Category Archives: Finance

Broken Britain 21: our divided society

Aditya Chakrabortty focusses on the ‘vast disconnect between elite authority and lived experience, central to what’s broken in Britain today’ – the ‘gap’ which widened as independent working class self-help initiatives were replaced by the ‘hand of the state’ (Mount) creating’ a new feudalism’ and from two searing analyses of our divided society (Jones).

He asks:

  • “Why is a stalemate among 650 MPs a matter for such concern, yet the slow, grinding extinction of mining communities and light-industrial suburbsis passed over in silence?
  • “Why does May’s wretched career cover the first 16 pages of a Sunday paper while a Torbay woman told by her council that she can “manage being homeless”, and even sleeping rough, is granted a few inches downpage in a few of the worthies?”
  • Is “the death sentence handed to stretches of the country and the vindictive spending cuts imposed by the former chancellor George Osborne, a large part of why Britain voted for Brexit in the first place?”

He continues:

“We have economic policymakers who can’t grasp how the economy has changed, elected politicians who share hardly anything in common with their own voters . . . Over a decade from the banking crash, the failings of our economic policymaking need little elaboration. the basic language of economic policy makes less and less sense.

“Growth no longer brings prosperity; you can work your socks off and still not earn a living. Yet still councils and governments across the UK will spend billions on rail lines, and use taxpayers’ money to bribe passing billionaire investors, all in the name of growth and jobs.”

A University College London study published last year shows that  the parliamentary Labour party became more “careerist” under Tony Blair – and also grew increasingly fond of slashing welfare. Social security was not something that ‘professionalised MPs’ or their circle had ever had to rely on, so ‘why not attack scroungers and win a few swing voters?’

The trend continues: Channel 4 News found that over half of the MPs elected in 2017 had come from backgrounds in politics, law, or business and finance and more came from finance alone than from social work, the military, engineering and farming put together.

This narrowing has a direct influence on our law-making and political class and Chakrabortty comments: “We now have economic policymakers who can’t grasp how the economy has changed, elected politicians who share hardly anything in common with their own voters”.

He concludes that this is what a real democratic crisis looks like: failed policies forced down the throats of a public. Institution after institution failing to legislate, reflect or report on the very people who pay for them to exist. And until it is acknowledged, Britain will be stuck, seething with resentment, in a political quagmire.

 

 

 

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Farm Groups: No Deal Brexit reckless in the extreme

PRESS RELEASE, 6th March 2019 from Fairness for Farmers in Europe (FFE), an open door federation of farm organisations across GB, the Isle of Man, Ireland north and south.

After their recent meeting in England, the following FFE members supported this statement: Family Farmers Association, Farmers For Action, Irish Creamery & Milk Suppliers Association, Irish Cattle & Sheep Farmers Association, Manx NFU, National Beef Association and Northern Ireland Agricultural Producers Association.

Pictured (l-r ) at Fairness for Farmers in Europe’s recent meeting at the Marriott Hotel in Gatwick– back row  is Andrew Cooper General Secretary Manx NFU, John Enright ICMSA General Secretary, Tim Johnston Manx NFU Vice-President, Sean McAuley NIAPA & FFA and Brian Brumby Manx NFU President.  Front row, Eddie Punch General Secretary ICSA, William Taylor FFA NI and FFE co-ordinator and Patrick Kent ICSA President.

Fairness for Farmers in Europe have delivered the following press release of their agreed statement on the strong possibility of the UK leaving the EU without a deal to Michael Gove MP, Andrea Leadsom MP, Theresa May PM, Neil Parish MP, Sir Vince Cable MP, Sir Keir Starmer MP and Anna Soubry MP with copies sent to the Irish Government, the Isle of Man Government, the Scottish Government, the Welsh Government, EU Commission President Jean Claude Juncker, Council of Ministers President Donald Tusk and European Parliament President Antonio Tajani. FFE members are copying in their MEPs and politicians where appropriate.

