Labour’s spending plan could humiliate the Tories

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“There is an alternative” – and it doesn’t have to cost more than we’re spending now.

It seems some people are upset that Labour has announced it does not intend to increase public spending, if elected into office after next year’s general election.

This is a perfectly reasonable reaction, depending on the amount of information available to the person holding that opinion.

In other words, if you don’t know why Labour has made this decision, it is perfectly reasonable to assume that the former Party of The Left has turned Tory-lite.

That’s why we’re hearing that Labour will simply continue Tory policies; that the main three parties are “all in it together” (to overuse a hackneyed and devalued phrase).

But evidence is available to suggest that this is a big mistake.

To finance extra spending, Labour would have to borrow more money – but this would push up interest rates and create a potential disaster for people with mortgages and loans to pay off.

According to Modern Monetary Theory – an economic method that seems to have earned credence with all the main parties – government borrowing is not undertaken to finance its spending, but to maintain a target interest rate.

In times of recession, businesses borrow more and households find it hard to save money for a rainy day (as the saying goes). We have spent most of the last decade either in recession or in the slowest recovery in British history and the private sector simply doesn’t have the spare cash to pay higher interest demanded on loans in the wake of higher government borrowing.

Labour wants to safeguard those businesses; Labour wants to safeguard your homes.

The alternative would cost any government much more in the long run.

It’s as simple as that.

So Labour has set a spending target that is the same as the Conservatives’, ensuring that interest rates can be kept under control.

This doesn’t mean it will continue with Conservative-led spending plans. That would be a betrayal of Labour’s core voters.

Instead, it seems more likely that Labour will seek to stimulate the economy by taking funding away from wasteful areas – this blog would certainly wish to see less public money given to private contractors who pocket half of it as profit – and investing it in economic growth.

With more money flowing through the system and coming back to the Treasury in taxation, it will then become easier to relax restrictions on interest rates, which will help the government with its debt issue (this has to do with the way governments borrow money, issuing bonds at fixed rates of interest, and is a story for another day).

If Labour’s plan works, it will mean humiliation for the Conservatives and the Liberal Democrats, as Labour will have spent exactly the same amount doing it as those other parties have been spending for the previous five years – to little effect.

Do not misunderstand; it is perfectly possible that Labour’s spending plans could be entirely wrong-headed! Labour spent most of the last 20 years experimenting disastrously with neoliberal thinking that, continued and concentrated by the Coalition government, has led us to the current pretty pass.

In this case, it seems the Devil really is in the detail.

But the overarching strategy is sound and Labour should not be criticised for it.

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The minimum income is 2.5 times what people get on benefits – but still they are labelled scroungers

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adequate, benefit, benefits, Child Benefit, Conservative, Consumer Price Index, couple, CPI, debt, Democrat, earn, for hardworking people, government, increase, joseph rowntree foundation, JRF, Lib Dem, Liberal, living, loan, Mike Sivier, mikesivier, minimum income, out of work, pension, people, politics, price, rise, scrounger, social security, standard, tax allowance, tax credit, Tories, Tory, unemployment, Vox Political, wage, welfare, Wonga

The numbers speak for themselves: Under ‘Adequacy of safety-net benefits’, EVERY SINGLE INCOME GROUP has lost out. While others have suffered a great percentage drop, single working-age people remain the least able to make ends meet.

“How much money do you need for an adequate standard of living?”

That is the question posed every year by the Joseph Rowntree Foundation – and every year the organisation calculates how much people have to earn – taking into account their family circumstances, the changing cost of these essentials and changes to the tax and benefit system – to reach this benchmark.

