Another disaster at DWP?

Once again the Tories are having to back pedal as their Universal Credit programme shows signs of falling behind schedule and facing major problems. The system, which will roll all benefits and tax credits into a single payment automatically linked to earnings, was expected to be trialled for new claimants across four areas of the country from late April.

Unfortunately, and typical ignorance of the simple realities of life, Iain Duncan Smith failed to check out with those who deliver welfare benefits and consequently he has been forced to scale back the trials to a single JCP office in Ashton-under-Lyne. So much for a grand roll-out.

Three other pilot areas in Wigan, Warrington and Oldham that were also due to ‘test out’ the new programme will not now begin processing the payments until at least July and possibly later.

Of course it would be nice to think that IDS would have the humility to admit to, and display a little embarrassment, but I suspect we may be waiting a long time. This is a man noted for his single-mindedness. No doubt over the coming days we will hear a range of excuses, but the bottom line is that it has been a kick in the pants for the Secretary of State.

In February, 2013, Iain Duncan Smith drafted in one of the Government’s most experienced trouble-shooters to take charge of the programme – a move which led to the departure of another senior DWP civil servant a few weeks later.

The delay in rolling out Universal Credit are probably due to the fact that most frontline staff do not have the training, computer programmes or experience in place to avoid making disastrous mistakes which could lead to people not receiving the benefits to which they are entitled. A point made by a number of welfare organisations months ago. Could this be more evidence that IDS doesn’t listen to those around him?

In its announcement of the delay the Department of Work and Pension made no attempt to explain why it was unable to proceed as planned. Interestingly, in a neat little sidestep a spokesman for the department searched for a way to get IDS off the hook and tried to suggest it was “sensible” to start with one area before rolling it out to the other three in July.

Speaking on behalf of DWP, he said:

“It will allow us to make any changes that we feel we need to make and see what works and what doesn’t”.

Liam Byrne, Labour’s Shadow Work and Pensions Secretary, tried to capitalise on this bungling by condemn UC and describing the announcement as “yet another embarrassing setback”.

He went on to say:

“The scheme is already late and over-budget and in spite of earlier promises Ministers have admitted that they have no idea when out of work claimants will move over to Universal Credit … The truth is the IT for Universal Credit appears to be nowhere near ready. Universal Credit calculations depend on salary data from HMRC's new PAYE Real Time Information system. Obligations for small firms to provide PAYE data on or before each employee payment have recently been delayed from April until October. And DWP are so worried they are now barring access to their five main contractors. This scheme is now on the edge of disaster. Ministers must admit this project is in crisis and start to fix it now – before millions of families tax credits are put at risk.”

Regrettably, Byrne failed to point out that UC will create significant challenge to low-income families. The simple reality is that, according to a Resolution Foundation report, “Conditions Uncertain”, almost 1.2 million low-paid workers entitled to support under Universal Credit will have to look for extra work or face the risk of having payments withdrawn. Furthermore, in a report by Tanni Grey-Thompson, 100,000 disabled children stand to lose up to £28 a week and 116,000 disabled people who work will be at risk of losing up to £40 per week from help towards additional costs of being disabled.

These are injustices that appear to be going through on a nod and a wink. The Tories and their Lib-Dem puppies will force this programme onto the most vulnerable in our society and it is a responsibility of those on the left to expose the extent of these injustices and campaign for their eradication.

We have a responsibility to do everything in our power to protect the poor and the vulnerable. If we fail them now we have no right to ask for their support later.

Tory slash and burn economics are hurting the most deprived

A financial education charity has said tax and benefit changes coming into force today will leave households £200 worse off. Credit Action, a financial education charity, has calculated they will leave households £200 a year worse off.

According to their research reductions to what parents could claim in childcare costs through the working tax credit alone would leave some families worse off by up to £1,560 a year.

Other changes due to come into force today include a £1,000 rise in the threshold at which people start paying income tax - this will mean 500,000 people will be lifted out of paying income tax altogether, a freeze in the inheritance tax threshold, an extra 5% on stamp duty for homes worth more than £1m and restrictions on tax relief on pension contributions for those on more than £150,000 a year.

The government is also cutting childcare support through the working tax credit. The resolution foundation says this will cost 450,000 people, which includes almost 290,000 lone parents, an average of £436 a year. For some families with two or more children it could be up to £1560 lost. This little-noticed change will have a huge impact on hundreds of thousands of families, but particularly mothers who work part time for low pay. Cuts to childcare support make no sense if it simply makes it harder for parents to work – as the office for budget responsibility has warned – and so ends up costing the taxpayer more.