The statement 

Fairness for Farmers in Europe (FFE) on behalf of all the family farmer members they represent across these islands, north, south, east and west, must make clear to the UK Government that it would be reckless in the extreme with the impact horrendous for agriculture and food if the UK were to crash out of the EU with no deal on 29th March.

The beef industry, to give one example across these islands is already being devastated due to uncertainty currently with price losses at the farm gate of 10%+, not to mention the add on costs to consumers from the 29th of March.  A no deal on 29th March would by way of UK and EU Customs and Excise administration costs, consequential transport waiting times and WTO tariffs where applicable on lamb, milk, milk products, chicken, pork, beef, vegetables, fruit and other at the UK Northern Irish border with the EU / Southern Ireland Border, UK Dover border point with Calais French EU border and all other food importing/exporting points around and in the UK.

For the sake of commonsense we ask you to draw back from the brink – ask for more time to achieve a successful outcome if a deal cannot be reached by 29th March. 

 

Contact: 56  Cashel Road, Macosquin, Coleraine, N Ireland, BT51 4NU

Tel. 07909744624  Email : taylor.w@btconnect.com

 

 

 

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Cash or cashless? Vested interests strive to win the argument

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Charles Randell, chair of the government’s Payment Systems Regulator asks a pertinent question:Should access to such a basic financial service be universal, or commercially driven?”

Cashless: “Digital payments are clearly the future”: a spokeswoman for digital payment company Square

One protagonist, Helen Prowse, a spokeswoman for digital payment company Square, spoke at a debate held by Monzo, a London-based fintech startup. “Digital payments are clearly the future.” She continued: “In the UK, plastic payment cards are the most popular way to buy things. Only about 30% of transactions use paper notes and coins, The ratio is already at 15% in Sweden, which will become effectively cashless in a few years’ time”. Quartz journalist John Detrixhe appears to agree. He gives several reasons for ‘getting rid’ of cash:

  • When shops switch over to digital money, their workers are less likely to be subject to violent robbery.
  • It can also be faster and cheaper to process than notes and coins.
  • Cash helps to enable the underground economy through tax evasion as well as illicit finance.

But G4S issued a report (April ’18) showing that cash circulation has increased

G4S which transports, process, recycle, securely store and manages cash published the World Cash Report in April 2018.  It surveyed 47 countries covering 75% of the global population and over 90% of the world’s GDP. The findings show that demand for cash continues to rise globally, despite the increase in electronic payment options in recent years; cash in circulation relative to GDP has increased to 9.6% across all continents, up from 8.1% in 2011.

The report highlights the variety of payment habits in different regions. In Europe 80% of point-of-sale transactions are conducted in cash, while in North America, where card payments are most regularly used, cash use still accounts for 31%. In Asia the rise of online purchases does not mean that cash is taken out of the equation, with more than 3 out of every 4 online purchases in a number of countries paid for by cash on delivery.

Access to Cash Review: cash is “an economic necessity” for around 25 million people in Britain

Natalie Ceeney (right), a successful civil servant who is now non-executive chair of Innovate Finance, chaired the independent Access to Cash Review, funded by Link, the UK’s biggest network of cash machines. She said “The issue is that digital does not yet work for everyone.”

The review indicated that physical notes and coins are “an economic necessity” for around 25 million people in Britain, and nearly half of people surveyed said a cashless society would be problematic for them. ATMs and bank branches are under particular pressure in rural communities, where broadband and mobile service is unreliable or unavailable. Next month, the review plans to publish its recommendations on how to deal with declining cash availability.

Nicky Morgan, chair of the UK’s Treasury Committee, said recently, “Whilst cash may no longer be king, it continues to play an important role in the lives of millions. So what we’ve heard today from the PSR should set alarm bells ringing. It’s clear that the whole way that people access their cash via ATMs is starting to fail. With the way that people access their cash seemingly on the precipice of collapsing, the government can’t just bury its head in the sand. . . .”

And what will happen in a cashless society when electronic systems malfunction – as machines do – when the mobile phone cannot get a signal, when cable sheaths fail or when someone accidentally damages a phone cable?

