Why can’t Labour support working people AND be pro-business?

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Blairite, business, capitalism, co-operative, Ed Miliband, employee owner, EU, european union, John Lewis, Labour, living wage, Lord, Mandelson, Michael Meacher, Mike Sivier, mikesivier, militant tendency, minimum wage, Myners, Neil Kinnock, people, Peter, politics, predatory, pro, referendum, Vox Political, work

Know your enemy: If you want to know why Labour was so soft on business between 1997 and 2010, here’s your answer – Peter (now Lord) Mandelson was in charge of Trade, Industry, and Business at various times throughout those Parliaments.

Michael Meacher has missed a trick in his recent blog article about Lords Myners and Mandelson – who say they want Labour to be pro-business.

He correctly identifies these two peers – one of whom (Mandelson) is a Blairite Labour Party member and therefore might as well be a Tory, while the other (Myners) is not aligned to a political party and therefore might as well be a Tory – as being very rich and refers to them sarcastically as “those stalwart supporters of working people”, meaning the exact opposite.

He correctly states that they are wrong to claim that Ed Miliband’s attack on “predatory capitalism” is harmful to Labour’s election prospects, pointing to poll results showing that the next election winner needs to be tough on big business.

And he correctly – yes, Ukippers, correctly – points out that businesspeople know an in-out referendum on membership of the European Union could cause huge harm to their firms if the vote goes in favour of leaving.

These are all good points, but Mr Meacher could have gone much further.

Labour should be pushing its policies as better for business than anything the Conservatives have to offer – because they are.

The party wants more firms and public sector organisations to pay the living wage. As this blog has stated time and time again, this can only help British industry as it would show employees that their contribution is valued, encouraging them to improve the quality of their work and build up their employer’s profitability and prospects of expansion.

That’s not all that Labour can do. The party should be much bolder in its aims. For example:

The party should be promoting employee-ownership to more and more firms – the advantages of becoming co-operatives. Look at the success of John Lewis, whose employees receive a bonus equal to around four months’ extra pay – every year – because of the way that company is set up. John Lewis is going from strength to strength and so is its workforce. There is no valid argument against it.

Yes, there are some within the Labour Party who continue to push timid concepts about “strengthening” the minimum wage, but like Lords Myners and Mandelson, they might as well be Tories and it is time they were purged from the party. Neil Kinnock got rid of the Militant Tendency left-wingers; why shouldn’t Ed Miliband similarly divest himself of the right-wing fifth-columnist parasites who have held Labour back for his entire term as leader (including, of course, his idiot advisors)?

The Conservative Party’s idea of helping business has failed completely. It could never have done otherwise; starving the economy of money during a downturn makes it next-to-impossible for any but the largest firms to turn a profit.

Labour must present a vibrant alternative.

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The reality of the Coalition’s crackdown on tax credits

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agencies, agency, austerity, collection, debt, disability, disabled, earn, employer, hospital transport, low, minimum wage, national, NHS, pay, pension, poor, sick, tax credits, Tony Blair, working, zero hours

Nothing more to say: This Tax Credits advert was intended to warn people to keep up-to-date with information they send HMRC about their claim; now it seems the message is much simpler – they want to stop paying you anyway.

A guest blog by ‘Mimismum’.

What follows was posted to Vox Political as a response to Tax Credits and Debt Collection Agencies: Peachy’s Comment. It details the facts of the situation for just one struggling family and as such was worth a larger audience than it would have received as a comment on another article.

This government scares the s**t out me. I don’t know how much more stress I can take now. It has gone beyond anything like “austerity” or “in it together” rhetoric and is now a witch hunt against the poor or low earners, sick and disabled – even going as far as blaming us for our own predicament.

We have seen our family income go from £800 from my other half’s wage back in 2009 to just under £350 now, due to successive redundacies. He works and has never had any unemployment in the past 12 years, and yet each time he calls tax credits to say there is a change in our income they lower the award (ha! thats a rich term for it now, its garbage to call it an award) based on his predicted income, even though its gone down and down.