This year’s research finds:

A lone parent with one child now needs to earn more than £27,100 per year – up from £12,000 in 2008. A couple with two children need to earn more than £20,200 each, compared to £13,900 each in 2008. Single working-age people must now earn more than £16,200, up from £13,500 in 2008;

Despite social and economic change, the list of goods and services different families need to live to an adequate level is very similar to that of the original study in 2008 – but people’s ability to afford them has declined. Overall the cost of a basket of essential items has risen by a massive 28 per cent over six years – much higher than the 19 per cent rise claimed by the official Consumer Price Index – while average wages have increased by just nine per cent and the minimum wage 14 per cent;

Increased tax allowances have eased the pressure somewhat for some households, but the freeze to child benefit and ongoing cuts in tax credits have outweighed this for low-earning families with children.

Out-of-work benefits have fallen further and now provide just 39 per cent of what single, working-age people need to reach a Minimum Income Standard.

On the other hand, pensioner couples who claim all their allowances receive 95 per cent of the amount required.

The bottom line is that the Conservative-led government has been hammering the working poor and people on benefits, while claiming to be helping them. The minimum income necessary for an adequate living standard, according to JRF research, is no less than two-and-a-half-times what people on benefits receive. That is an appalling disparity in the sixth-richest country in the world.

It also creates a danger that more people will look to loan suppliers like the government’s favourite (Wonga) for short-term help – at the cost of going into disastrous long-term debt.

Slow earnings growth and price increases have made all households worse off on average, relative to the MIS, the report has found.

The conclusion is a disaster for the Coalition’s “hardworking” people: “In the past six years the more important determinants of whether low-income households can afford the minimum budget have been the increasing cost of living relative to earnings and benefit cuts for households in and out of work.

“For working families with children, if these cuts continue, the opportunity to reach an acceptable living standard may not improve, even as wages start rising again in real terms.”

And the Conservatives have the cheek to use the slogan “For hardworking people”.

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The State of Osborne: a visitor’s guide

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A moment of crisis for David Cameron as he realises it is unlikely that George Osborne has the faintest idea what the Autumn Statement means.

If anybody else had prattled on for 50 minutes while hardly uttering a single sensible word, they would have been consigned to a mental hospital forthwith.

But this is Coalition Britain, and the speaker was George Osborne, the man who likes to tell us all that he is in charge of the nation’s finances. Thanks to his government’s Department for Work and Pensions, nobody is allowed to have mental illnesses anymore; after this speech, it seems likely we all have an idea about the reason for that.

A 50-minute speech is a lot of verbiage, and it is certain that worthier journalists across Britain – if not the world – have already analysed it to exhaustion. Allow me to let you into a secret:

They’re probably trying too hard.

Most of the speech was about putting Labour down. The Opposition has made all the headway over the past few weeks, and we all knew Osborne was under orders to change the mood music of the nation in time for Christmas.

Did he manage it? Not really. His speeches always come across as strained events, where he’s making an effort to be clever without ever achieving it. As a result, the message gets lost. We can therefore discount the Labour-bashing.

That leaves us with what he actually said. Even here, his meaning was at times opaque. What follows is an attempt to provide a handy guide to George-speak, for anyone unfortunate enough to have heard him yesterday.

Osborne: “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong.”/Meaning: “I am lying. Austerity failed miserably and the economy flatlined. A few months ago I realised that we would have nothing to show at election time so I turned the spending taps back on, with Help To Buy and Funding For Lending. I know that these are exactly the sort of Keynesian economic levers that I preached against for three years but I’m hoping that nobody noticed.”

The hard work of the British people is paying off, and we will not squander their efforts./Osborne appears to be celebrating his three years of stagnation. He inherited growth and decided to trash it. (MagsNews on Twitter)

There was no double-dip recession./“Phew! Lucky escape there!”

At the time of the Budget in March, the Office of Budget Responsibility forecast that growth this year would be 0.6 per cent. Today, it more than doubles that forecast and the estimate for growth will be 1.4 per cent./“Please God don’t let anybody remember that three years ago, the forecast for this year was 2.9 per cent.”

