Coalition drags out the pain with promise of many more cuts

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The BBC has reported findings by the Institute for Fiscal Studies, showing that the Coalition government will be less than halfway through its planned spending cuts by the end of the current financial year (March 31).

The organisation said 60 per cent of the cuts were still to come.

This raises a few urgent questions. Firstly: This government was formed on the promise that it would balance the books by 2015, which presupposes that its entire plan for doing so would be in place long before then. We know that this ambitious claim was dismissed after years of failure, but part of the reason for this failure was that George Osborne stopped a recovery that was already taking place, and which would have led to economic growth of 20 per cent by now, if it had been allowed to continue (according to Michael Meacher MP). My question, therefore, is: Have the Conservatives been working to ensure that they would have an excuse to make more cuts, rather than to restore the economy and balance the deficit?

Secondly: We may presume that these further cuts will be inflicted over a period of years (as even the Tories know it is important to enact change gradually, rather than inflict sudden shocks on the economy that could create entirely unforeseen consequences). Are the Coalition parties assuming that they will be re-elected next year, and is it not supremely arrogant of them to believe this, considering the harm they have caused so far?

Thirdly: If the Coalition parties do want to be re-elected, it is clear that they will need to try to bring a majority of voters back on-side. Therefore we may reasonably expect to see all sorts of gifts coming our way over the next year – tax breaks or whatever else they can devise – aimed at increasing the amount of money in our pockets. However, knowing that 60 per cent of the Tory/Lib Dem cuts process is still to come, this means they will want to make even more cuts if they are returned to office. Why would we want to give them our vote, in return for presents they’ll grab back as soon as they’ve got what they want?

Fourthly: Iain Duncan Smith has inflicted £28 billion of cuts on people receiving benefits from his Department for Work and Pensions. If the IFS statement is accurate, then the total amount he’ll want to cut is a staggering £70 billion. If we consider that the amount spent on pensions (more than £100 billion) is safe, this leaves only tiny amounts for all the other benefits supplied by the DWP. Are people currently on Jobseekers’ Allowance to get nothing in the future? What about disabled people getting DLA or PIP? How about all the many, many people on Employment and Support Allowance, including those currently going through the appeal process because of wrong decisions? Mr… Smith might claim that all these benefits are being rolled into Universal Credit, but that won’t happen until 2016 or 2017 according to his own estimates, and the rest of us know that it’s not going to happen at all. Will we have any benefit system left if these cuts continue – or will the Tories try to trick us into buying duff health and employment insurance policies from their friends at Unum instead?

The BBC report said George Osborne wants a budget surplus by 2018-19, but “additional spending, population growth and extra demands on the NHS meant more cuts were needed”. This statement is not supported by any source material and we may take it this is a further sign of BBC right-wing bias.

The additional spending was made necessary because of unintended consequences of the cuts – the Tories got their sums wrong. Population growth, if due to the EU immigration that everyone complains about, will have led to a net growth in the economy as it has been proved that migrant workers from the European Union contribute more to the Treasury than they ever take out – so this is not a cause of increased spending. If the indigenous British population has been growing faster than expected, let us remember that Child Benefit is to be restricted to the first two children in a family (Cameron has denied it so it must be true) and therefore any further growth in individual families will have no bearing on the government’s bank balance. Extra demands on the NHS are a thorny subject as the Coalition promised to inject billions of pounds into the health service but no evidence has yet appeared to show that it has. Since this money was promised many years ago, it should have been included in national budgets and should not be a burden now.

The IFS also reports that there is no evidence of a housing bubble in the UK, as a result of Osborne’s ‘Help To Buy’ scheme. This was introduced last year, when Osborne realised that his austerity programme had failed and resorted to a Keynesian ‘pump-priming’ scheme to boost the housing market. Fears that this would lead to a debt-fuelled ‘bubble’ made commenters like myself cautious about the plan.

However, if there are no signs of a debt-fuelled bubble, then we should consider this to be proof that Keynesian economics was always the way forward and austerity has led us up an economic dead-end for the past four years.

This means none of Osborne’s ridiculous cuts were necessary (barring a few to eliminate waste and corruption – but under a Conservative-led regime we have no evidence that these took place and every reason to believe the opposite to be true. Look at the current ‘cronyism’ row over the appointment of Conservative ‘yes’-people to senior quango posts).

It also means the government and the right-wing media have been lying to you for four long years – and will continue doing so in self-justifying stridence for another 14 months to come.

Let them talk.

But don’t ever let them convince you their cuts are necessary.

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Cameron’s Con: His ‘planned’ rules against benefit tourism are already British law

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[Picture: I Am Incorrigible blog – http://imincorrigible.wordpress.com/2013/09/15/evidence-not-ideology-benefit-tourism-the-problem-only-fruitloops-and-tories-can-see/ – which agrees that benefit tourism is a non issue and distraction from the UK’s real problems.