Last year he worked overtime for two weeks, got paid an extra £20 in the month and they hammered us by cutting his Working Tax Credits by £30 a week for the entire year! He recently got made redundant again and is now working two temp jobs (one of which is zero hours) and he has got hours bouncing around all over the joint. Family life has been shot to s**t, and when he rang Tax Credits to tell them they just said, “Oh well, as long as it’s over the 24 a week you are okay.”

Today they shoved some money in the bank. He rang to ask what the hell it was for; they can’t tell him because “We haven’t had the renewal paperwork in.” For goodness’ sake, we just wanted to know what this extra money is, it’s not rocket science! The guy refused to tell us!

My other half had to use it to pay bills because his wages were short due to the zero hour contract job changing how they pay wages now – because of that stupid pension scheme c**p the government forced on everyone. Even though he already has one from his previous job, this company took money for their pension and said they wouldnt pay into his! Oh, and because his old employer forgot to send his P45, he had to pay emergency tax as well!

We can’t do this any more. The stress of him working two jobs, my disability, and having children is driving a wedge between us. One of our children has autism, and I am struggling to maintain a routine that they desperately need – and I can’t. The other half is now on National Minimum Wage for both crappy jobs; both want exclusivity out of him and now keep rostering him on during the other job’s time. Both knew he had a second job when they took him on, and now we find out that tax credits can send debt collectors and bailiffs around for money they say anyone owes, just like that.

I wish to god Tony Blair had not invented tax credits, because it gives employers a get-out clause for paying decent wages. I can’t get hospital transport fees out of the NHS for trips I have had to make and even though they were claimed within the time allowed – no payment has been forthcoming because “it’s too late now” for them to pay out. I have another appointment in two weeks’ time which I have to cancel as I cant get there, because my other half can’t take time off work from either job – and my physio is about to strike me off for the same reason.

I am sick of this mess; we dont deserve this, and if we find out Tax Credits have overpaid us as well I don’t know what we would do. We have an income of less than average and we pay our own rent; we don’t claim Housing Benefit because the council stuffs it up and we get into arrears so we manage on our own.

We claim less of what we are entitled to because I am scared they will want it back, and now they are playing this game with tax credits.

I don’t want to be punished any more for being disabled, a parent or married. I have had enough of being poor and scared. All I want is for my other half to have a decent job with a decent wage, and there is nothing out there now.

No jobs, nothing, and it’s getting worse.

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Why is it fair for taxpayers to subsidise businesses but not the disabled?

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business, Conservative, depress, disability, disabled, economy, employment, George Osborne, in-work, Labour, living wage, low-paid, Mike Sivier, mikesivier, minimum wage, pay, people, politics, salary, social security, subsidise, Sunday Times rich list, taxpayer, Tories, Tory, Treasury, UKIP, unemployed, Vox Political, wage, welfare

Swivel-eyed loon: This is the kind of many who thinks subsidising businesses to be lazy, while refusing to support disabled students (no matter how intelligent they are) is a clever idea. [Picture: Left Foot Forward]

George Osborne was today set to attack both the Labour Party and UKIP as being bad for business. Isn’t that a bit rich, coming from a man whose party uses taxpayers’ money to subsidise private firms?

Across the UK, firms of all sizes – ranging from huge multinationals right down to the smallest traders – take advantage of the taxpayer-funded benefit system that supports people who earn less than the Living Wage (the minimum amount necessary for a working person to be able to pay their own way).

Osborne would have you believe this is good for Britain; more firms are employing more people – and that’s got to be good, right?

Wrong. More people may be employed, but on increasingly less money, meaning the burden on the taxpayer is increasing all the time.

But the taxpayer has increasingly less money to give to the Treasury, meaning that – instead of saving the economy – Osborne has put us into a vicious spiral of diminishing returns.

That’s what you get when you ask a towel-folder to do a real job!

It would be far better to demand that businesses pay the Living Wage. It isn’t an impossible dream – only a few decades ago, it was possible for one parent to earn enough to house and feed an entire family. Why doesn’t this happen anymore?

There is, in fact, no reason for it to have stopped.

The only conclusion we can reach is that the Tory government is using the system to leach money into the pockets of wealthy businesspeople. By pushing benefit payments so low that the unemployed and low-paid struggle to support themselves, they have made it possible for employers to pay less and pocket more.