 

 

 

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Government faces a judicial review about short-changing 1950s women

In an earlier post Political Concern reported that 2.6 million women born in the 1950s will ‘lose out’ because of changes to pension law: “while corporations and the richest individuals receive tax breaks.

“Governments are balancing budgets on the backs of the poor”- (lawyer/novelist John Grisham)

Waspi, a UK-wide organisation with many local groups, is campaigning against the way in which the state pension age for men and women was equalised, whilst supporting the principle of equality.

One, the Chorley Supporters Group, is denouncing the government who arbitrarily told them to work for several extra years before they can claim their state pensions, causing them to lose income and peace of mind and obliging many to continue to work at a time of life when caring duties increase and energy levels start to fall. Read more in the Lancashire Evening Post.

Writing to the Financial Times they say: “It is about time the spotlight was turned on this government, which has effectively stolen the security net of millions of women by raising the state pension age far quicker than planned, with no personal notification”.

On the BBC’s World at One programme one of many testimonies was given:

Stella Taylor: “I was born in 1955, I had worked all of my life and, when I became unwell at just about the age of 58 I then discovered, quite accidentally, that my State Pension, which I was expecting to receive at 60, had been moved six whole years to sixty-six. And, like so many women in this movement, we were just aghast. We thought there must be a mistake. Had I received my pension at sixty, when I had expected to, I wouldn’t have been wealthy by anybody’s standards, but I wouldn’t have been in the depths of poverty that I now am. At the moment, because I am still unable to work due to ill health, I receive seventy three pounds and ten pence per week in Employment Support Allowance. Living, and paying all your household bills, out of that £73 a week is impossible. There are times when I have needed to use my local food bank because I haven’t been able to afford groceries.” More testimonies here. 

On February 10ththe BBC reported the warning of Amber Rudd, the pensions secretary, which should be extended to her own department:

”If you chronically mismanage a pension scheme . . . we’re coming for you.”

After pointing out that a freedom of information request has revealed recent research findings that the government reneged on their contributions to the national insurance fund over many years and redirected that money towards paying off the national debt, the Chorley Supporters Group asks:

“How government can expect other public or private institutions in this country to play fair with pension funds when it is not doing so itself”.

On February 11th, the government published a research briefing on the legislation increasing the State Pension age for women born in the 1950s. up

This unexpected rise in the state pension age will now “save” the Treasury an estimated £8bn by impoverishing 1950s women.

MP Grahame Morris pointed out that the Labour Party, Liberal Democrats, SNP, Plaid Cymru, the DUP and 50 Conservative MPs support the Waspi campaign.

He added that Landman Economics’ report gives the figure of £8bn savings to government and suggests that this sum should be seen in the wider context of current or planned government finance. Some examples follow: (Ed: links added):

FT Adviser reports that SNP MP Mhairi Black earlier pointed out that the National Insurance Fund is projected to have a substantial surplus at the end of 2017 to 2018 and the HMRC’s report confirms that the National Insurance Fund balance at 31 March 2018 was £24.2 billion and is expected to increase in the following year.

Morris ends: “In this context, finding the money for Waspi women seems a sensible price to pay to give these women justice . . . We know and we can see that it isn’t equal, it isn’t fair and it isn’t justifiable – it’s driving down the incomes and the quality of life of countless women”.

Next June the government faces a judicial review in the High Court to determine whether these recent increases to women’s state pension age are lawful and the Chorley Supporters Group, Chrissie Fuller, Jane Morwood, Betty Ann Tucker, Riley Ann Rochester, Beverley Cordwell, Lea Butler and Lesley Kirkham end by warning that they will not rest until justice is done.

 

 

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MPs ask how ‘the other England’ can be strengthened so that fellow citizens are not “pushed into destitution”

A Bournville reader draws attention to an article about Heidi Allen, Conservative MP for South Cambridgeshire, and former Labour MP Frank Field, now a backbencher. They are touring the poorest areas of Leicester Newcastle, Glasgow, Morecambe and Cornwall. Frank Field said they want to know “how the soft underbelly of our society – ‘the other England’ – can be strengthened so that none of our fellow citizens are pushed into destitution”.