Today in Britain, employment is at an all-time high… We have the lowest proportion of workless households for 17 years./These jobs have increased the numbers of the working poor. Too few are full-time; too many are part-time, zero-hours or self-employed, serving up no National Insurance contributions from employers, no holiday or sick pay, or making contractors work long hours for less than the minimum wage.

The number of people claiming unemployment benefit has fallen by more than 200,000 in the past six months—the largest such fall for 16 years./“And we have imposed sanctions on more people on Jobseekers’ Allowance than ever before, in order to produce that figure.”

By 2018-19, on this measure, the OBR does not expect a deficit at all. Instead, it expects Britain to run a small surplus. These numbers mean that the Government will meet their fiscal mandate to bring the structural current budget into balance and meet it one year early./Although of course the books were initially supposed to be balanced by 2015. (Huffington Post live blog)

This year, we will borrow £111 billion, which is £9 billion less than was feared in March./…and £41 billion more than forecast in 2010.

We will cap overall welfare spending./But this will not include the state pension (half the social security budget) or the most cyclical jobseeker benefits./”A living wage would mean less dosh on in-work benefits; letting councils build would mean less subsidies for private landlords.” (Owen Jones on Twitter)

Pensioners will be more than £800 better off every year./But as usual he’s ignoring the VAT elephant in the room. (Mark Ferguson on Twitter)

We think that a fair principle is that, as now, people should expect to spend up to a third of their adult lives in retirement. Based on the latest life expectancy figures, applying that principle would mean an increase in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s./But life expectancy depends on where you live and how much money you have, meaning the poor continue to pay more towards the pensions of the rich./”Current pensioners better off – future pensioners paying for it. What was that about “making our kids pay for current spending” George?” (Mark Ferguson of LabourList on Twitter)

Most wealthy people pay their taxes and make a huge contribution to funding our public services; the latest figures show that 30 per cent of all income tax is paid by just one per cent of taxpayers./Estimates of the amount of tax that is not collected range between £25-£120 billion per year and it is not the poor who aren’t paying up.

This year the rich pay a greater share of the nation’s income taxes than was the case in any year under the last Labour Government./Because they now have more income. Simple really. (Tom Clark of The Guardian, on Twitter)

Today we set out in detail the largest package of measures to tackle tax avoidance, tax evasion, fraud and error so far this Parliament. Together it will raise over £9 billion over the next five years./Including capital gains tax for foreign investors on sales of UK property, which has nothing to do with tax avoidance/evasion, fraud or error.

We must confront this simple truth: if we want more people to own a home, we have to build more homes… The latest survey data showed residential construction growing at its fastest rate for a decade./The rate of house building is at its lowest peacetime level since the 1920s

This autumn statement has found the financial resources to fund the expansion of free school meals to all school children in reception, year 1 and year 2, announced by the Deputy Prime Minister and supported by me./On Wednesday, the Lib Dems and Michael Gove’s education department argued over who had to pay for it.

Extra funding will be provided to science, technology, and engineering courses [in universities]. The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential./And pushing thousands into the hands of debt collectors.

The best way to help business is by lowering the burden of tax. KPMG’s report last week confirmed for the second year running that Britain has the most competitive business tax system in the world./KPMG would know – it writes the tax system and also runs some of the larger tax avoidance schemes.

From April 2015 we will introduce a new transferable tax allowance for married couples… Four million families will benefit, many of them among the poorest working families in our country./Osborne says the Tories are backing British Families – but only ones who are married it seems. (Mark Ferguson on Twitter)/While the new tax arrangements bribe families to marry, the benefit cap will bribe big families to split up. (Tom Clark on Twitter)

We are all in this together./The biggest lie of this Parliament.

We are also helping families with their energy bills./Commence the cutting of the “green crap”. This from the “Greenest government ever”. (Mark Ferguson on Twitter)

Next year’s fuel duty rise will be cancelled./This is a cut in a tax that was never imposed in the first place.