That is why the names on the Sunday Times Roll Call of Shame (otherwise known as the Rich List) are so much richer this year than they were before the Tories weren’t elected.

The answer is simple: Compel businesses to pay the Living Wage.

Oh, but you think that will be bad for business too, do you?

Mr Osborne would tell you so, would he?

How odd – because this would be no different from a policy his government has been happily forcing on benefit claimants since 2010.

You see, as stated above, the policy has been to make living on benefits extremely difficult in order to force people to seek employment. This in turn allows firms to depress wages because they can tell the workforce there are plenty of other people waiting to take their places.

Only today, on this blog, we were discussing Tory David Willetts’ plan to cut Disabled Student Allowance. He wants us to believe that this will get students with disabilities to work harder, rather than expecting the taxpayer to lay everything at their feet; in fact, he is taking away their lifeline and leaving them to starve.

But the argument works just as well with employers. Any government with the guts to tell them that the crutch of in-work benefits is being removed and they will have to pay the difference is sending out the same message to employers as they did to benefit claimants: You’ve had it easy for too long. Now it’s time for you to earn your keep.

Some firms will go under. Unlike the disabled people being victimised by David Willetts (et al), we should shed no tears for them; they weren’t helping the economy.

More will pay up – finding new markets to fund the extra expenditure. These are the businesses that will build the real economic recovery.

Labour is one of only a few political organisations that support the Living Wage, and therefore the only mass-appeal political party that would have a genuinely beneficial effect on the economy.

Oh, but I forgot.

You were listening to George Osborne.

And he says Labour is bad for business.

But then – he’s no economist.

He’s a towel-folder.

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Employers should never be allowed to dictate the minimum wage

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average, BBC, British, CBI, confederation, earning, Ed Miliband, employ, government, industry, Katja Hall, Labour, Low Pay Commission, Mike Sivier, mikesivier, minimum wage, politician, Radio 4, salary, Today, Vox Political, wage, work

Here’s an interesting development: Ed Miliband announced today that a Labour government would link the minimum wage to average earnings, after the Low Pay Commission proved itself woefully inadequate for the job.

Employers’ organisation the Confederation of British Industry (CBI) immediately leapt up to scream that politicians should not set wages, completely missing the point that, under Miliband’s plan, politicians wouldn’t.

CBI chief policy director Katja Hall gave verbal evidence of her inability to understand a simple issue when she told Radio 4’s Today programme: “The system we have at the moment has been really successful and that system involves the setting of the minimum wage by an independent Low Pay Commission… They have done a really good job and we think it’s much better the job is left to them rather than given to politicians.”

… Really?

The Miliband plan would not give the job to politicians. It would make the minimum wage a percentage of the average wage.

Mr Miliband said it was a “basic right” that hard work should be rewarded with fair pay.

He also took time to talk to Today, saying: “This gets at what is a terrible scandal in this country… that we still have five million people in paid work, unable to make ends meet.”

Perhaps the reason the CBI doesn’t like this idea is the fact that the average wage includes its own members’ massively over-inflated salaries. Under the proposed scheme, every increase in their own paycheques would require a similar raise for the lowest-paid workers in the country.

There is no reasonable argument against that, but it is what they are arguing against, nonetheless.

Perhaps politicians’ next target should be the CBI itself.

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Cameron’s comedy turn won’t make anybody happy

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David Cameron should be very happy that UKIP is around to make him look acceptable.

We can’t ever say he’ll look good, but in contrast to the ‘Farage wave’, the spectacle of UKIP being thrown out of the venue where it was supposed to be launching its European election campaign, and the never-ending queue of candidates who are desperate to embarrass themselves publicly – what’s the latest one? “Women should be made to wear skirts because they’re a turn-on for men”? Ye gods… – it’s easy to think that the Conservatives are mild, or at least rational.

They’re not.

But Cameron was keen to project an image of competence at the Conservatives’ campaign launch for the local council elections. This is strange because, with his record of achievement, the things he was saying seem more like stand-up comedy than serious statements of ability.

