Jeremy Corbyn on Austerity

For many people, this is no recovery at all


George Osborne was in self-congratulatory mood in the House of Commons this morning as he delivered his Autumn Statement. Growth has returned to the economy; borrowing is falling; we are on the road to recovery. Yet the complacent Chancellor failed to recognise the cost-of-living crisis that is engulfing hard-working people in Birmingham and across the country. For many people, whose wages remain low while prices soar, this is no recovery at all.

Osborne remains convinced that his economic strategy is working, and reeled off statistic after statistic that seemed to prove his point. The reality, however, is that despite growth returning, the economy is still under-performing – growth is significantly lower than it was forecast to be in 2010, and the deficit will still be £79 billion in 2015, after we were promised it would be eliminated by then. Three years of stagnation means that Osborne has missed all of his economic targets, and people are suffering as a result; for 98% of the time his government has been in office, prices have risen faster than wages. This is not a recipe for economic success. The plan has been hurting, but it has not been working. While those right at the top continue to  enjoy their tax cuts, everybody else has to contend with bills becoming more unaffordable and stagnating wages, leaving people up to £1,600 a year worse off under the Tory-led government.

Busy patting himself on the back, the Chancellor offered little to those whose living standards are suffering the most. On energy costs, he stopped short of matching Labour’s promise to freeze prices, meaning people in our city will be forced to choose between heating and eating this winter and next; there are more welfare cuts to come, plunging vulnerable people further into difficulty; there remains no commitment to introducing a living wage, or even a substantial increase in the minimum wage. Every time Osborne has the chance to make life easier for ordinary people, he makes things worse. There were some token measures such as the cancellation of the planned rise in fuel duty, but really this was an Autumn Statement that did nothing substantial to help ordinary people. Even if the economy continues to grow, Birmingham residents will rightly have little faith in a plan that does nothing to improve their lives.

Today’s statement did not change anything. The government continues to allow those at the top to get richer while ignoring the declining living standards of the majority of people. The economy may finally be growing again, but George Osborne is still doing nothing to ensure that the recovery reaches everybody. For many people in Birmingham and in Britain, this is no recovery at all.

Why we need to talk about welfare

The true depth of the Tory policies that make the lives of those poorest, more wretched become clearer on a daily basis.

You will have seen my video highlighting the need to campaign for a fair deal for Birmingham, and within it, details touching upon those groups beginning to feel the real bite.

In ‘wake up and smell the roses‘ I reflect on research published by the Financial Times that uncovers the continuing divide between rich and poor, and the way in which the Tory led welfare reforms are impacting harder on the North than on the leafy suburbs in the South. We have seen this unfairness in the cut of £149 per person in Birmingham compared to just £19 in Berkshire.

Cameron’s outright attack on the poorer parts of society is vicious and vindictive, turning neighbour on neighbour and communities on communities. As an answer to the economical crisis it offers no credibility.

The right wing ideology being purported is dangerous and might easily play into the hands of fascist groups preying on the vulnerabilities of both those struggling to survive and those who feel others are getting more than they deserve.

The Telegraph today report that free school meals could soon be scrapped and people paid to look after elderly neighbours as councils take desperate measures to deliver a “tidal wave” of spending cuts. All councils face desperate decisions about the services that people value and rely on with the unfair cuts being imposed by central Government.

Hilary Wainwright writes for CLASS and argues that “we are facing government policies of such inhumanity that if they are allowed to be carried through, we will look back in years to come with deep horror and shame. From the attacks on disability benefits to the bedroom tax, these measures return us to the kind of society where poverty was blamed on the poor and gross inequality was accepted as an economic inevitability.”

The Myths of Welfare has just been released and as Wainwright argues, “it exposes the tall tales used to disguise the ideological dogma of government attempts to replace our welfare state with US-style residual ‘relief’  for the poor”… it is well worth a read and provides hard alternatives to the war on welfare that Cameron dictates.

Birmingham, as a result of Cameron’s welfare reforms are facing a total annual impact of £419m with the total annual impact on each working age adult being £607. Social housing tenants in Birmingham face cuts to housing allowances totalling £10.15m, reductions in tax credits of £92m, in disability benefits of £30m and to incapacity benefit of a whopping £92m.

We are not all in this together and never forget it.

Osborne’s budget will offer cold comfort to ordinary people in Hall Green

george-osborne-image-2-306799915The Chancellor, George Osborne, has just delivered his annual budget statement to the House of Commons. It is his fourth budget since the government came into power in 2010 and, in the words of Ed Miliband, ‘one thing unites them all; things are always worse than the last time around’.

Growth has been downgraded yet again to just 0.6% this year, borrowing is up again, but despite this and the bad news that just keeps coming from the Treasury, Osborne refuses to change course. Every sign of failure he takes as a vindication; every time it is proved that the plan is not working and is hurting ordinary people, Osborne the ideologue becomes more determined to see it through. Rather than trying to make things fairer for the many, not the few, the downgraded Chancellor remains ideologically committed to giving a tax cut to the richest in society in just two weeks’ time, at the same time as ruthlessly cutting welfare and implementing the incredibly unfair and deeply flawed bedroom tax. This is a Chancellor convinced he can recover our economy by squeezing the poor and easing the burden on the rich. He is wrong.