We are going to abolish the jobs tax on young people under the age of 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people./Young people will therefore have less chance to get contribution-based benefit. National Insurance assures people their pension contributions – except when it isn’t paid. So they will have no contributions to show for any years they worked before 21 and will have to work until their late 60s.

The cost for a business of employing a young person on a salary of £12,000 will fall by over £500./This is a bonus for businesses, not employees.

“Jobs tax” – it’s ludicrous, isn’t it? National Insurance has been a respected part of British life for more than 100 years but Osborne, living as he does in a mythical Victorian-era golden age that never actually existed, thinks it is a “jobs tax”. Either that or he’s still bruised by the fact that Labour’s labelling of the under-occupation charge as a Bedroom Tax caught on with the public.

Shadow Chancellor Ed Balls got on his feet and immediately attacked Osborne’s “breathtaking complacency” for denying the drop in living standards faced by everyone in the country, with families already £1,600 per year worse off. Osborne laughed. He thought that was funny.

The Shadow Chancellor pointed out that we are enduring the slowest recovery in a century, and that average real wages will have dropped by 5.8 per cent by the end of the Parliament (except for fatcat business bosses).

He was having a hard time getting his points across, however, because Tory MPs were heckling him very loudly. Owen Jones tweeted, appositely, “Do the Tories think that a bunch of braying MPs dripping with privilege, while ordinary people’s living standards crash, is good TV?”

Maybe they did. Maybe they thought they had the public on their side.

Let’s have a look at a few comments from the public – courtesy of the Huffington Post:

“Planning to kill more people, George?” (Robin Stacey)

“Spend more you wet lipped monkey.” (Will Moriarty)

“No one has an ounce of faith in anything you say, you parasitic pool of curdled warthog’s puke.” (Anthony Nicholas)

And finally: “Hope you end the speech with your resignation x” (Joanne Wood – and yes, she did mean to end with a kiss).

What a shame Osborne did not follow her advice.

 

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Public and private debt reach record levels under ConDem Coalition

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Household debt in the UK has reached a record £1.43 trillion, according to the BBC. What a marvellous achievement for Gideon George Osborne to put next to his already-record public net debt of £1.212 trillion (excluding interventions) or £2.184 trillion (including them).

If you’re surprised at that, don’t be – he needs to pretend that there isn’t any money so he can cut any services that are still left in the public domain after the fire sale of the last few years.

The Tory plan was always to increase private debt. Of course it was – if you cut public spending for people on the breadline, then they go into debt. Why do you think Wonga.com’s owner Dawn Capital is such a prolific contributor to Tory Party funds, with £537,000 in known donations this time last year?

The rich are shielded from debt problems in the same way they are shielded from taxation, thanks to the way our tax laws have been rewritten in their favour – all their money is safely tucked away in tax havens and can’t be touched.

On average, each adult in the UK owes £28,489. Some owe much more than that, though. Yr obdt srvt doesn’t owe a bean to anyone, despite being very poor, so that’s already £28,489 to be spread among everyone else. Mrs Mike isn’t in debt either.

The BBC report cautiously suggests that the record debt level “might increase concerns that the UK’s economic recovery [you know, the one they keep talking about on the news and in Parliament as if it actually exists] is based on increased borrowing, rather than growth sustained by rising incomes” – which of course is correct.

According to The Money Charity, total net lending by UK banks and building societies rose by £1.9 billion in September 2013 – that’s just in one month.

Over the four quarters to Q2 2013, they wrote off £3.67 billion of loans to individuals. In Q2 2013, the daily write-off was £7.61 million.

Based on the latest available data, every day in the UK 285 people are declared insolvent or bankrupt – that’s one every five minutes; 84 properties are repossessed; 1,447 people lost their jobs and eight people became unemployed for more than 12 months; 141 mortgage possession claims are issued and 113 mortgage possession orders are made; and 431 landlord possession claims are issued and 319 landlord possession orders are made.