Robert Booth, Social Affairs correspondent for the Guardian, reports that their widely publicised inquiry began in London where testimonials from those with first-hand experience of food poverty exposed the barriers that people face in securing support from the government, when faced with extreme life hardships and personal difficulties.

“Unless we blow the lid off it, my lot are not going to listen”

He explains that Heidi Allen had asked Frank Field if he would join her on a tour of the UK to show the government the “other England” shaped by the austerity policies pioneered by Allen’s party. She added: “Unless we blow the lid off it, my lot are not going to listen.” This is not a new concern: in her 2015 maiden speech Heidi Allen gave a detailed criticism of proposed cuts to tax credits, saying, ‘today I can sit on my hands no longer’.

Evidence from Leicester which they will be presenting includes accounts of:

  • an illiterate man sanctioned so often under universal credit that he lives on £5 a week;
  • a man who had sold all but the clothes he was wearing;
  • someone told to walk 44 miles to attend a job interview, despite having had a stroke, to save the state the cost of a £15 bus ticket;
  • a surge in referrals to food banks from 5% since the introduction of universal credit in June, to 29%;
  • an elderly person – after her son, who had suffered a stroke, had been sanctioned 15 times – said, “The system needs more caring people. They are like little Hitlers”;
  • another was expecting the bailiffs to take back her two-bed council house because she was in arrears, including on bedroom tax. Her second bedroom is used by her granddaughter five nights a week, so her son can work, but that doesn’t count – only children qualify’

The bureaucratic struggle to claim benefits is a big problem, carefully and accurately portrayed in Ken Loach’s internationally acclaimed award-winning film, I Daniel Blake (snapshot and link to brief video below). 65% of the most vulnerable people who come to Leicester council for help have never used a computer and don’t have a smart phone or an email address, needed to fill out forms.

 A brief extract from the film – those who have seen it will remember that the computer session becomes far more stressful and eventually – as often happens – aborts for no fault of the ‘client’.

According to Feeding Britain, a charity set up by Field which now includes Allen among its trustees, after housing costs, 41% of children in Leicester – more than 34,000 – are living in poverty. The Leicester South parliamentary constituency was in the poorest 2% of constituencies in the UK in 2018. Over the last two summer holidays, in the most deprived parts of the city, over 15,000 meals were served to almost 1,650 children, using government funds.

In the Leicester Mercury, Leicester South MP Jon Ashworth said after reading the latest research findings: “These shocking statistics show high levels of child poverty in Leicester South. It is clear that the Government is failing working families, and cuts to Universal Credit will make child poverty even worse. It is appalling that since 2010 the number of children living in poverty has reached four million under this Government, and the Government is still maintaining the benefit freeze.”

 

 

 

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Criminal justice system on its knees – ’transformed’ by outsourced IT system

 

Lucy Frazer, the justice minister, faces warnings that the criminal justice system is reaching crisis point. Thousands of cases have been disrupted, with trials adjourned and delayed, after the main computer system in England and Wales went down at hundreds of courts. The Times reports that one senior figure said the system was “on its knees”.

Problems include:

  • Prison visits and meetings cancelled.
  • Lawyers and clerks unable to access documents such as witness statements.
  • Defendants being asked to check their own driver records for potential disqualifications on the DVLA website.
  • Problems in the probation service surfaced eight weeks ago; probation workers are being told to take annual leave as they could not carry out their work.
  • 75,000 judges and lawyers who use the criminal justice secure email system were locked out last week.
  • The Criminal Bar Association (CBA) said it estimated that about 30 trials had already been adjourned.

Chris Grayling, during his term as lord chancellor, introduced the present IT system as “a several hundred million-pound investment in the Courts and Tribunal Service . . . fully supported by the judiciary and a really important initiative of Conservatives and Liberal Democrats working together in coalition to modernise the working of our courts”.

Comment by Jonathan Black, a partner at BSB Solicitors and former president of the London Criminal Courts Solicitors’ Association:

“Since 2013, when Grayling was brought in to manage transformation of our justice system, we saw a plethora of projects prefixed with the word transforming, which was window-dressing for selling off.”

