Bedroom tax condemns homes to demolition because they are too expensive for families

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The obvious solution: The government should be helping build new social housing – not forcing the demolition of what little there is.

If the government really wants to make larger social accommodation available to overcrowded families, why are housing associations knocking them down?

They have to go because the Bedroom Tax has made them too expensive, according to The Guardian.

The story, published yesterday, is another nail in the coffin of Iain Duncan Smith’s credibility. It doesn’t matter how many polls the Conservatives produce to support their claim that people agree with them; in practice, it simply doesn’t work.

Housing associations are finding three-bedroomed properties impossible to maintain. They cannot let them out, sell them or keep up with the costs of keeping them while they are empty.

All of this has serious implications for the Coalition government that voted the Bedroom Tax onto the statute books as part of Mr ‘Returned To Unit’ Smith’s hugely unpopular – and now proving to be unworkable – Welfare Reform Act last year.

On Tuesday, MPs will debate the future of the Tax, when Labour members are expected to vote for its immediate repeal. Senior Liberal Democrats are also believed to have doubts – The Guardian (again) has quoted Danny Alexander’s father as saying it is “particularly unfair”.

Labour’s Rachel Reeves has overcome a shaky start in her role as shadow Work and Pensions Secretary to get right on-message with this. According to The Guardian report, she said: “This incompetent and out of touch government seems oblivious to the perverse and costly consequences of this unjust and unworkable policy.

“Not only is it hitting 660,000 vulnerable households, including 440,000 disabled people; the costs to the taxpayer are mounting as people are pushed into more expensive private rented accommodation while existing social homes are left vacant.”

Of course, Dear Reader, she’s right. You read it here first – all the way back in October last year.

Surely it makes more sense to have someone living in these properties, rather than losing them altogether? Does the government have an answer for this?

Apparently not. A government spokes-robot trotted out the same tired nonsense we’ve all come to despise: “The removal of the spare room subsidy is a necessary reform that will return fairness to housing benefit. We’ve been clear that hardworking people should not be subsidising tenants living in properties that are too large for their requirements.”

Let’s all remember that there never was a spare room subsidy for the government to remove. It never existed. Therefore its removal is not a necessary reform; it can never be vital to remove something that is fictional. Also, the removal of a fictional thing cannot restore fairness anywhere.

Hard-working people probably shouldn’t be subsidising tenants who are under-occupying, but then hard-working people were never the only ones paying for this to happen. Everybody in the UK pays taxes one way or another – even children.

And while we’re on the subject of what hard-working people subsidise, why is it bad for them to help people stay in the social housing that was originally allocated to them, but good for them to help massive corporations keep their payroll costs down by paying tax credits, housing benefit and council tax reduction costs for people earning less than the Living Wage? Why is it good for them to pay the cost of MPs’ energy bills as well as their own?

“Consent from the Homes and Communities Agency is required before any social housing provider can dispose of a site on which social housing stood and will ensure that public investment and the needs of tenants are protected,” the robot continued, but we should all know that this will be no obstacle.

Demolition of social housing means land becomes available for private developers to build new, luxury homes for the very rich.

That’s where the big money is.

Conference vote leaves Lib Dems facing both ways on Bedroom Tax

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“So what’s new?” you’re probably thinking.

Well, the passing of the motion to condemn the Bedroom Tax as official Liberal Democrat policy indicates that there is a huge rift between the way grassroots Lib Dems think and what the Parliamentary Party is doing.

But is it enough to force a split in the Coa-lamity – sorry, Coalition – before the next election, as Vince Cable has hinted?

Who knows? It’s the Lib Dems.

It could indicate that time is running out for the ‘Orange Book’ Liberal Democrats, who include Nick Clegg and Danny Alexander among their number – despite claims by the Daily Telegraph that they have become more influential.

My brother, the blogger beastrabban, told me of a recent conversation between a friend of his and a former Liberal Democrat MP, in which the ex-Hon Gentleman made his opinion of the Orange Bookers – the party’s right-wingers – perfectly clear: “They’re not Liberal”.

This certainly seems to be the feeling of the party’s rank-and-file. Julie Porksen, the Northumbrian member who tabled the Bedroom Tax motion, said: “We are Liberal Democrats and we do not kick people when they are down.”