The benefit system helps nobody. It has been redesigned specifically to push people further into debt – the cap on benefit rate increases to one per cent per year means people are two per cent worse-off for every year it continues, while inflation remains at current levels.

It is in this atmosphere that words written in this blog more than a year ago come back to haunt us all: “What do people do for money when the State fails them and they can’t get work? They fall into the debt trap.

“High-interest, doorstep lending to poor people is Britain’s latest – perhaps only – boom industry. In other words, the government’s sick benefits regime is forcing the poor into debt to organisations that will take away everything they have left, in order to make up payments on a loan whose interest rate they probably made up on the spot.

“And when they’ve taken everything, what do you do then?

“Do you really want your kids to starve?”

Jobseekers and the self-employment trap

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benefit, bounty, budget, business, commission, Conservative, Democrat, Department, DWP, election, esther mcvey, firm, fund, general, insolvent, jobseeker, Jobseeker's Allowance, Labour, Lib Dem, Liberal, loan, Mike Sivier, mikesivier, Pensions, self employ, social security, tax relief, Tories, Tory, Vox Political, welfare, work

Yesterday’s outburst against Esther McVey and her innovative way of interpreting the benefit claimant statistics proved very popular as readers clamoured to suggest alternative reasons why people who deserve benefits are no longer getting them.

One of these deserves an article of its own, because it really is ‘The One That Got Away’ – and doesn’t deserve to. As the commenter who raised it pointed out, it could be a huge scandal.

We refer, of course, to the fact that people on Jobseekers’ Allowance are being, let’s call it, ‘persuaded’ to go self-employed and start new businesses.

How are these businesses funded? Do these people get a share of a different DWP budget? Do they get loans? Do they get tax relief to support them while they are setting up these firms?

Meanwhile, some believe the DWP officers who force jobseekers to go self-employed get a commission for doing so – an extra payment on top of their salaries. Or is it a bounty, for taking one more name off the books?

Can anyone shed light on this? Do they get paid for creating, in effect, fake jobs?

Some of these new firms will succeed. Current statistics mean around 10-20 per cent of new small businesses last more than three years. But this means at least 80 per cent will go under.

Our commenter who mentioned the issue raised fears that funding will be withdrawn, right around the time of the 2015 general election.

Wouldn’t that be shocking – if Labour took office only to be faced with headlines that the new government was sending businesses to the wall and unemployment through the roof in its first year of government?

My commenter wondered if this was “another Tory elephant-trap for Labour”. Good question.

If so, it will be time to remind everyone that, since the Coalition came into office, 52,701 firms have been declared insolvent and 379,968 individuals.

Even with ‘help’ from the Coalition, it would take a lot of effort for Labour to equal that dismal record.

Boris please note: We don’t need violence to demonstrate against Thatcherism

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It seems police confiscated an effigy of the Blue Baroness after protesters set fire to it in Glasgow. It is doubtful that the scene looked anything like the above image. Without an effigy to burn, the protesters did NOT become violent. No – they did a conga, while chanting, “Maggie Maggie Maggie, dead dead dead”.

Why on earth does Boris Johnson think it’s necessary to put the fear of violence into our heads, just because people are coming to London to demonstrate in favour of common sense?

The London Mayor said hundreds of Metropolitan police officers would be “kitted up” and ready to be deployed rapidly, in case of outbreaks of disorder.

The trouble with that, of course, is that he has made everybody involved – protesters and police – paranoid that unpleasantness of some kind will happen, and that it will be the other side that starts it!

How utterly ridiculous. By all means, keep your political tools (the police) ready, Boris, but keep them in the background. Otherwise, you’re the one inciting trouble.

