debt is likely to be the cause of the next one. As Ken Rogoff himself puts it, “there’s no question that the most significant vulnerability as we emerge from recession is the soaring government debt. It’s very likely that will trigger the next crisis as governments have been stretched so wide.” The latest research suggests that once debt reaches more than about 90% of GDP the risks of a large negative impact on long term growth become highly significant.”

This 90% figure is getting bandied about a lot and also comes from Reinhart and Rogoff’s book. However, in the book this 90% figure plays little to no role. And in a recent Financial Times article Reinhart and Rogoff warn against introducing massive cuts. They write, “[g]iven the likelihood of continued weak consumption growth in the US and Europe, rapid withdrawal of stimulus could easily tilt the economy back into recession.”

Other economists have been even more disparaging of Conservative plans for cuts and their theoretical ‘justification’ for them. Nobel Laureate and former World Bank Chief Economist Joseph Stiglitz referred to Tory plans to cut spending as “incredulous”. He likened their proposals to those of Herbert Hoover, the US President who oversaw the development of the Great Depression, by calling the Tories “Hooverites”.

Stiglitz is even harsher with the notion bandied about by the Tories that Britain is about to turn into Greece and is at risk of default. He says to Osborne, “I say you’re crazy – economically you clearly have the capacity to pay. The debt situation has been worse in other countries at other times. This is all scaremongering, perhaps linked to politics, perhaps rigged to an economic agenda, but it’s out of touch with reality.”

And indeed Stiglitz is right. But not only has the debt situation been worse in other countries, historically it’s been worse in the UK. Indeed, for the entire period of the industrial revolution the UK had public debt above the supposed threshold of 90%. UK public debt went first over 90% in 1746 and did not come down below 90% until 1863. That’s unsustainable debt being sustained for a period of 117 years!

That is not to say that this level of debt can be taken on without costs. Rather it merely shows that the notion that the UK is on the verge of disaster unless the deficit is cut and public debt is taken under control. The UK is not on the verge of disaster. But up and down the length of the country, workers are suffering from unemployment and neither the Tories, Labour nor Lib Dems seem to be all that fussed about it.

Taken from the commune