This may have come as quite a shock to Messrs Clegg, Alexander, David Laws (editor of the Orange Book) and their nearly-Tory buddies, who have been merrily kicking people when they were down ever since they decided they weren’t going to abolish student fees after all, but would help the Tories increase them instead.

Since then, Parliamentary Liberal Democrats have helped force some of the worst injustices of modern times onto the British people, including the Health and Social Care Act, the Welfare Reform Act, the Jobseekers (Back to Work Schemes) Act, the Localism Act and, yes, the Bedroom Tax.

Nick Clegg is clearly a long, long way out of touch with his members. All he could say about it at conference was that “you would have to be made of granite” not to have feelings on the issue.

Would he commit to changing it? No.

So it seems the Liberal Democrat leader is refusing to carry out the will of his party. I wonder what they’re going to do about it?

One way Clegg could save his career might be to bring the Coalition to an early end, as suggested by Vince Cable at a fringe event arranged by the Independent.

But it seems likely Cable was just causing mischief. “It is obviously a very sensitive one. It has got to be led by the leader,” he said.

Again, this would put Clegg in a very awkward position. Splitting the Coalition means giving up the only power or influence he is ever likely to have.

At the end of the day, it’s not going to make much real difference. After the 2015 election his party will probably have fewer MPs than the DUP, if local election results are any indication. He must take responsibility for that – his leadership is bringing his party to the brink of oblivion.

Nick Robinson’s speculation that Clegg could jump from coalition with Cameron to an alliance with Ed Miliband is, therefore, premature.

But there’s another Liberal Democrat conference to come before the general election. Maybe, by then, Nick Clegg will have grasped that he needs to put his party’s best interests before his own ambitions.

Employee ownership: Has the government actually done something right?

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Long live co-operatives: At long last, it seems the government (or at least the Liberal Democrat side of it) is offering support to the most successful and supportive business model available – and we can hope that Labour will do the same. But where are the Conservatives in all this?

Today, July 4, is officially Employee Ownership Day – did you know that?

Employee ownership means all employees of a business have a significant and meaningful stake in it. This could include financial participation but must include provision of access to organisational structures. Where financial participation does take place, there is currently no set rule on what percentage of issued shares is a significant and meaningful stake, and this is something that I believe should be changed to ensure it is worthwhile.

Employee ownership can generally take one of three forms:

• Direct employee ownership – employees become individual owners of shares in their company;
• Indirect employee ownership – shares are held collectively on behalf of employees, normally through an employee benefit trust; and
• Combined direct and indirect ownership – a combination of individual and collective share ownership.

The Employee Ownership Association estimates that UK-based employee-owned companies had a turnover of more than £30 billion and employed more than 130,000 people in 2011. Employee-owned businesses enjoy greater staff retention, innovation and motivation than non-employee owned businesses and, in turn, these deliver wider economic benefits including increased productivity, profitability and more resilience to economic shocks.

The sector has grown by more than 20 per cent since the start of the recession in 2008; while 65 per cent of conventional businesses survive their first three years, 90 per cent of co-operatives remain in business; and 37 per cent of directorships in co-operatives are held by women, compared with 13 per cent in leading UK companies (this last point should not be relevant in this day and age, but the gender gap is quite clearly still there, so it is).

All of the above is from a government press release issued today, but eerily resembles comments made on this blog in the past – like this one or this.

According to the government, not only will this successful model of business be easier to understand and quicker to set up after Vince Cable publishes new guidance today, but the government is also consulting the public on the possibility of providing two new tax reliefs to help indirect employee-owned businesses get themselves set up.

To my way of thinking, this seems spectacularly useful, but this is the Coalition government so there must be a catch. Right?

It seems the Department for Business, Innovation and Skills will be publishing:

• Guidance for employees who want to request a move to employee ownership;
• Model documentation on a move to employee ownership with accompanying BIS and HMRC guidance;
• Guidance from the Employee Ownership Association explaining the different models of employee ownership; and
• Guidance from Co-operatives UK on how co-operative principles and ways of working can be implemented into employee-owned businesses.

“The government is committed to supporting this business model and will today launch a consultation on providing two new tax reliefs to encourage employee ownership,” according to the press release.

“This sector has the potential to benefit the wider economy, therefore the government is seeking views from people both inside and outside the employee-ownership sector to ensure the reliefs are supportive and effective.