If only he was able to step back and look at the situation dispassionately. Consider what the protests are about:

The main event is a demonstration against the current lionisation of Margaret Thatcher that has already cost the taxpayer nearly £2 million in expenses payments for MPs who were recalled to Parliament during their Easter recess for no good reason, when tributes could have been paid to the Blue Baroness upon MPs’ scheduled return, on Monday. Add to that a further £10 million for a state-funded funeral with military honours that a huge proportion of the population believes is undeserved – especially when the late champion of privatisation had more than enough cash in her estate to pay for as much pomp and ceremony as she could ever have wanted – and anyone can see there is a valid justification for the event.

Attendees will include former miners, and members of mining communities that were devastated by the Thatcher government’s decision to force a confrontation with the unions – the real reason the pits were closed in the mid-1980s. They will be joined by travellers – whose kind were attacked by police, in their role as a political tool of the Thatcher government rather than as guardians of lawful behaviour, most notably in the ‘Battle of the Beanfield’. Students whose grants were transformed into loans during her period of office will also be represented, along with those who are politically opposed to her policies and their legacy.

History tells us that violence involving those groups has always been instigated by those arrayed against them – the forces of the government; remember, the BBC was forced into a (grudging) apology after it was proved that footage of a police charge had been doctored to make it seem the miners had attacked first, when in fact the police provoked the unpleasantness.

So let’s hope that nothing of the kind happens today – either at the main event, the UKUncut demo against the Bedroom Tax and benefit cap, or the Taxpayers Against Poverty march.

But if it does, let’s all take a good hard look at whoever kicks it off – particularly their voting history. I have a sneaking suspicion that anyone causing trouble today will have a prediliction for supporting the Conservative Party.

Budget 2013: Tory doublespeak to fool the masses

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“Blah blah blah Budget blah blah blah bad news blah blah blah: The only reason for listening to this man’s budget blather is to work out which parts are Tory doublespeak – “You think we’re helping you – in fact we’re helping ourselves”.

Growth down, employment down.

Deficit up, meaning borrowing up by £245 billion more than initially planned.

£2.5 billion of spending on – paid for by a fresh public spending squeeze, with details of the new cuts announced in a June government spending review.

Spare homes subsidy for rich people wanting second houses?

This is what the Budget tells us.

It’s par for the course that a Conservative announcement which – on the face of it – is good news, turns out to have a hidden double-meaning that will benefit friends of the party.

We can safely conclude that any benefits for first-time buyers are incidental, then.

And the fear of creating another housing bubble is real.

Perhaps this shows the Conservative-led coalition reaching the point of desperation but it is doubtful.

It seems a desperate move to go back to something that could create similar conditions to those that helped cause the financial crisis of 2008 and plunge us into the longest depression for more than 70 years.

But Gideon George Osborne has said the help-to-buy scheme will underwrite £130 billion in loans over three years, aimed at those who want to get on the housing ladder or move to a larger home.

We can only hope that credit checks on these individuals are more stringent than they were on people taking out loans for housing before 2008.

But this gives rise to the claim that the scheme is a second-home subsidy for the very rich – perhaps only the very rich will be able to meet the standards required.

The stated aim of the policy is to reinvigorate the housing market, which has been hit by banks demanding bigger deposits from homebuyers. This may be accurate, but we see nothing in it to stop the very rich taking advantage.

Osborne told the BBC’s Today programme the move would not inflate prices because the Bank of England would be able “to turn off the tap” on the finance after three years if the market was over-heating.

Would this not cause problems for first-time buyers who rely on the loans he is offering?

If so, then this is a scheme to suck money out of people who are slightly more wealthy than the non-waged or low-waged who have suffered the greatest hits so far, but are still not “us”, as the Tories might define that word.

Note that Ed Balls challenged Osborne to confirm funding would be limited to first-time buyers and owner-occupiers and to pledge that second homes and buy-to-let properties would be excluded – but Osborne did not.

Balls also suggested high-earners set to benefit from the cut in the 50p top rate of tax next month could potentially use the “taxpayer guarantee” to buy another property, and contrasted the plan with reductions in housing benefit for those with spare rooms in social housing – “spare room subsidies”, according to the government.