Try this, about the European Union: “I have a track record of delivery – and believe me, whatever it takes, I will deliver this in-out referendum.” A track record of delivery? Well, yes. He delivered a top-down reorganisation of the NHS that nobody wanted, leading to an inrush of private health companies into the NHS – that nobody wanted. He has delivered the lowest amount of house-building, per year, since records began. He has delivered a withered economic ‘recovery’ that arrived three years later than if he had continued with the plan of the previous, Labour, government. He has delivered all the benefits of that ‘recovery’ to the extremely rich, rather than sharing it equally with the people responsible for it. And he has delivered a new high in employment, with no economic benefit to the country, that has left workers on wages that are so low they are going into debt.

He delivered the bedroom tax.

He delivered a massive increase in the National Debt.

He delivered millions of people into poverty and food bank dependence.

Ha ha ha. Very funny, Mr Cameron.

He told us, “People said I would never veto a European treaty. In 2011 that’s exactly what I did.” Well, yes. But the rest of Europe just went right ahead and carried on without you. You marginalised Britain as a member of the EU and made us a laughing-stock in the eyes of the world.

Ha ha ha. Very funny, Mr Cameron.

“We came through the great recession together; we are building the great British revival together,” he said. But he can’t say that to the many thousands of people who used to be claiming sickness and disability benefits but aren’t anymore because they are all dead. They didn’t come through the great recession. Cameron cut off their means of survival, forcing them into situations in which their health was allowed to worsen until their conditions overwhelmed them, or their situation induced such huge bouts of depression that they took their own lives.

Ha h- no. That’s not funny, Mr Cameron.

“The job is not done. If you want to finish the job we have started, back the party with a plan,” he said. Well, no. The Conservative plan (such as it is) will destroy your employment rights, scrap the welfare state, maintain a huge underclass of unemployed people to use as fodder for work-for-your-benefit schemes (a contradiction in terms if ever there was one) to circumvent the minimum wage, and to claim credit for successes that aren’t theirs.

There is only one reason to support the Conservative Party in this – or any other election.

That is if there is only one other political party on the ballot paper – and that party is UKIP.

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Iain Duncan Smith’s new plan to prolong child poverty

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addiction, afford, allowance, benefit, bill, breakdown, child, childcare, Chris Goulden, Coalition, Conservative, consultation, credit, cut, debt, Democrat, Department, draft, DWP, education, employed, employment, families, family, fuel, government, housing, Iain Duncan Smith, IDS, income, inflation, job, jobless, joseph rowntree foundation, JRF, lending, Lib Dem, Liberal, low income, Low Pay Commission, Mike Sivier, mikesivier, minimum wage, part-time, payday, Pensions, people, personal, place, plan, politics, poverty, proposal, pupil premium, sanction, school meal, social security, strategy, tax, teacher, Tories, Tory, unemployed, unemployment, union, Universal Credit, uprating, Vox Political, water, welfare, work, working, workless

Iain Duncan Smith wants to talk about child poverty – but how can we take him seriously when he starts the discussion with a lie?

“Recent analysis reveals that children are three times as likely to be in poverty in a workless family and there are now fewer children living in workless households than at any time since records began, having fallen by 274,000 since 2010,” according to the Department for Work and Pensions’ press release on the new consultation.

Oh really?

According to the Joseph Rowntree Foundation (JRF), child poverty will rise from 2.5 million to 3.2 million during the 2010-2015 Parliament – around 24 per cent of all the children in the UK. By 2020, if the rise is not stopped, it will increase to four million – around 30 per centof all children in the UK.

Under the Coalition government, the number of people in working families who are living in poverty – at 6.7 million – has exceeded the number in workless and retired families who are in poverty – 6.3 million – for the first time.

The Joseph Rowntree Foundation has measured poverty, using several indicators, for more than 15 years; its figures are far more likely to be accurate than those of the government, which is still defining poverty as an income of less than 60 per cent of median (average) earnings. Average earnings are falling, so fewer people are defined as being in poverty – but that doesn’t make the money in their pockets go any further.

“The previous government’s target to halve child poverty by 2010 was not achieved,” states the DWP press release. Then it comes out with more nonsense: “The government is committed to ending child poverty in the UK by 2020 and the draft child poverty strategy sets out the government’s commitment to tackle poverty at its source.” From the JRF figures alone, we know that government policy is worsening the situation – or has everyone forgotten that 80,000 children woke up homeless last Christmas morning?

