osborne

George Osborne is desperate to stop talking about the cost-of-living crisis on his watch – Balls

Ed Balls MP, Labour’s shadow chancellor, responding to George Osborne’s speech on the economy, said:

“George Osborne is desperate to stop talking about the cost-of-living crisis on his watch. But that won’t stop working people from doing so as they are on average £1600 a year worse off under the Tories and prices are still rising faster than wages.

“Nor will the Chancellor admit the reason why he is being forced to make more cuts is because his failure on growth and living standards has led to his failure to balance the books by 2015.

“This failure means Labour will have to make cuts and in 2015/16 there will be no more borrowing for day-to-day spending. But we will get the deficit down in a fair way, not give tax cuts to millionaires. And we know that the way to mitigate the scale of the cuts needed is to earn and grow our way to higher living standards for all.

“The social security bill is rising under George Osborne, but the best way to get it down for the long-term is to get people into work and build more homes. The Tories should back our compulsory jobs guarantee for young people and the long-term unemployed. And in tough times it cannot be a priority to continue paying the winter fuel allowance to the richest five per cent of pensioners.

“What we need is Labour’s plan to earn our way to higher living standards for all, tackle the cost-of-living crisis and get the deficit down in a fairer way.”

For many people, this is no recovery at all

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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.

Your services under threat thanks to the coalition government

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We all take many things for granted and some of those things are often the services provided by our council. So when our bins aren’t emptied because of the bad weather – we notice. When our roads need repairing – we notice.

But there are lots of other services that we pay little attention to, things that just happen. Our streets are cleaned, services are provided for children and young people, we have libraries, community centres, schools and advice services. Pavements are repaired, parks are maintained, trees are pruned…the list is endless.

But all these services are now under threat as a result of the huge cuts to the grant that Birmingham gets from central government.

Media reports quoting Sir Albert Bore with his ‘jaws of doom’ and his prediction that ‘this will be an end to local government as we know it’  did so mockingly. But these words reflected the perilous position we are currently in.

The Labour Administration took over the running of the council just over a year ago following  9 years of disastrous management by the Tory and Lib Dem council leadership. Despite the very good work undertaken by the Labour administration to balance the books against huge funding reductions and the need for efficiency savings, they are still facing an uphill battle. This difficulty compounded further with Birmingham being short changed by £79m from central government. This reduction in funding brings with it huge problems to those with responsibility to oversee services in a city of Birmingham’s size.

Parliament’s Public Affairs Select Committee have recognised this very real and serious situation and have recently undertaken a review of the financial sustainability of local authorities. The results have sent alarm bells ringing.

Margaret Hodge MP — Chair of the Committee says:

“Central government is cutting funding to local authorities by more than a quarter over four years but does not properly understand what the overall impact will be on local services…Local authorities are tending to cope with funding reductions. But in the long term there might well be little room for further efficiency gains and services would have to be cut. There needs to be frank and open dialogue between central and local government and the public on just what services councils will be expected to provide in a prolonged period of declining funding.”

But it is likely that Pickles, Cameron and Osborne will take no heed of these warnings…

We need to stand together and demand that Birmingham gets a fair deal from the ConDem government. Together we are stronger and our voice is louder. Please support the Labour Party in Hall Green and in Birmingham and remember who are the real villains in this.

Birmingham needs a Plan B from Osborne

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To great sighs of relief, at least around the Cabinet table, yesterday we learned that we have just about managed to avoid a triple-dip recession, with growth in the last quarter of a whopping 0.3%. Doesn’t sound that impressive, does it? The truth is that yesterday shouldn’t have been a relief at all. A triple-dip recession shouldn’t even have been a possibility. Yet such has been the failure of George Osborne’s economic plan, it almost seems like a great victory.

The danger is, of course, that George Osborne will see it as exactly that: a victory. We have lost our AAA credit rating with two agencies in the last few months, something which the Chancellor took as a vindication rather than a warning. This bit of relatively good news will no doubt put an extra spring in his step. The reality of the situation is, though, that the economy is still in a bad place – we’re only just back to the same place we were six months ago. The economy is flatlining, and things show no real sign of significantly improving any time soon. Most sectors of the economy are still performing incredibly badly; it’s only the service sector that has shown any real sign of life. Osborne needs new ideas, and he needs them fast.

The consequences of Osborne’s failure are visible right across the country, but they are abundantly clear in our communities in Birmingham. Unemployment remains high, particularly among young people, and welfare cuts and the shameful bedroom tax are being implemented as the cost of living continues to rise. The Guardian has highlighted this week the damage that is being done to Birmingham by the government’s cuts – all of the pain, for no economic gain. What Birmingham and other cities around the country need is a Plan B, with jobs and growth at its heart, to ease the pressure on the people who are suffering under this government. Labour has been saying all along that the government needs to change course, but with each quarter of no growth, no jobs and no hope, the need for a positive economic alternative becomes clearer.

Labour councillors are working hard to get the best deal for our city, but are constrained by the unfair cuts that the government has foisted upon them. It is not just the growth and jobs that are lacking,  but a fair deal for cities like Birmingham.

