Saturday 9 April 2011

An ill wind from Tory HQ

Ken Livingstone
If you're suddenly feeling worse off this month, blame the Tories - David Cameron, George Osborne and Boris Johnson.

Worse-off Wednesday was an apt way to describe April 6, when a whole series of tax changes, benefit cuts and reductions to welfare payments imposed by the government came into effect, hitting pay packets and peoples' quality of life.

We are seeing housing benefit cuts to the tune of £220 million, tax benefit cuts amounting to £1.18 billion, a freeze in child benefit equivalent to a £356m cut and other welfare cuts amounting to £664m.

These cuts come to about £10 for every household in Britain. But clearly not everyone will lose out in the same way.

The biggest losers from these changes will be those entitled to welfare - the working poor, the growing number of unemployed and those with disabilities.

Not only are they the ones hardest hit by the changes but they are those least able to afford them.

But all this is just the beginning.

The government's own data shows that cuts will rise over time, so that by 2014-15 they and other cuts will amount to £18.08bn - or more than £750 for every household in Britain.

And it won't just be the very poorest who will suffer - the "squeezed middle" are in for a tough time too.

Combined, those on low and middle incomes are bearing the brunt of the government's measures.

A freeze on the threshold for the higher-rate 40 per cent tax-band at £35,001 rather than allowing it to rise with inflation to £37,400 means 750,000 people will be brought into the band for the first time, according to the Institute for Fiscal Studies.

The increase in employees' national insurance contribution rate from 11 to 12 per cent is also a tax increase.

And it all comes on top of an increase in the VAT rate, hitting the entire population with a regressive tax, and rising inflation which is now running at three per cent above average wage growth.

Much of this inflation is either directly caused by the Tory-led coalition through the VAT hike or has been allowed by them in the form of rising utilities bills and increased fares.

In London, for example, the impact of Chancellor George Osborne's lifting of the cap on rail fare increases is compounded by Mayor Boris Johnson's above-inflation public-transport fare rises.

In three years a single bus or tram fare in the city has risen from 90p to £1.30 - an increase of 44 per cent.

Fares in London are planned to rise by two per cent above inflation for years to come.

Londoners are also hardest hit by the flat-rate cuts in benefits such as housing, because housing is so much more expensive in London than in the rest of the country.

According to homeless charity Shelter 160,000 households across the capital will be affected by the cut.

All these cutbacks will literally hit hundreds of thousands of households, most of them in work.

According to independent research from the Resolution Foundation London families will lose an average of £603 a year as a result of the government's decision to reduce the percentage of child-care costs paid through the Working Tax Credit, £167 more than the average across the UK (£436). There could hardly be a clearer illustration of the damage being caused by the coalition government than families losing £603 a year as a result of just one of the many cuts being made.

So it was richly ironic that Boris Johnson used his £250,000-a-year Telegraph column this week to whinge about Labour criticism of government policies, comparing it to trying to "spread gloom in the sunshine."

The weather may be sunny but the winds blowing from the Conservative-led government are as icy as ever.

•It is becoming increasingly apparent that public opinion is moving against military intervention in Libya.

YouGov's Anthony Wells wrote earlier this week that "for the first time so far our poll today showed more people (43 per cent) thinking the military action was wrong than those in favour of it (38 per cent)."

Moreover opinion has moved on whether the intervention is going well.The week before last, 57 per cent of the public thought it was going well and 19 per cent thought it was going badly.

Polling this week found 42 per cent thought it was going well, 34 per cent saying it was going badly.

It is hardly surprising. Though posed in liberal and humanitarian terms, there is no clear logic to the Libya intervention compared to other humanitarian crises and problems in the world. There are few clearly defined war aims and no sense of what the exit strategy for the intervention may be.

At a time when the public is being told there is no money for libraries, when the NHS faces its greatest threat, when the Royal Mail is under threat of privatisation and when our young people are being saddled with cuts and mounting debt, it is not hard to see that the public will take some persuading over the long-term that intervention is the right policy.

•The Andrew Lansley rap might have once seemed an unlikely hit this spring, but the NHS is very dear to the British people's hearts.

Lansley, Cameron and Clegg have been forced to announce a "pause" which amounts to a tactical maneouvre to work out how best to proceed.

The Tory-led government has opened a two-pronged attack on the NHS. Although it was claimed that NHS spending would be protected the experience up and down the country is of resources being squeezed.

That is borne out by the fact that although nominal health spending is planned to rise from £103bn to £114.4bn - just over 11 per cent - while over the same period the Office for Budget Responsibility projects that inflation will have risen by 22 per cent.

That's a real decline of 11 per cent.

The fundamental character of the NHS is threatened with change with the government looking for the biggest conceivable private-sector role.

Government policy is not about improving the NHS for patients but improving the profits of the private sector.

All over London we are seeing examples of Londoners concerned about the future of their local health service - such as in the campaign to oppose the closure of the A&E and maternity departments at Romford's King George Hospital.

It's one of the many reasons I'll be putting campaigns to defend the NHS top of the agenda this spring.

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