Let’s look at the government’s plans.

The DWP claims “reforming the welfare system through Universal Credit… will lift up to 300,000 children out of poverty, and cover 70 per cent of childcare costs for every hour worked”. But we know that Universal Credit is effectively a benefit cut for everyone put onto it; they won’t get as much as they do on the current benefits, and the one per cent uprating limit means falling further into poverty every year. Also, we found out this week that the housing element will be subject to sanctions if people in part-time jobs cannot persuade their employers to give them more hours of work. The claim is ridiculous.

The DWP claims the government will will increase investment in the Pupil Premium, provide free school meals for all infant school children from September this year, improve teacher quality, fund 15 hours of free early education places per week for all three- and four-year-old children and extend 15 hours of free education and care per week to two-year-olds from low income families. None of these measures will do anything to “tackle poverty at its source”. Tackling poverty at its source means ending the causes of poverty, not putting crude metaphorical sticking-plasters over the effects – which could be removed at any time in the future.

The DWP claims the government will cut tax for 25 million people by increasing the personal tax allowance, and cut income tax for those on the minimum wage by almost two-thirds. This means people will have more money in their pocket – but will it be enough, when benefit cuts and sanctions are taken into account? Will their pay increase with the rate of inflation? There is no guarantee that it will. And this move means the government will collect less tax, limiting its ability to provide services such as poverty-reduction measures.

The DWP claims the government will reduce water and fuel costs, and attack housing costs by building more homes. The first two measures may be seen as responses to aggressive policy-making by the Labour Party, and the last will only improve matters if the new dwellings are provided as social housing. Much of the extra spending commitment is made for 2015 onwards, when the Conservative-led Coalition may not even be in office.

These are plans to prolong poverty, not end it.

It is notable that the DWP press release repeats many of the proposals in an attempt to pretend it is doing more. Take a look at the list and count for yourself the number of times it mentions fuel/energy bills (three times) and free school meals (twice).

In fact, the only measures that are likely to help reduce the causes of poverty are far down the list: Increasing access to affordable credit by expanding credit unions and cracking down on payday lending (at the very bottom – and we’ll have to see whether this really happens because payday lenders are generous donors to the Conservative party); and reviewing – mark that word, ‘reviewing’ – the national minimum wage, meaning that the government might increase the minimum wage in accordance with Low Pay Commission recommendations.

The DWP press release quotes Iain Duncan Smith, who said the consultation re-states the government’s commitment to tackle poverty at its source, “be it worklessness, family breakdown, educational failure, addiction or debt”.

The measures he has proposed will not improve anybody’s chance of finding a job, nor will they prevent family breakdown, or addiction. The plans for education have yet to be tested and may not work. The plan for debt involves annoying Conservative Party donors.

The JRF has responded to the consultation diplomatically, but there can be no mistaking the impatience behind the words of Chris Goulden, head of poverty research. He said: “Given that it has been over a year since the initial consultation on child poverty measures, we are disappointed that the government is now going to take even longer to agree what those indicators will be.

“With one in four families expected to be in poverty by 2020, a renewed strategy to address child poverty is vital. Any effective strategy should be based on evidence and contain measures to reduce the cost of living and improve family incomes. However, until those measures are agreed, it is difficult to see how the government can move forward.”

Don’t be too concerned about moving forward, Chris.

This government is backsliding.

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Coalition to impose sanctions on housing benefit

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allowance, benefit, benefit cap, betray, Department, DWP, employ, employment, ESA, fair, full-time, hardworking, housing benefit, Inside Housing, job, Jobseeker's Allowance, JSA, landlord, minimum wage, part-time, Pensions, rule, sanction, support, tenant, Universal Credit, uprating, work

Part-time workers who are judged to be doing too little to find full-time work could have their Housing Benefit sanctioned by the government when Universal Credit comes into full force, according to Inside Housing.

The revelation is the latest in a long line of benefit betrayals to be inflicted on the poor by the Coalition government. The new development also means landlords stand to lose out.

The Department for Work and Pensions has confirmed to Inside Housing that under Universal Credit, where a tenant is working less than 35 hours per week at minimum wage and is not eligible for JSA or ESA, then the housing element can be sanctioned instead.