“The Employee Ownership Association, in conjunction with the government, has helped to organise a number of events in the UK where employee-owned businesses are opening their doors to showcase the benefits of their business model.”

Nick Clegg actually said something I can support: “The benefits of employee ownership are clear. Staff who have a stake are more motivated and are rewarded for thinking in the long-term. That’s good for business and good for families, as it means lower absenteeism and lower levels of staff turnover.” This is something I have been saying for many months; it’s as though he has been reading this blog.

He said the government has set aside £50 million per year, starting next April, to give businesses and employees an incentive to adopt employee-owned models, and will be providing Capital Gains Tax relief for those who sell a controlling stake in a company to their staff.

It will be interesting to see how many firms take up the offer; from that information we can work out whether the greed that increased bosses’ pay by 700 per cent over the last 10 years – while employees got a miserly 27 per cent rise – is still rampant.

There is also a question over whether this is the right time – the middle of the longest economic slump in recent history.

It could be!

Cable reckons “there has never been a more important time to support different ways of running a business”.

He said: “The evidence is clear that employee-owned businesses not only help us build a stronger economy, but boost the retention, innovation and motivation of their employees.”

Co-operatives UK Secretary General Ed Mayo said his organisation would be supporting today’s events by launching its own publication, Simply Buyout – an essential guide to employee buyouts and becoming a co-operative employee owned business.

The consultation on the two new tax reliefs can be found online here. This stage of it will run until September 26 this year. The government will publish a summary of the responses in the autumn, and they will help to inform draft legislation.

The first is a Capital Gains Tax relief which would apply when the controlling share of a business is sold into an indirect employee ownership structure, and the government hopes it will encourage individuals wishing to sell their business to consider it.

The second tax relief is an Income Tax and National Insurance Contributions (NICs) exemption, that would allow indirectly employee-owned companies to pay employees a certain amount every year that is free of Income Tax and NICs. There would also be an employer NICs exemption for the company.

The government announced in the March Budget that it would provide £50 million annually, from 2014-15, to support employee-ownership models and to incentivise growth of the sector.

The press release features a quote from yet another Liberal Democrat – Danny Alexander – who said: “We want to encourage greater use of employee ownership in UK businesses and want to ensure that we provide reliefs that are supportive and effective. Views are invited from both people inside and outside the employee ownership sector.”

So that’s three high-ranking Liberal Democrats speaking up for it, and no Conservatives. Interesting. Do the Blue Meanies have nothing to say in favour of the proles part-owning the firms where they work?

And what about Labour? Does the Party of the Workers support this activity? This Party member hopes it does.

It will be hard to tell from the press coverage, however.

At the time of writing, there hasn’t been any.

MPs’ shocking behaviour is par for the course in Cameron’s government

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Feeling a bit peaky, David? But the revelations about your Tory friends and Liberal Democrat partners should hardly come as a surprise!

It must have been very difficult for David Cameron, returning from his spectacularly ill-timed holiday in the sun to find that his colleagues had been having a much better time than he has – at home.

It seems that he returned to “crisis talks” at Downing Street, where aides told him of a “sensational love affair” which has potentially significant political implications for him. Apologies for the hyperbolic language involved, but this information comes from the Daily Mail.

The newspaper said it could not disclose the identities of the people involved in these shenanigans, or any details of the relationship, for legal reasons, so the speculation machine has probably gone into overdrive and by the time this reaches your screen, The Sun has probably already disclosed the names of the co-respondents.

For those of us who aren’t that clued-up, it’s great fun to speculate. The paper said they are middle-aged figures, the affair has now concluded, and it does not involve anyone serving in the Cabinet.

Who could it be? Longtime readers of this blog will know that Vox Political has long harboured hopes of a Michael Gove legover crisis – or indeed a Michael leGOVEr crisis (see what we did there?) – but in all honesty this seems unlikely until medical evidence can prove that he is compatible with a human female.

So who, then? Nadine Dorries and Nigel Farage? Peter Bone and a human being? Doubtful. Boris and… Boris and-

Hmm.

It’s probably best not to pursue that line of inquiry. Far more interesting to sit back and wait for the ‘poshed-up’ version of the Jeremy Kyle show, in which all will be revealed.

With the curtains closed, of course – not as the badge of a serial skiver, but simply to avoid the shame of having to admit watching an episode of Kyle.