The biggest losers will be those earning more than £35,000, with someone on £50,000 seeing their take-home pay reduced by £500 a year, according to the Institute for Fiscal Studies.

The results of Osborne’s Budget are really quite frightening, especially for the poorer sector of our society. And what are the government doing to help them? Nothing – it seems they are oblivious to the demise of the average man and woman in this country. Understandable really, given that over 20 of the Cabinet are millionaires and have never really experienced hardship.

This bunch of elites and toffs are totally unaware of the economic realities facing society -

1. The VAT rise will cost families with children £450 this year alone
2. Tax credits and child benefit will be frozen from April
3. Petrol prices are soaring with the VAT rise adding 3p per litre
4. Economic growth has stalled
5. Unemployment is rising again – now at a 17 year high
6. Nearly 1 million young people are now out of work

But fear not, for the government have a strategy to help the less well off. Called the child poverty strategy, it aims to offer genuine opportunities to the most deprived people in Britain. Many disagree with the principles outlined in it pages and argue it is a bungling attempt to solve a critical problem.

Responding to the publication yesterday of the Government’s child poverty ‘strategy’ and social mobility strategy, the Chief Executive of Child Poverty Action Group, Alison Garnham, said:

“A child poverty ‘strategy’ which does not set out how poverty numbers will fall, and by when, is not a strategy and is incredibly disappointing and surprising given the Prime Minister’s stated commitment on tackling poverty.

“The ‘strategy’ is unlawful because it has not kept to the requirements laid down in law by Parliament. An expert Child Poverty Commission should have been set up and consulted in the strategy’s preparation. This failure shows in the poor quality of the ‘strategy’ itself.

“It is absolutely staggering to see in the 'strategy' cuts to housing benefit and support for sick and disabled families that will make poor families poorer. On top of benefit cuts, wage stagnation and rising prices for basics like food, fuel and clothes mean there is an immediate crisis for families. Urgently addressing the financial crisis for families should be the foundation for the strategy.

“Requirements on social inclusion and the progress Ministers expect to make on their targets by 2014 are missing. We are astonished to see a consultation on scrapping child poverty duties for local government promoted in the ‘strategy’, instead of being clearly ruled out.

“The ‘strategy’ starts from a false premise, suggesting that the last decade made no progress and did not address worklessness. In fact there’s been a downward trend for child poverty in workless households, but an upward trend for in-work poverty, which is now the larger problem.

“Although we finally have a document that tells us what the Government plans to do, it appears to do very little. Taken together with the social mobility strategy it is hard to see how they will have any traction on the major problem of child poverty we face. Britain could have the same low rates of child poverty as other European countries, but to achieve this we need a strategy that learns the lessons of what successful countries on child poverty have got right and addresses the structural unfairness in our own economy.”

On top of all this, on April 1st housing workers and their tenants faced the start of a two-year package of reforms to housing benefit that will have far-reaching effects on families and communities across the whole of the UK.

The new housing benefit caps for people in the private rented sector and the move to cut the number of properties people can choose from will have an immediate impact on families looking to find a new rented home.

There is also an important change to the levels of housing benefit that people in both the social and private sectors will receive if they have adult children at home.

From 1 April, tenants sharing their home with other adults need to collect more money from them to contribute towards the rent, or make up the difference from their own money. This will be an incentive to tenants to encourage their children to leave home and could also lead to greater risks of rent arrears.

Sarah Webb, Chief Executive of the Chartered Institute of Housing (CIH), said:

"People are going to have their options about where they can live cut significantly and it is likely that demand for the properties that remain available will be squeezed further.

"Government has argued that rents will fall as a result of the measures. There is no evidence at this time to suggest that landlords will respond to the changes by cutting their rents. Indeed, the latest surveys from across the sector suggest that rents are going up as demand outstrips supply and the number of new homes being built continues to be half of the level needed."

The average rent in England and Wales edged ahead by 0.2% to £684 a month in February 2011, to leave the typical cost of being a tenant 3.9% higher than in February last year, according to letting agency network LSL Property Services.

Ms Webb added: "Where tenants face significant shortfalls the choice is going to be stark, find money from somewhere else or move. Given these are people on low incomes their ability to save by cutting back on other items is severely limited.