“It now seems his mortgage scheme will help people no matter how high their income to buy a subsidised second home worth up to £600,000,” Balls said.

“From what I can see, the government is basically saying if you have got a spare room in a social home, you will pay the bedroom tax but if you want a spare home and you can afford it, we will help you buy one.”

He added: “That is not just tax cuts for millionaires, it is – dare I say it – a spare homes subsidy.”

Why working people should fear the Coalition’s social insecurity

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It’s absolutely astonishing, the amount of willingness people have to be tricked by Tory doubletalk.

For example: “We love the National Health Service,” said David Cameron. Then Andrew Lansley turned it into something that was neither national nor healthy.

Now Iain Duncan Smith is busy turning our social security system into something that is extremely insecure and downright antisocial!

In the name of fairness.

He and his cronies keep repeating their mantra that benefits have increased by almost twice as much as average wages, even though it has already been proven to be total nonsense.

Well, I’ve got a few more statistics for you – covering the expected effects of the Coalition’s (let’s not forget the Liberal Democrat part in all this) benefits tinkering.

Thanks to this government, working families will lose £9 billion of support every year, according to Liam Byrne. But he said the welfare bill – barring tax credits – will not rise by the one per cent of the benefit uprating, but by four per cent – £8 billion – because the government is failing to create jobs. (Why not? We’ll come to that later)

More working people are in poverty than ever before, with the figure currently standing at a record 6.1 million, according to Karen Buck. She said, according to the House of Commons Library, if only out-of-work benefits were subject to the one per cent cap, but in-work benefits were uprated as normal, 80 per cent of the proposed savings would disappear.

Add changes to the personal tax allowance (increasing to £9,440 this year) to the effects of the Benefits Uprating Bill and working people take 60 per cent of the hit – in other words three-fifths of the drop in income will affect people in work, but they will be expected to take FOUR-fifths of the financial squeeze.

So now even the government’s flimsy claim to be standing up for working people is revealed as a tatty lie.

In each Conservative-held constituency, an average of 6,000 families will be worse-off, Mr Byrne said. Nationally, if the Bill is passed, of the 14.1 million working-age households with someone in work, seven million will be hit – alongside 2.5 million jobless households – so the Benefits Uprating Bill will reduce the capacity of 9.5 million of the UK’s 23-24 million households to pay their bills (Karen Buck).

According to Ian Mearns, 4.4 million jobs pay less than £7 an hour.

As a result of the Bill, five million people may resort to payday loans in order to balance the books for the end of the month, according to Chris Bryant.

He said a food bank is opening every three days and working people are using them to feed their children.

You see, the Government cannot make serious money out of an assault on out-of-work benefits alone – just three per cent of all welfare spending goes on Jobseeker’s Allowance, and all out-of-work benefits account for only three per cent of GDP between them (figures courtesy of Karen Buck)

And the reality is that the line between working people and the jobless is blurred, with people changing between being in and out of work all the time. Last year there were between 244,000 and 357,000 new claims every month for Jobseeker’s Allowance, while between 242,000 and 370,000 left benefit every month (Karen Buck).

Let’s look at the figures affecting both workers and the jobless. According to Liam Byrne, the Benefits Uprating Bill means a child benefit rise of 20p per week; maternity allowance would go up by £1.37 and Jobseekers’ Allowance by just 72p.

Getting back to those 2.5 million jobless – they will lose about £215 a year by 2016, said Karen Buck. Ian Mearns added that, according to the Child Poverty Action Group, a working family eligible for both housing and council tax benefit will gain only 13p a week extra as a result of the extended personal tax allowances.

Meanwhile, a millionaire’s income will rise by £2,058 per week as a result of the cut in the top rate of tax from 50 per cent to 45 per cent, according to Liam Byrne.