It seems clear that the government is determined that it should be able to take income away from everyone who is not being properly paid by their employer. Does this seem fair to you?

Under the present system, Housing Benefit is paid direct to landlords, meaning sanctions against tenants can only be applied to out-of-work benefits like Jobseekers’ Allowance or Employment and Support Allowance. The aim is to use Universal Credit to spread the threat of sanctions so that it covers people in low-paid work as well. Would you consider any government that did this to be standing up “for hardworking people”?

The article quotes a DWP spokesperson who said: “It is only right that people claiming benefits should be aware that not sticking to the rules can have a consequence.”

This, of course, assumes that a person is breaking the rules if their employer refuses to improve their working conditions… but we know that the government has altered working conditions to ensure that employers are under no pressure to do so; the benefit cap, and the one per cent limit on the annual uprating of benefits have ensured that people without jobs will become continually worse-off, so those who are in work cannot demand pay increases for fear of being handed their P45s and told that someone else will do their job for less.

Are these the actions of a government that believes we are “all in it together”?

If anybody thinks they can find justification for this behaviour, please get in touch.

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Conservatives: Exploiting hardworking people

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activities, activity, administration, all in it together, campaign volunteer, Conservative, David Cameron, duties, duty, employee, employment, expenses, exploit, fairness, George Osborne, Graduate Fog, hardworking people, help, hostile question, hours, illegal, intern, memo, Mike Sivier, mikesivier, minimum wage, mutuality of obligation, people, politics, task, Tories, Tory, volunteer, Vox Political, work, worker

Exploitation: The logo on the cups says, “Conservatives – for the privileged few” – and the intern carrying them isn’t included.

“We’re all in it together” are we, George?

The Conservative Party represents “fairness”, “for hardworking people”, does it, David?

It seems not – if we are to judge the Conservative Party by its actions, rather than its words.

Yesterday a website focusing on graduate careers blew the full-time whistle on these deceptions, exposing how the Tories have been briefing MPs and candidates on ways to avoid paying the minimum wage by exploiting the perceived differences between volunteers, interns and paid employees.

The article on Graduate Fog said a memo circulated to Party members was advising them to start calling their unpaid interns ‘campaign volunteers’, in order to evade “potential hostile questioning” about exploitative business practices.

The Conservative Party has denied doing anything wrong by providing advice on ways its members may avoid paying the minimum wage.

It would have been better for the Party spokesperson to deny that Conservatives have been wrongly recruiting people as employees – under the umbrella title of ‘interns’ (which means nothing in UK law), while treating them – for payment purposes – as volunteers.

But that was impossible because it is exactly what has been happening – as the memo makes clear.

Look – here it is:

Graduate Fog kindly published it for us all to examine.

The part that blows the gaff is a “suggested template reply” for “hostile questioning” about the issue of “recruiting unpaid interns”.

Clearly, this is what Conservative chiefs want to avoid.

Clearly they would not have gone to the effort of circulating a memo if NOBODY was “recruiting unpaid interns”.

So there is a clear implication that some Conservative Party MPs and prospective Parliamentary candidates, in fact, have been “recruiting unpaid interns” – and illegally exploiting them by demanding that they carry out the duties of employees.

The tone is clear from the get-go: The Conservative Party is running scared.

Members are told that people working in an unpaid capacity are no longer to be described as ‘interns’ – they are ‘campaign volunteers’ from now on because, that way, there is no obligation to pay them.

Conservatives are advised not to pay anything at all to these ‘volunteers’ – even expenses – as this could lead to them being classed as ‘workers’ and establishing ‘mutuality of obligation’. This would be equivalent to payment for services rendered – and the ‘volunteer’ would therefore be classed as a ‘worker’, requiring payment for services rendered, at the minimum wage or higher.

From now on, the memo states, recruitment adverts should be “appropriately worded” – meaning there must be nothing resembling a “formal job description”. This means references to “work”, “worker”, “hours” of work, “tasks” the ‘Volunteer’ will be “expected” to perform, and “expenses” are all out.