Our Hall Green councillors and campaigners have been calling for a better deal for Birmingham – it’s time the government took note. The council is being forced to make tough decisions, while leafy, Tory-dominated suburbs take none of the pain. We’re not all in this together and we’re not one nation. Birmingham residents are one the receiving end of the damage caused by the government’s economic failure and its refusal to give Birmingham a fair deal.

So Birmingham, and the country, need a Plan B. We all see that Plan A has failed, but the Chancellor sticks stubbornly to it. We need two things: firstly, we need jobs and growth, to get our economy moving again and to ease the burden on Birmingham households; secondly, we need the government to give Birmingham a fair deal instead of prioritising their own heartlands. We desperately need something to change. To borrow a phrase from David Cameron, we can’t go on like this.

Why campaign for a Fair Deal for Brum?

Birmingham has been short changed by £79m and we believe this is unfair. Why should Birmingham be hit harder than other places? Parts of leafy Berkshire have seen cuts of only £19 per person in comparison to cuts of £149 per person in Birmingham. This is not fair and in this video, campaign organiser for Hall Green BLP explains why. Please share widely.

Are you sure we are all in this together?

We have a coalition Government behaving as if it has a mandate and as if it won a landslide victory. The radical welfare changes that started on Saturday are yet another clear indication of this Tory led government’s cynicism, arrogance and of its total lack of compassion.

Today sees the continuation of their ideological attack with changes being implemented to disability benefits in the north of England ahead of a nationwide roll out of the new measures as part of the government’s plan to cut the welfare bill.

The move to replace the Disability Living Allowance (DLA) with Personal Independence Payments (PIP) will end what Iain Duncan Smith called the ‘ridiculous’ system that gives people lifetime awards as the disability living allowance is replaced by the new personal independence payment (PLA).

The new system which includes face-to-face assessments and regular reviews (managed by ATOS) and will see changes to assessment claims that might mean 600,000 people miss out on support with some new assessment rules on mobility being sneak in through the back door.

Over half a million people have now signed a petition asking George Osborne to live on £53 per week, something he has brushed off as a publicity stunt. Yet surely this shows the real depth of feeling, from ordinary men and women, already struggling and this Government should pay heed to the level of opposition being displayed to their vicious welfare cuts.

We can all feel the effects of this governments attack on ordinary men and women. Many in work are not only seeing their hours reduced but their ‘in work’ benefits reduced also and those who are out of work are finding it increasingly difficult to make ends meet. If we are not personally touched by these changes, then our families, friends, neighbours most certainly are.

One thing we can be certain of is that we are not all in this together.

Welfare changes founded on Tory rhetoric

The government is about to implement the biggest overhaul of the benefits system since the creation of the welfare state. These reforms have been heavily criticised by 17 charities and non-profit organisations in a report to Birmingham City Council which says that the reforms make child poverty targets “unachievable” and the Chief Executive of Birmingham CAB has warned of “social meltdown”.

Iain Duncan Smith purports that the main purpose of these welfare changes is to provide a greater incentive for people on benefits to work and that these changes will make the welfare system fairer, but fairer for who?

The government’s Universal Credit (UC) will be a new single payment for people who are looking for work or on a low income and will, the government say, help claimants and their families to become more independent.

The government plans to launch UC in April, starting with a number of pilots in parts of the north-east England and then it will be introduced nationally for new claimants from October 2013. Existing claimants will be transferred to the new system in stages until 2017. It will replace the current system of tax credits and benefits for working age people with a new single payment which is paid monthly rather than the current system of weekly or fortnightly payments.

The main differences between Universal Credit and the current welfare system are:

  • UC will be available to people who are in work and on a low income, as well as to those who are out of work
  • most people will apply online and manage their claim through an online account
  • claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
  • support with housing costs will go direct to the claimant as part of their monthly payment.
  • There will be a benefit cap in line with the average weekly wage

There will be a maximum cap on benefits that a household can receive based on the average earnings of a working family (this includes other benefits such as Child Benefit). The benefit cap is designed to make it impossible for anyone to receive more on benefits than the average weekly wage after tax and national insurance.

  • For couples and lone parent households the cap will be £500 a week
  • For single adults the cap will be £350 a week

The benefit cap will be brought in nationwide in April 2013 and reductions will be made to housing benefit payments until universal credit takes over in October 2013.

The benefit cap will most certainly hit larger families and those who live in comparatively wealthy areas the hardest, and Mumsnet suggest that this “may result in ghettoisation of poorer working people and some people being forced to leave their homes.”

Other concerns include fears that UC will result in harsh assessments of people with disabilities and those who are currently unable to work because of illness as well as there being unrealistic expectations for lone parents with young children to go out to work.

Estimates from Disability Rights UK have suggested that 67,000 households will be affected in 2013-14 and 75,000 in 2014-15, with 54% of these being households in Greater London.

Other concerns raised refer to how Council tax credit will be administered by local authorities. The Instititute of Fiscal Studies (IFS) has predicted there will be problems with this because local authorities have been given less funding to administer the credit, which may lead to crude fixes and arbitrary means-testing. The IFS predicts poor families will end up paying 19% of their council tax.