Comment by Chris Henley, QC, chairman of the Criminal Bar Association, which represents about 4,000 lawyers:

“The unrealistic planning has all the hallmarks of a Grayling project. He has repeated the trick everywhere he has been. We’ve seen it with the probation contract, private prisons and more recently the railways. We are living with his destructive, nihilistic legacy in all areas of legal aid and the courts . . .

“The closure of so many buildings, the ‘rationalisation’ of staff etc are all premised on the basis that the modernisation programme will create a cheaper digitised replacement system. Lawyers and many judges have no confidence in this planned overhaul of the courts and have serious reservations from a public policy point of view.”

He warned that trials could collapse. “Trials are being adjourned, the IT infrastructure is inaccessible in many places, electronic recording systems aren’t working and barristers can’t access vital documents because court wifi and secure emails aren’t working,” he said. “The system is on its knees.”

Lucy Frazer, the justice minister said that all judges would receive a personal letter from Sir Richard Heaton, the permanent secretary at the MoJ, who would also meet the chief executive of Atos, one of the network suppliers. She added that the department was exploring whether the suppliers’ contracts included “penalty clauses” to try to retrieve some of the costs incurred by the IT failures.

A spokesman said that the secure email system, supplied by Egress, had been restored. The desktops using wired connections to the main MoJ network, provided by Microsoft and Atos, were still down. Microsoft and Egress referred inquiries to the Ministry of Justice.  Atos declined to comment.

Sources

https://www.thetimes.co.uk/edition/news/destructive-chris-grayling-blamed-for-computer-chaos-in-courts-lsqkzd68z

https://www.thetimes.co.uk/edition/news/courts-in-chaos-as-trials-halted-by-it-breakdown-f9lkqmm20

 

 

 

 

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Surprised? Rich and poor in England receive different levels of service from the NHS

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Frequently reported differences in health outcomes are generally ascribed to factors beyond the control of the health service, such as unhealthy lifestyles or poor living conditions. However, research has disclosed that there is a difference in the level of service received by poorer communities.

Though the NHS’s funding formula is designed to provide more money to the neediest areas, an FT article reported last week that – according to data analysed by the Nuffield Trust for the Financial Timessome poorer communities being “left behind” when accessing GP services.

Sarah Neville, Global Pharmaceuticals Editor, summarising the data, reports that rich and poor people in England receive different standards of care from the UK’s universal free health service.

Despite the higher burden of ill health in lower socio-economic groups, there are markedly fewer GPs per head in poorer areas of England than in richer areas

There was an average of 1,869 patients on GP lists for each doctor in the most affluent clinical commissioning groups, compared with 2,125 in the most deprived, according to Nuffield researchers. One in seven people in the poorest areas was unable to get a GP appointment, compared with one in 10 in the richest areas.

As GPs act as the crucial “gatekeeper” to other health services, a delay in seeing a doctor can lead to delays in securing other appropriate treatment. Emergency admissions were nearly 30% higher in the most deprived fifth of CCGs, compared with the least deprived fifth, which could point to delays in securing — or seeking — the right treatment. (See references to Sandwell here)

Nigel Edwards, chief executive of the Nuffield Trust, said that the new analysis showed there were “concerning discrepancies between the standards of care rich and poor receive from some NHS services”.

NHS England, “more medical treatment isn’t by itself the only answer”:

“ (T)he NHS long-term plan will be setting out new action to tackle inequalities including in access to primary care. But with the root cause of ill health lying in factors such as diet, smoking and exercise, income security, housing, air pollution and social connection, more medical treatment isn’t by itself the only answer.”

Ms Neville concludes that the findings raise questions about how well the 70-year-old National Health Service is meeting its founding principles of equity. They increase pressure on the NHS to outline plans to reduce health inequalities when it publishes its long-awaited spending plan next month.

 

 

“The world’s economy can and must deliver for the common good and the majority of its people”

A year ago, Colin Hines and Jonathon Porritt challenged the “permanent propping up of whole sectors of our economy as a direct result of our failure to train people properly here in the UK”.