With less money to spend, more shops will close and more people will lose jobs (Chris Bryant). this is because money in the pockets of people at the bottom end of the income spectrum is far more likely to be spent, and therefore to keep the economy moving (Sarah Teather, one of the few Liberal Democrats who rebelled against the Bill).

The government would have you believe that the losses I have described above, and the poverty they will bring, could be avoided if scroungers stopped stealing money from the system through fraud, and got back to work.

But benefit fraud stands at 0.7 per cent, according to official figures, and the total number of available jobs (according to the Office of National Statistics) is 489,000.

And – for the third time in this article – there are around 2.5 million people out of work.

There aren’t enough jobs to go around.

So why do you think the government wants to make it impossible for those who are out of work to make ends meet?

It all comes down to something identified by Skwalker1964 in his excellent blog: Greed.

This is about employers wanting to make sure they don’t have to pay too much of their profits away to their workforce – the people who actually make things and do things to generate the money – bear in mind that employers’ pay has risen to eight and a half times what it was 30 years ago, while workers’ pay has increased by an average of just 27 per cent.

Employers want to make sure workers stay in a weak position when bargaining for more pay. If there were more jobs available, or the number of long-term jobless was high, their position becomes stronger as they would realise they could not be replaced very easily.

Lots of people unemployed over the short term means more insecurity for those in work, so they’ll tolerate lower wages and won’t demand increases. The long-term unemployed are less of a threat to job tenure as they are more likely to remain out of work than take a working person’s job.

That’s how the ‘fat cats’ think. And they, of course, pay huge donations to a certain political party, currently in power, to ensure that they get their way.

Do you think I’m wrong?

Then tell me – by how much has the income of the UK’s top earners increased, in total, since May 2010?

Suicide rate is now the strongest indicator of unemployment

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Iain Duncan Smith has been crowing about the private sector after the official unemployment figure dropped from 8.2 to 8 per cent of the workforce.

He reckons we should take our hats off to private sector employers for providing the new work. Well he would, wouldn’t he?

His attitude conforms with the narrative the Tories have been trying to build since 2010, that the private sector would rush in to fill the jobs gap left behind after the Coalition cut the public sector to ribbons – providing decent, gainful employment for the masses.

That story went straight into the circular file when the economy flatlined, right after George Osborne took charge – and resurrecting it now seems a desperate act, especially in the light of the facts.

Firstly, the Olympics have distorted the figures. We don’t know how many employers took on extra hands in advance of the games, so we don’t know how many of those jobs will go again, now that the major event is over. We do know that businesses suffered losses during the games because an expected influx of consumers did not materialise; how will that affect future figures?

Second, the number of people working part-time because they cannot find a full-time job hit a record high of 1.42 million – the most since records began in 1992.

Third, the unemployment rate actually rose in around half of the British regions. This supports the claim that the Olympics distorted the figures, and points to a continuing downward trend.

Finally, if Mr Smith wants a more accurate monitor of unemployment, he should look at the suicide rate – according to a new report by the British Medical Journal.

It found that the suicide rate among men rose by 1.4 per cent for every 10 per cent increase in unemployment.   This means that between 2008-2010, 846 more men ended their life than would normally have been expected; the corresponding number for women was an extra 155 suicides.   On average, male unemployment rose by 25.6 per cent in each of those years, while the male suicide rate rose by 3.6 per cent each year. When male employment rates rose briefly in 2010, the suicide rate dropped slightly.

We already know that an average of 32 people per week are dying as a result of Mr Smith’s brutalities against the disabled; now we know that more than 1,000 have been driven to kill themselves because of the government’s unemployment policy.

Meanwhile, among those who do have jobs, we know that average wages now only last 21 days in the month, meaning that workers have to dip into their savings, ask family for funds, or go to loan sharks for help – increasing the national debt problem and creating a trend that could lead to even more suicides.

I notice Iain Duncan Smith, promoter of the private sector, hasn’t got anything to say about that.