Instead, Party members are advised to use words like “volunteering”, “volunteer”, “campaigning administration”, and “help” – and to describe functions carried out by the “volunteer” as “the kind of activities it would be great to get some help with”.

This advice would not be necessary if Conservative Party MPs and prospective Parliamentary candidates had not been illegally “recruiting unpaid interns”.

For the interns themselves, this should be terrific news: There can be no requirement for them to turn up to work, and no disciplinary measures may be taken against them if they don’t. They may come and go as they please and do not have to conform to any set working hours. Nor may they be expected to perform any specified duties.

If the Tories want people to do that kind of work, they can pay for it like everybody else.

… although the minimum wage probably won’t be enough.

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‘Scrap maternity pay’ – how Tories see the future of ‘welfare’ reform

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appeal, benefit, benefits, bureaucracy, Charlie Elphicke, Coalition, collection, Conservative, cut, debate, Democrat, Department for Work and Pensions, DWP, employer, employment, government, in-work, infrastructure, insurance, levy, Lib Dem, Liberal, living wage, maternity, Mike Sivier, mikesivier, minimum wage, national insurance, people, politics, Reform, rules, self-employed, social security, tax, tax base, taxpayer, Tories, Tory, Vox Political, welfare, Westminster Hall, work

[Image: The Guardian]

Yesterday (February 11) we had a chance to see what the Tories – or at least some of them – want to do to state benefits.

Charlie Elphicke, Tory MP for Dover, launched a debate in the Westminster Hall in which he called for the axing of maternity pay – and other in-work benefits – to make way for a new insurance system into which employers and the self-employed would pay, and from which the costs of maternity leave and other benefits would be met. He suggested that participating employers would see a corresponding cut in their National Insurance contributions.

He said he wanted this system to pay out at minimum wage levels, rather than at the current £137 per week maternity rate. The state would back the scheme, but it would be entirely funded by businesses.

The taxpayer would not fund any of this scheme – at least, not the way the visionary Charlie put it during the debate. It would be “paid for by the workplaces of the nation”.

This is how (some) Tories want the system to be: Insurance schemes-a-go-go, with people and businesses standing or falling on their ability to meet the requirements of the system.

Obviously he has not considered the drawbacks of such a scheme. One is very simple: If employers are paying everything towards in-work benefits, why not simply pay the Living Wage, whether a person is working, on maternity, or whatever? The cost would be the same or lower – because there would be no government administrative burden.

Liberal Democrat Work and Pensions minister Steve Webb put some more of them into words.

“As the system currently works… 93 per cent of the cost of statutory maternity pay is refunded to employers. In fact, more than 100 per cent is refunded to small firms,” he said.

“If an employer is reluctant to take on a woman who might have a child, therefore, the pure finances should not make a huge difference.

“I am not therefore sure that having a collectivised… system of insurance is any different substantively for the employer. Either way, employers are getting reimbursed — the costs are being met and are not in essence falling on the employer.”

In other words, there would be no benefit to employers.

He continued: “Whenever we set up a new scheme, we have new infrastructure, bureaucracy and sets of rules. If we had the levy—the at-work scheme that he described — we would have to define the new tax base, have a new levy collection mechanism, work out who was in and who was out, have appeals and all that kind of stuff. There is always a dead weight to such things. Simply setting up new infrastructure costs money. I would have to be convinced that we were getting something back for it.”

In other words, the scheme proposed by the intellectual Mr Elphicke would be more expensive than the current system.

“He then says that he wants the rate not to be some £130 a week, but to be £200 and something a week,” said Mr Webb.

“I was not clear where that extra money would come from. If we pay women on maternity leave double, someone must pay for it. If he does not want that to be an extra burden on firms, paying for it will simply be a tax increase.”

In other words, the scheme might be doubly more expensive.

In addition, he said the proposal created issues around whether it distorted the choice between becoming an employed earner or a self-employed person.

And he pointed out that Mr Elphicke’s proposal was based on a belief that women taking maternity leave would not return to their previous employment – but this is no longer true. Mr Elphicke’s proposal is based on an outdated understanding of the market.

Mr Webb said: “The norm now for an employer who takes on a woman who goes on maternity leave is that — four times out of five — he will come back to the job for which she was trained, in which she is experienced and to which she can contribute.