They called for the training of enough IT experts, doctors, nurses and carers from our own population to “prevent the shameful theft of such vital staff from the poorer countries which originally paid for their education”.

Mass migration from developing countries deprives those places of the young, enterprising, dynamic citizens they desperately need at home

Dependence on the free movement of peoples as practised in the UK is the opposite of internationalism, since it implies that we will continue to employ workers from other countries in agriculture and service industries and steal doctors, nurses, IT experts etc from poorer countries, rather than train enough of our own.

Many individuals who migrate have experienced multiple stresses that can impact their mental well-being

Professor Dinesh Bhugrah is an authority on the stresses of migration.  Years of research have revealed that the rates of mental illness are increased in some migrant groups. Stresses include the loss of the familiar, including language (especially colloquial and dialect), attitudes, values, loss of cultural norms, religious customs, social structures and support networks.

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Porritt and Hines advocate like former Chancellor Merkel a redoubling of our commitments to improve people’s economic and social prospects in their own countries, tackling the root causes of why people feel they have no choice but to leave family, friends and communities in the first place. 

They advocate the replacement of the so-called free market with an emphasis on rebuilding local economies . . . dramatically lessening the need for people to emigrate in the first case. Hines gives a route to localization in his classic: Localization: a global manifesto, pages 63-67.

The seven basic steps to be introduced, over a suitable transition period are:

  • Reintroduction of protective safeguards for domestic economies (tariffs, quotas etc);
  • a site-here-to-sell-here policy for manufacturing and services domestically or regionally;
  • localising money so that the majority stays within its place of origin;
  • enforcing a local competition policy to eliminate monopolies from the more protected economies;
  • introduction of resource taxes to increase environmental improve­ments and help fund the transition to Protect the Local, Globally;
  • increased democratic involvement both politically and economi­cally to ensure the effectiveness and equity of the movement to more diverse local economies;
  • reorientation of the end goals of aid and trade rules so that they contribute to the rebuilding of local economies and local control, particularly through the global transfer of relevant information and technology.

Since that book was written, a gifted group of people set out the Green New Deal which – though aimed initially at transforming the British economy – is valid for all countries and most urgently needed in the poorest countries from which people feel impelled to emigrate.

Funded by fairer taxes, savings, government expenditure and if necessary green quantitative easing, it addresses the need to develop ‘green energy’ and ‘energy-proofing’ buildings, creating new jobs, a reliable energy supply and slowing down the rate of climate change.

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Likeminded advocates 

Senator Bernie Sanders and Alexandria Ocasio-Cortez, the youngest person ever to be elected in Congress, now advocate a Green New Deal in the US.

Professor John Roberts, in one of the newsletters posted on http://www.jrmundialist.org/ says: “Increasingly my thoughts return to the overwhelming need for all of us to think (and then act) as world citizens, conscious of a primary loyalty not to our local nationalism but to the human race (however confused and divided) as a whole”.

Jonathon Porritt quotes Alistair Sawday: “I remembered that the skills and the policies to reverse the damage are there; it is a matter of will – and of all of us waking up.

António Guterres, Secretary-General of the United Nations, which has developed the 17 sustainable development goals (SDGs) to transform our world,, urges all to work to “…Narrow the gaps. Bridge the divides. Rebuild trust by bringing people together around common goals. Unity is our path. Our future depends on it.” –

Jeremy Corbyn addressed the General Assembly at the United Nations Geneva headquarters last year. He concluded:

“The world’s economy can and must deliver for the common good and the majority of its people. . . But let us be clear: the long-term answer is genuine international cooperation based on human rights, which confronts the root causes of conflict, persecution and inequality . . . The world demands the UN Security Council responds, becomes more representative and plays the role it was set up to on peace and security. We can live in a more peaceful world. The desire to help create a better life for all burns within us. Governments, civil society, social movements and international organisations can all help realise that goal. We need to redouble our efforts to create a global rules based system that applies to all and works for the many, not the few.