The worse news is, this wasn’t the only story breaking about government misdeeds. It seems that Cameron’s Liberal Democrat Coalition partners have been playing “pork barrel” politics (yes, it’s the Daily Mail again) by diverting taxpayers’ money into key Liberal Democrat-held constituencies.

We now know that a £2 billion scheme to refurbish roads, pavements and bridges in Nick Clegg’s Sheffield Hallam constituency has been reversed, in a deal with private business that took the project off the government balance sheet. A private finance initiative? We all know that PFI projects don’t turn out well for anyone involved other than the companies, so Clegg may have given himself a shot in the foot, rather than a shot in the arm.

The Mail also reports dodgy dealings by Danny Alexander. Apparently Beaker insisted on extra funds for mountain rescue teams, a VAT cut for ski lifts and the retention of the state subsidy for the Cairngorm Mountain Railway – all in his Highlands constituency.

And Lib Dem Chief Whip Alistair Carmichael (who?) apparently forced the abandonment of plans to cut the coastguard service, affecting his Orkney and Shetland constituency, claiming it was “a Coalition matter”.

So it must have been very difficult indeed for the comedy Prime Minister to return from holiday and learn of such appalling behaviour.

Difficult, but not a surprise.

Let’s face it – it’s little different from the way they behave when he’s at work.

Thinktank’s schizoid report will not help Osborne to secure more cuts

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Schizoid report: José Ángel Gurría, secretary general of the OECD. He’d probably object to the way we’ve defaced his sign, but it now provides a more accurate description of his organisation’s opinions.

How can the Organisation for Economic Co-operation and Development tell George Osborne that he should invest in infrastructure projects but continue with his policy of cutting public spending, when the first public spending he cut was infrastructure projects?

Is this a sign of the delirium into which the western economies are sinking, partly through slavish adherence to neoliberal nonsense – in the face of all the facts – and party through a lack of raw intelligence?

The OECD, according to The Guardian, has revised down its economic growth forecast for the UK. What a surprise; they haven’t revised our growth upwards since before Osborne became Chancellor – and that alone indicates where the problem lies.

It says spending cuts and a lack of consumer and business confidence are restricting what we should all call “the recovery” only in mocking terms.

But, as the newspaper reports, “it [the OECD] backed George Osborne’s plans for further spending cuts, saying: ‘With a high budget deficit and gross government debt rising to 90 per cent of GDP in 2012, further fiscal consolidation is necessary to restore the sustainability of public finances.'”

What? It’s still supporting the discredited view that when public debt hits 90 per cent of GDP, growth is slowed? Hasn’t that idea been comprehensively rubbished – not only on paper but in the fact that UK growth hit standstill point the instant Osborne came in as Chancellor and inflicted his policies on us all?

It isn’t the amount of debt that’s the problem – its the stupid things that blinkered upper-class idiots do in response!

The OECD said the Labour market was “resilient”, so it obviously has been paying too much attention to DWP press releases when it should have looked up the facts. According to the Resolution Foundation (yes, another thinktank), as reported in The Independent, “The jobs market remains weak and is likely to continue to struggle well into the second half of the decade, making this a more severe downturn for employment levels than the two previous recessions”.

The article states: “The Resolution Foundation has performed an analysis of the total adult employment rate – which reflects the increase in the size of the population and the growth of the available workforce – and found that there remains a “jobs gap” of 930,000. This is the number of new jobs that would be required to restore the employment rate from its present level of 58.5 per cent to the 60.3 per cent recorded in 2008. This jobs gap has actually grown from 830,000 in the final quarter of last year.”

Once again, we see the facts do not support Coalition government press releases.

The OECD’s claim that average real earnings are “weak”, on the other hand, is realistic and gives the necessary perspective to a report from the Office for National Statistics that the total number of weekly hours worked across the economy hit a new record high of 950.3 million in the first quarter of the year.

If everybody’s working so much, why haven’t we got any money? Answer: Because the Tory-led government has been pushing wages downwards, ever since it came into power. Average earnings for bosses of FT350 companies have rocketed upwards, but the worker on the street had a pay rise of just 0.8 per cent last year. Look at the way benefit increases have been pushed below the rate of inflation (the DWP again!) in order to make the unemployed desperate to take whatever work they can get – no matter how poorly-paid – and to put those who have jobs in fear of losing them, so that they won’t be demanding pay rises anytime soon.