David Cameron seems to have created quite a stir with his plan to restrict access to benefits for EU immigrants. Would he have made such a splash if it was widely known that, firstly, benefit tourism is a myth and, secondly, most of his ‘new’ measures are already in place?

The BBC has reported that Cameron is “proposing powers to deport homeless migrants and cut rights to unemployment and housing benefits”. This is simply not accurate.

The ‘proposal’ to stop out-of-work benefits being paid after six months unless a claimant has a “genuine” chance of a job is already enshrined in UK law.

Take a look at the Citizens Advice Bureau website, which states quite clearly: “If you’re looking for work and have registered as a jobseeker at Jobcentre Plus… you will … have to take the Habitual Residence Test [to prove residence in the UK] and prove you intend to settle in the UK and make it your home for the time being. Usually, you can only have jobseeker status for six months. However, this period can be extended if you’ve a genuine chance of finding work.

“If you lost your job in the UK and it wasn’t your fault and you’re still genuinely looking for work you won’t have to take the HRT. This is called involuntary unemployment. For example, you might have been made redundant or your fixed-term contract ended. You must also have been employed for one year before you lost your job, and be now registered as a jobseeker. If you’ve been employed for less than one year you can only keep the status of worker for six months after you lose your job. However, you can keep the status for longer if you show that you’ve a genuine chance of finding work.”

So the plan to stop payments unless a claimant has a “genuine” chance of a job is not a plan at all. It is already taking place.

What about the ‘proposal’ to ensure that new migrants cannot claim housing benefit immediately?

This one’s a little less clear, but the CAB website again comes in handy, where it states: “If you are from overseas or have recently come to live in the UK you may have difficulty claiming the benefit, depending on your immigration status.”

The ‘proposal’ to deport people caught begging or sleeping rough is already part of UK law. The Immigration (European Economic Area) Regulations 2006 allow such deportations on the basis that beggars who are sleeping rough are “not exercising residence rights in the UK”.

The proposal to quadruple fines for employers that do not pay the minimum wage seems genuine – but of course this is not a sanction on European Union migrants at all – it is an extension of a previously-announced plan to toughen penalties for any employer in the UK that fails to pay the minimum wage.

Some might say that the new plan does not go far enough. The maximum fine for transgressors is currently just £5,000; quadrupling it is just £20,000. That’s peanuts to a large firm.

All of the above leaves just one new ‘proposal’ in Cameron’s list – to deny out-of-work benefits to new migrants for the first three months of their residence in the UK.

In all honesty, we should be able to live with that. If a person is coming to this country to work, it makes sense for them to have a job waiting for them – or for them to be able to support themselves until they are able to secure one.

[But it turns out that even this is nothing new. As commenters have stated since the article went up, EU migrants who claim benefits and then move to another country in search of work must fill in an E303 form in order to receive benefits at the destination country. These are issued at the same rates as in their country of origin, for a total of three months only. Failure to find employment in that time means the loss of the benefit or a return to the country of origin. This means Cameron has proposed nothing that is new.]

It is the context of this measure that is sinister. Cameron is implying that EU immigrants are coming here as “benefit tourists” – setting themselves up in the UK to suck down benefits that they do not deserve, with the British taxpayer footing the bill. Evidence shows that this claim is untrue.

Channel 4’s FactCheck Blog made it clear – less than one month ago – that it “found little empirical evidence that the problem existed”.

The evidence shows that “immigrants are generally net contributors to the British economy, paying more into the system in taxes than they take out by accessing public services.

“Migrants from the A8 countries of central and eastern Europe who joined the EU in 2004 were 60 per cent less likely than native-born Brits to claim benefits, and 58 per cent less likely to live in council housing. In every year since 2004 the A8 immigrants had paid in more than they had taken out.”

The blog entry quotes a study from CReAM (the Centre for the Research and Analysis of Migration) which states: “Whereas [European Economic Area] immigrants have made an overall positive fiscal contribution to the UK, the net fiscal balance of non-EEA immigrants is negative – as it is for natives.”

In other words, UK citizens are a greater drain on the state than immigrants from Europe. Between 1995 and 2011 EEA immigrants paid in 4 per cent more than they took out, whereas native-born Brits only paid in 93 per cent of what they received. Between 2001 and 2011 recent EEA immigrants contributed 34 per cent more than they took out, a net contribution of £22bn.

Figures from the Department for Work and Pensions agree with the thrust of this research (although the figures are not directly comparable): At February 2013, 16.4 per cent of working-age UK nationals were claiming a working-age benefit compared to 6.7 per cent of non-UK nationals, and 5.9 per cent of foreign nationals who registered for a national insurance number in 2011/12 were claiming out-of-work benefits within six months, down from 6.6 per cent the year before.

There is no evidence that significant numbers of people come to the UK seeking a life on benefits.

David Cameron has proposed a series of phantom measures to combat a phantom problem.

It might please his swivel-eyed followers, but the rest of us should despair of him.

He is pandering to fantasies rather than working for the national interest.