The truth of this budget is that ordinary working people will suffer while those at the top remain untouched. The few concessions that were made, such as the scrapping of the fuel and beer duty escalators, will have negligible impact while the overall cost of living continues to rise due to inflation. The continuation of the 1% cap on public sector pay increases, well below the rate of inflation, means that many people will struggle to afford a decent standard of living over the coming years; on average, private sector wages also continue to increase at a level significantly below inflation. Raising the income tax threshold to £10,000 should be welcomed, but the Chancellor should go further by reducing the basic rate. A cut in VAT back to 17.5% would also encourage growth and give people more spending power with the money they do earn. A plan for jobs and growth, something which Labour has consistently outlined, should have been at the heart of this budget. It was notably absent.

The confirmation of the £72,000 cap on care costs is another example of Osborne’s ignorance of the needs of ordinary people. The reality is that the cap is set so high that it will make little difference to most people who are forced to pay for care for themselves or for their elderly relatives. Today George Osborne could have taken the opportunity to listen to advice from Andrew Dilnot, who wrote the Government’s report on funding social care, amongst others and implemented a considerably lower cap, but he refused.

The budget has proved once more that the government is not on the side of ordinary, hard-working people and families. A downgraded Chancellor who stubbornly sticks to his failing plan is hurting those who most need help while continuing to curry favour with those who need it least. While bankers in the City of London have never had it so good, ordinary people in Hall Green and across Birmingham suffer the consequences of the Chancellor’s failure.

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The growing demand for food banks

Cllr John Cotton has warned welfare reforms and the controversial ‘bedroom tax’ will hugely increase the demands on the food banks currently springing up across Birmingham.


Council’s austerity black hole heading towards £700m

Article first published on 4/2/13 – the Chamberlain Files – written by Paul Dale

Birmingham City Council can expect to lose one-third of its annual Government grant in the five-year period 2010-15 as a direct result of the Chancellor’s austerity measures.

The figure is worse than expected and has been recalculated following errors by officials at the Department for Communities and Local Government who mistakenly “double counted” the amount of income local authorities would receive from council tax.

In his 2010-15 Spending Review, Chancellor George Osborne originally forecast a 28 per cent cut in grant for councils in England and Wales – an announcement greeted with outrage from town halls across the country.

That figure has now been revised upwards to 33 per cent and will increase even further by 2016-17.

Mr Osborne has made it clear that future local government cuts will be higher still, with a 10 per cent reduction expected for 2014-15 alone. Birmingham can expect to be about £350 million worse off between 2010 and 2017 than would have been the case if grant had increased in line with inflation.

With soaring demand for adult and children’s social care showing no sign of reducing, and funding pressures from other services, the council’s financial crisis is growing steadily greater. A cuts package of £600 million between 2011 and 2017 will probably grow to £650 million, or may even hit £700 million.

Although the city council has a total annual income of £3.5 billion, two-thirds of this is in the form of ring-fenced Government grants that must be passed on to schools or spent on housing.

The annual controllable budget – income over which the council has direct control – stands at £1.3 billion. It is from this area that the £600 million-plus savings will have to be identified, effectively reducing by half the amount of cash available for non-statutory services such as sports centres, community libraries, swimming pools and the youth service.

The grim scenario appears to lend credence to Birmingham city Council leader Sir Albert Bore’s warning of “the end of local government as we know it” and his acceptance that many traditional public services will simply have to be decommissioned from 2014-15.

Sir Albert has joined forces with the Labour leaders of the seven English core cities, the country’s largest local authorities, in sending a new letter to Local Government Secretary Eric Pickles warning of a “looming financial crisis” and pleading for a halt to the austerity programme.

The core cities’ second letter to Mr Pickles since December, again demanding an urgent meeting, states: “The growing pressure on services, in particular social care and other changes to the funding system mean that our real savings targets are several times greater than the cuts in grant.

“The biggest cuts in funding are still to come, with the average grant cut in 2014-15 now likely to be around 10 per cent and the Chancellor making it very clear in his Autumn Statement that cuts into the next Parliament will be significantly greater than previously expected.

“As a result the reductions in important services that will inevitably begin this year will intensify with the complete decommissioning of some services from 2014-15.”

The letter reveals that Birmingham City Council has almost no “rainy day” money to fall back on. Unallocated cash reserves stand at 1.85 per cent of the net budget, the lowest of any of the eight leading English city councils. The figure is so low that the District Auditor has advised Birmingham to urgently build a cash reserve.

The letter continues: “The spending cuts for 2013-14 are significantly greater than previously announced and the original spending power figures contain serious inaccuracies. There has been no ministerial correction in Parliament or apology for the provision of this misleading information.

“This crisis is very real and will have a significant impact on the quality of life and economic vitality of our greatest cities. But we believe it can be tackled if the Government is prepared to work with us instead of just repeating calls for efficiency savings that are already being made but will in any case be inadequate.

“Local councils have been portrayed as being opposed to change and scaremongering or holding out a begging bowl. On the contrary the Core Cities would urge the government to be more radical and bolder in making the necessary reforms to local services and how they are financed – as long as these are progressive reforms that produce better outcomes.”


City Council Budget 2013/14 Consultation

The City Council has started a process of public consultation about the budget cuts for 2013/14. There are four public meetings which are listed on the poster below.

The City Council will put forward its views on next year’s budget at these meetings. It is very important that we encourage members of the public to attend including party members.

We will all have local views to be considered but we must also get the message across loud and clear that the Tory-led government should give Birmingham a fair deal. Why should Birmingham be hit harder by cuts than other parts of the country?

We’re Rebuilding Britain