Back to the OECD: It wants a house-building programme to spur jobs growth. Without this, it warned that house values could overheat, sparking another price bubble. Isn’t that what George Osborne wants? Look at the so-called “second-home subsidy” he announced in the March budget, when he said the government would underwrite a percentage of new house purchases. Already we have seen warnings (from Sir Mervyn King in this Vox article) that it will create a price bubble.

So not only is Osborne right; he’s also wrong. Growth is down because of his policy of cuts, but he should continue making them. Unemployment is down – but the jobs gap has grown.

Also, not only is Osborne wrong; he’s very wrong. Low wages mean economy-boosting demand is also low – but the government is pushing wages down still further. House-building is needed to spur jobs growth and prevent a price bubble – but he isn’t building houses and he is actively pursuing the creation of a price bubble.

That’s what the OECD report says. There’s no way Osborne should be using it to support his policies but I bet he will.

If I were the secretary of state in one of the government departments he’s trying to squeeze for more cuts, I would be phoning the local mental hospital, saying a dangerous madman was loose in Whitehall and demanding that he should be sectioned.

But it seems that, instead of this, the ministers who’ve dragged their feet will be subjected to a grilling by the all-new ‘Star Chamber’, which is the name for the public expenditure committee Osborne has set up. Apparently ‘Star Chamber’ has a “mystique” about it (according to The Guardian); in fact it will consist of Osborne, Danny Alexander and those ministers who’ve given in and agreed cuts, haranguing the dissenters until they fold up like cheap thugs who’ve been punched in the kidneys once too often.

The fact that they will all eventually capitulate means we can laugh at them next time they’re on television trying to act tough, but the whole sorry story leaves us with one immutable fact:

This is no way to run an economy.

Lib Dem denial machine moves into full swing

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Some Tory drone – I think his name was ‘David Cameron’ released an image earlier today, claiming 24 million people were £600 better-off as a result of this month’s changes. This is what the poster SHOULD have said.

We have all seen the Liberal Democrat Party losing its grip on reality during its years in Coalition with the Conservatives.

One of my favourite examples of this was the claim that the Lib Dems had mitigated the hated Health and Social Care Bill (as it was then) – Andrew Lansley’s NHS privatisation effort – to ensure that rampant privatisation would not take place, and that they could therefore vote in favour of it with a clear conscience.

Earlier this year, of course, we all learned about SI 257, the statutory instrument that would have imposed mandatory marketisation on nearly every NHS service, without the requirement of a Parliamentary debate or vote. Clearly the Lib Dems had been hoodwinked. There was a massive public campaign against this betrayal and SI 257 was withdrawn, but only to be replaced by something that was so vaguely-worded that it is almost as bad (possibly worse, in fact).

Now, they’re crowing about the fact that the Personal Allowance – the amount a person can earn before paying Income Tax – has risen to £9,440. Apparently this means people on low incomes are now £600 per year better off than they were at the time of the last general election, in 2010.

But wait! What about all the benefit changes – by which I mean cuts – that came in at the same time? We’ve all seen the figures that show they will make low-earners £891 per year WORSE-off.

Put those together and, no matter which way you slice it, people earning less than £9,440 will be up to £291 worse off than in 2010.

Meanwhile, the top rate of Income Tax has fallen from 50p in the pound to 45p, for people with incomes of more than £150,000 – that means people earning more than £1 million will be £100,000 better-off.

Danny Alexander was on Radio 4’s Today programme, trying to talk up the changes. He said the Coalition “is working hard to help those on low and middle incomes” – into poverty?

Other changes mean the amount pensioners can take home every year will no longer rise with inflation but has been frozen, meaning they will be worse-off this year. It has been dubbed the “Granny Tax”. They do get a rise in the state pension, by 2.5 per cent – but that only equals £110 per week.

And Mr Alexander was also keen to talk about the so-called “Tycoon Tax”, which imposes a limit on the amount of tax relief people can claim by investing in business or donating to charity.

This – again – avoids the possible consequences of such a measure. How many businesses and charities will fall into difficulty because benefactors no longer have the financial incentive to help them out? I’m not sure, so I am unwilling to condemn it immediately – but I fear the worst.

One conclusion we can draw from this – and previous changes – is the obvious:

Liberal Democrats ignore their mistakes.

The denial machine is not only in full swing – it’s in danger of overheating.