"Ultimately, this will mean low-income families moving from the communities where they have jobs, where their children are in schools, where they having strong social networks."

The full measures which have now come into force are:

1. There will no longer be a five bedroom Local Housing Allowance rate. Weekly Local Housing rates will not exceed £250 for a one bedroom property; £290 for a two bedroom property; £340 for a three bedroom property; £400 for a four bedroom property.
2. The £15 excess will be removed as soon as the Local Authority reviews a claim. Claimants will no longer be able to pocket any excess money after their rent is paid.
3. Non-dependants living in households of Housing Benefit claimants will see their deduction increases take effect from April 2011.
4. Disabled people with a long-term health condition who need overnight care or live with someone with similar needs, may now be able to claim Housing Benefit for a private rented property which has an additional bedroom for a non-resident carer.

Bearing all this in mind, how can the government legitimately talk about increasing fairness, supporting those who are less privileged and increasing the chances for the poor? Once again it seems the Tories are full of lies and dishonesty just so they can hang onto power.

Musings of a new granddad

Recently I became a grandfather and since the birth I’ve had the opportunity to reflect on the kind of society young Zach will inherit as he grows up. A chance to also consider whether all those changes I dreamed of and campaigned for as a young man have happened.

Back in the 1960s and 1970s we were going to change the world. Our heroes were radicals with exotic names – Tariq Ali, Daniel Cohn-Bendit and Mao Tse-Tung. We fought on the streets, on campuses and in the back rooms of dingy pubs, all in the belief that any day the old order would fail and we would herald a new age. An era with equality for all, an absence of poverty and above all, freedom from the threat of nuclear war.

Forty years on, it seems to me very little has changed. Our revolutionary leaders either conformed to the “system”, or have been discredited. Tariq Ali became one of the leading lights of mainstream Labour party politics, Daniel Cohn-Bendit joined the Greens and sits in Strasbourg as a member of the European Parliament and Mao has been thoroughly discredited and found to be far more authoritarian than all our worst nightmares.

In the 60s and even in the 70s, we marched against a variety of wars, including the Six-Day war and Vietnam. Today we oppose conflicts in Iraq or Afghanistan. Forty years ago, we marched from Aldermaston to London in opposition to nuclear weapons. Nowadays, we stand silently as the government announces there will be a replacement for Trident.

As a young man and eager member of the Communist party, determined to change the world I stood horrified as the Berlin wall was raised, and watched the oppression in Czechoslovakia. There is no Communist party today – well there is, depending on whether you want to look at the Communist Party of Great Britain, the New Communist Party or the Communist Party of Britain (Marxist-Leninist). The revolutionary road has been largely superseded by the democratic path but, just like in the 1960s there is little or no money in the coffers, so most of the hard left find it hard to stand candidates.

The Labour Party back in the 1960s was led by a one-time lefty, who swung to the right once he took over the leadership. Those on the left in those days had held much hope in the leadership of Harold Wilson, only to find him slipping away from the fundamental values outlined in Clause lV of the Constitution of the Party. In 2011, there is no Clause lV – well that’s not strictly true, but there is no longer any requirement for the party to seek control for the means of production and distribution. Blair and his New Labour project effectively put paid to that idea. The latest incarnation of leadership in the Labour Party is a product of the New Labour project and despite being nicknamed “Red Ed”, his pronouncements against strike action to oppose the cuts are reminiscent of the words of Wilson, Callaghan and Kinnock.

In the 1960s, we rediscovered the notion of poverty and began to realize there is an ‘underclass’ in modern society – a sector who earn less than 60% of the national average income. Fourteen years ago, New Labour declared war on poverty – they failed – we still have an underclass and little, if anything has changed. The top elite still own the vast majority of the wealth in this country. A carer will still live on a substandard income whilst a banker can earn an annual income in excess of £8m

So am I cynical? Yes – and I think I have a right to be. My generation let our young people down. We sold out our values for the comfort of a modern three- or four-bedroomed semi in the ‘burbs. We satisfied our idealism with pay increases and a more comfortable life. When Maggie set about dismantling the unions we didn’t cry out in horror and when Blair finished the job we sniffed and said: “So what can I do about it?”

In short, my generation doesn’t have much to be proud of. A lot of failed ideals and trashed values. So my prayer for my young son is simple. Learn from us – don’t sell out, don’t give in and don’t trust those who tell you that sooner or later the system is about to change. It isn’t. The system will never change – you have to change it.