Friday, 24 August 2012

Beggaring the nation | Taxing the unemployed

The campaign against welfare is the centrepiece of the coalition government's policy agenda. It started with the Chancellor George Osborne, in his emergency Budget, announcing cuts to Britain's welfare budget of £20 billion. That has now expanded to over £30bn, some as yet unspecified.

To cut welfare so drastically has necessitated the government engaging in an unprecedented campaign of vilification against anyone on welfare. This has included the Prime Minister casually talking about people "sitting on their sofas waiting for their benefits" and his welfare minister condemning "people who sit at home on benefits doing nothing."

Some may be aware that David Cameron has promptly popped off on holiday after spending a demanding two weeks sitting in the best seats at the majority of Olympic venues. This divide-and-rule strategy is coming to Croydon as the next tranche of welfare cuts targets council tax benefit.

The government is devolving responsibility for council tax benefit to local councils, which sounds logical enough, but is cutting the amount provided so that councils will be unable to fund all those who need it. All interested groups are invited by Croydon Council to contend for who should and who shouldn't get council tax benefit any more.

So the poor, the sick, the elderly, the disabled and those with children can all fight among themselves.

What this government and its tabloid cheerleaders fail to inform us is that over the same period as they propose to cut £30bn from the unemployed, the elderly, the poorly housed, the disabled, and those with children they are giving away far more than £30bn in tax breaks to some of the wealthiest people in Britain - through reduced taxes on the biggest corporations and the cut in the 50p income tax rate for the super-rich.

Meanwhile, under Croydon Council's proposals, someone on Jobseeker's Allowance (JSA) is to be subject to an effective 5 per cent weekly tax, paying £3.50 out of their £71 JSA. For the steeply rising number of youth unemployed, this represents an even greater proportion of their allowance, which is just £56 per week.

This is a first - people on benefits made to pay tax. Britain has the lowest unemployment benefits in Europe. As the government's failing economic policies increase unemployment, that same government proposes taxing people on benefits that barely support sustenance in London. Only the Eton-educated millionaires on the front bench of the Con-Dem government could think that this is the obvious place to look for extra tax revenues. 

One of the abiding memories of my formative years was the bile spewed from government ministers and sections of the tabloid press towards single mothers. I remember it because of the impact it had on me and my single mother, who did an amazing job raising me and my sister. That hate campaign, combined with a false sense of pride, meant that my mum did not claim the means-tested benefit to which she was entitled.

The same thing happens today - parents not claiming tax credits and pensioners refusing to take up Pensions Credit or their free TV licence. While we often hear much about the £1.5bn of benefit and tax credit fraud, there is a corresponding silence about the £16bn annually that is left unclaimed - let alone the billions lost through tax avoidance by the likes of the former Conservative Party treasurer Lord Ashcroft.

But this government is going well beyond the rhetoric of its Thatcherite predecessors. It is not only demonising people, but taking away their rights - rights established by our welfare state to housing and a decent income if we are unable to work. French IT company Atos has a £100 million contract to reassess every disabled person on benefits. The government wants a million fewer people claiming, but denies Atos has been set targets to remove benefits.

Whatever the truth 40 per cent of people initially denied their benefits are reinstated on appeal, and that figure rises to 70 per cent if they are represented by a lawyer. It's a wry joke among disability campaigners that the government doesn't give Atos about them.

Housing benefit is being similarly restricted. After successive governments selling off council homes and failing to build to replace the social housing stock - thus fuelling the inflation in the private housing market, especially in London and south-east England - much of the welfare state's budget is now being spent in giving large amounts of money to private landlords, unencumbered by the regulations or rent tribunals of the past.

The government's solution is neither to build new council housing - which would be a huge and necessary economic stimulus - nor to cap the rents that landlords charge, but to cut housing benefit which will inevitably force people out of their homes. Croydon is one of the London boroughs seeking to "exile" local residents by relocating their tenants to other parts of England, tearing up community and family ties.

We mustn't be drawn into their beggar-thy-neighbour approach. Instead we should come together to campaign against the cuts wherever we can - in your local community group, in your trade union, in your political party and on the streets on October 20.

Written by Andrew Fisher of  the LRC
Published by Inside Croydon/Morning Star