“With solidarity, calm leadership and cooperation we can build a new social and economic system with human rights and justice at its core, deliver climate justice and a better way to live together on this planet, recognise the humanity of refugees and offer them a place of safety. Work for peace, security and understanding. The survival of our common humanity requires nothing less”.

 

 

 

 

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Rewards for failure 34: accountancy firm KPMG


Despite the blow to its reputation from the collapse of its major audit client Carillion in January, the FT reported yesterday that accountancy firm KPMG’s revenues in the UK are rising at their fastest rate for a decade. Its sternly criticised auditing of Carillion is not the only ‘reputational setback’ in the UK and overseas over the past 18 months:

  • In South Africa, it has lost audit clients and faced serious criticism over its work for the billionaire Gupta family over the past two decades.
  • It has also become embroiled in a scandal in the US after it emerged the firm was tipped off about forthcoming regulatory inspections by staff it had hired from the US accounting watchdog.
  • Meanwhile the UK accounting regulator has launched two investigations of KPMG’s work this year, including its audit of outsourcer Carillion
  • and of Conviviality, the drinks supplier.

The Financial Reporting Council is also investigating KPMG’s work for:

  • car manufacturer Rolls-Royce;
  • mattress firm Silent Night;
  • US financial services group BNY Mellon;
  • the Co-operative Bank;
  • and insurer Equity Syndicate Management.

In the face of these investigations, it is amazing to read in the FT report today that KPMG has just been appointed to investigate the delays and cost increases on the Crossrail scheme.

 

 

 

 

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Universal credit is NOT an incentive to work for the single able-bodied: 63p of every pound earned is clawed back

Focussing on undue delays causing hardship, highlighted on this site, The Times and the FT in 2017 asked ‘is universal credit – to date – a disaster?’

The FT today says “Universal credit is a plum example of how not to reform public services. The theory was broadly sound: the simplicity and real time data of the universal credit would ensure people were always better off in work. The reality, however, has proved calamitous”.

Conservative and Labour politicians, such as Jacob Rees-Mogg, Johnny Mercer, Gordon Brown and Frank Field, are now demanding that the government reconsiders the national rollout.

John Major has warned that UC could lead to a repeat of the poll tax debacle of the early 1990s, which saw riots against the then Conservative government.

A reader with a postgraduate degree was asked to look at these sections on a government-recommended benefits calculations site:

Work allowance for Universal Credit (Ed: able-bodied & childless need not apply)

If you/and or your partner are in paid work, you might be able to earn a certain amount before your Universal Credit is affected, this is called the work allowance. Your work allowance will depend on whether you are single or part of a couple and whether your Universal Credit includes amounts for housing costs, children and/or limited capability for work. The table below shows the different levels of monthly work allowance.

Universal Credit earnings taper rate

The Universal Credit earnings taper is a reduction to your Universal Credit based on your earned income. The taper rate sets the amount of benefits a claimant loses for each pound they earn. The earnings taper rate is currently 63%. This means for every pound you earn over your work allowance your Universal Credit will be reduced by 63 pence. To work out the earnings taper that applies to your award:

  1. Take your total monthly earnings figure after tax, National Insurance and relevant pension contributions have been taken off
  2. Deduct your monthly work allowance, which is the amount you can earn without your benefit being affected (if you are eligible for one)
  3. Apply the taper rate by multiplying the remaining earnings by 0.63

This is the amount that will be taken from your Universal Credit maximum amount when calculating your award.

Even the post-graduate reader found these instructions ‘far from simple’ and in no way producing a simpler and more effective system.

Esther McVey, the work and pensions secretary in charge of the scheme, confirmed last week that families will be poorer under UC. She did not deny reports that millions of families could be up to £200 a month worse off when it is fully rolled out.

The chairman of the Commons work and pensions select committee has described the project – running well behind schedule – as a “shambles, leaving a trail of destruction” and in its assessment this year, the National Audit Office doubted whether the system would ever deliver value for money.

Last year Leigh Richards commented on last November’s news: “ Even Scrooge might have balked at Universal Credit”.

The current Universal Credit system is NOT ‘fit for purpose’

 

 

 

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