Claimants will have to sign a claimant commitment form to get UC (apart from some groups of people who are excluded such as those with caring responsibilities). If you’re out of work this form sets out what you must to do look for work, such as preparing a CV or registering with a recruitment agency. If you don’t stick to the agreement, your benefit may be reduced or withdrawn.

Mumsnet argue that this commitment will tie in to the workfare schemes, where people will have their benefits cut if they are unwilling to work unpaid for six months. This is called the community action programme or ‘support for the very long-term unemployed’, but critics say it could be an easy way for companies to get free labour and take advantage of people who have been unable to find work (not to mention the fact that it would essentially remove paid jobs from the labour market by converting them into ‘free placements’).

Claimants with limited capability for work-related activity (as defined by a work capability assessment); Claimants who receive the carer element; Those who are responsible for a severely disabled person for at least 35 hours a week or a lone parent with a child aged under one are exempted from this commitment but there are concerns.

The new way of assessing fitness to work for people with disabilities has shown a ‘tick-box’ approach that doesn’t consider individual needs and may disregard ‘hidden’ disabilities, such as autism and mental health problems.

It is also feared there will be targets for private companies who carry out work capability assessments, which will reward them for declaring more people fit to work. This was the subject of a Channel 4 Dispatches programme: Britain on the Sick.

Claimants will have to meet degrees of conditionality in order to receive UC and claimants for the basic part of universal credit will be divided into different groups:

  1. No work-related requirements – because they may already earn enough or they may not be able to work at all.
  2. Work-focused interviews only – designed to keep people in touch with the labour market. This group would include a lone parent of a child between the ages of one and five.
  3. Work preparation group – claimants need to prepare to move to work or better paid work and may include people with a limited capability for work.
  4. All work–related requirements group – need to be looking for and available to do any type of work, usually full time. There will be concessions for parents of children aged 5–13 (where work hours would be limited to school hours), although it appears there may be concessions regarding work hours for parents who care for children aged 13–16, too.

There will be a three-month period where claimants will be able to look for work in a specific area and at a level of pay they have previously had, after which they must be willing to accept anything.

These requirements may be designed to help people into work, but the tough sanctions (fixed period sanctions of 91 days for the first failure; 128 days for the second failure, if it occurs within 52 weeks of the first; and three years for third and subsequent failures, if they occur within 52 weeks of the previous failure) mean that people will be forced into low-paid jobs.

Further sanctions will be applied if:

  • There is a failure to undertake mandatory work activity without good reason
  • There is a failure to apply for a particular vacancy without good reason
  • There is a failure to take up an offer of paid work without good reason
  • Paid work ceases by reason of misconduct, or voluntarily without good reason
  • Pay is lost by reason of misconduct, or voluntarily without good reason

If a claimant starts work, some of their earnings will be disregarded before there are any deductions to their UC payment. Once these disregarded earnings have been taken into account, UC will be withdrawn at a rate of 65p for each £1 of net earnings. So, after the disregard, claimants will be £35 better off for every £100 they earn. Not a great target for aspiration.

The government plan for UC is that it will be managed online with the notion of paying benefits monthly to reflect the world of work. The reality of this being that those receiving even a low income will likely have more monthly income left at the end of the month that those relying solely on benefits, further proliferating the dependency of ‘pay-day’ loans.

The Chartered Institute of Housing states that 400,000 of the country’s poorest families – among them those in poverty and on the minimum wage – will have less income in 2015 than they did in 2010, despite ministerial assurances that no one would lose out under its plans. The CIH calculations show that “the government’s aim for households to be better off in work than out of work under universal credit is not the case for all families.” They report that households that earn £247 or less a week will see a fall in real income in 2015, and lone parents with up to three children will always be worse off if UC remains in its current form.

There has been widespread concern about managing UC online with major concerns about the IT capabilities of the new system which is supposed to work alongside PAYE tax details, and employers are supposed to feed payment details into the system to make the benefits system ‘dynamic’. Reports suggest the system is not ready and there have been large delays in processing information. The system relies on real-time information being provided to track claimants’ earnings. All employers are supposed to submit wage information, but it may prove difficult for smaller companies to do so.

Other concerns focus on the assumption that all claimants can manage accounts online, with the Citizens Advice stating that “The new universal credit system risks causing difficulties to the 8.5 million people who have never used the internet and a further 14.5 million who have virtually no ICT skills,”.

Further concerns are stated in full elsewhere regarding the implications of UC being paid monthly and being paid to one member of a household, and the gap that may exist when the current system is phased out and the new one starts.

George Osborne is fond of saying, “where is the fairness…for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits?” And the Cameron has often talked of the benefits bill “sky-rocketing” while “generations languish on the dole and dependency”.

The assumption then that everyone is online and able to update their ‘account’ simply based on this Tory contemptuous rhetoric of the ‘benefit scrounger’, living an ‘idle’ and indulgent lifestyle spent watching Jeremy Kyle on their 50” plasmas and updating their FB pages.

The reality of course is far different – The benefit scrounger is the bogeyman of British politics, stalking the corridors of Westminster.

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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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We’re Rebuilding Britain