“We now find that three quarters of women return to work within 12 to 18 months of having their baby… We need to educate employers about the fact that, if they do not employ women of childbearing age, they are depriving themselves of talented people who contribute to the work force. Not employing such women is clearly a bad thing, not only from a social point of view, but from an economic point of view.”

There you have it. Mr Elphicke’s proposal was defeated by a member of his own Coalition government; it was archaic, it was expensive, and it offered no profit for the people who were to pay for it.

That won’t stop him pushing plans like this. You will have noticed that a keystone of his scheme was that businesses would pay for in-work benefits – not the state. Charlie Elphicke is a Tory, and Tories cut taxes for very rich people like themselves. He’ll go on pushing for it in one form or another, for as long as he remains an MP.

Even if it is expensive, harmful nonsense.

Follow me on Twitter: @MidWalesMike

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Victims tell how they were unfairly knocked off sickness benefits

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allowance, bedroom tax, benefit, Centre, CESI, Conservative, contribution-based, David Cameron, debt, Department, disability, disabled, DWP, economic, employment, ESA, fuel, government, housing benefit, Iain Duncan Smith, IDS, Incapacity, Inclusion, income related, Income Support, Jobseeker's Allowance, married, Mike Sivier, mikesivier, minimum wage, national, office, ONS, Pensions, people, politics, poverty, sick, social, social security, statistics, Steven Dix, support, tax credits, Tories, Tory, unemployment, victim, Vox Political, welfare, Wonga, work, working

‘Have 230,000 sick and disabled people been wrongly knocked off-benefit and forgotten?’ That was the question posed on this blog just two days ago, based on an analysis of statistics from the ONS and CESI. Without more input from the Department for Work and Pensions it is impossible to answer the question – but two former claimants have come forward with stories that support the allegation.

“I’m one of them!” wrote Steven Dix on Twitter. “My wife and I are now £400 a month worse off, with IDS’ ‘help’!”

He explained: “When I was on Incapacity Benefit it was indefinitely – then came ESA.”

Mr Dix was put on contribution-based ESA totalling £97 per week – but this only lasts for a year. After that, “I was told that my wife, who is on minimum wage at Asda, earns too much for me to get income-related ESA.

“We were told we could only apply for Working Tax Credits, but guess what? Because I got ESA in the tax year 2013/14 we don’t get anything until tax year 2014/15 when we will have to apply again, and we can’t have anything backdated until then!

“We married on September 3, 2013; we did not qualify for housing benefit between then and December 25, 2013 and so now have £400 rent arrears to make up, and I have to find another £68 for overpayment of housing benefit (the bedroom tax) to pay back for that period too!”

Mr Dix stated that he had been made to feel like a criminal. “My crimes? I’m disabled and got married!

“The government keep on about how they’re helping working taxpayers and how they are helping married couples like my wife and I, but I really am wondering how much worse things would be if we weren’t getting David Cameron’s ‘help’!

“Now of course I have no independant income, I’m unable to work, and only have £168 DLA at the lower rate per month, half of which goes to Wonga.com!”

So this victim clearly deserves sickness benefit because he is unable to work, but has been denied it because of the arbitrary 365-day limit on contribution-based ESA; his low-paid wife can’t claim Working Tax Credits because of a legal loophole and so they have had to take money from a payday loan firm – the one that famously contributes to Conservative Party funds.

How convenient for Wonga.com and the Tories. How devastating for Mr Dix and his wife.

On Facebook, a person going by the moniker Nomine Deus tells us: “I was kicked off-benefit (long term Incapacity) in 2012.

“I am not eligable for Jobseekers [Allowance] or Income Support as my wife works and is paid just over the qualifying amount for one and works too many hours for the other. I live out in the sticks and would be forced to travel to sign on at my own expense and then put onto workfare etc, again at my own expense (or rather my wifes expense). I am forced, therefore, not to sign on at all.

“We are already in fuel poverty and struggling financially. I am still suffering my original condition. I believe there must be many like myself out there.”

These are only two stories of people who have fallen through the holes Iain Duncan Smith has created in what used to be the safety net of social security.

Who can doubt that there are many, many more?

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