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Politics

Cameron’s hamstrung Exchequer

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Pledges cost money: David Cameron’s hamstrung Exchequer

THE NATIONAL tabloids are often full of foaming at the mouth headlines about ‘scroungers’, stories about ‘dole fiddlers’, and tales expressing horror that some people pretend to be ill to get disability benefits.

That is nothing new and it is conspicuous that there is a spike in such stories (particularly involving those from outside the UK) when governments of whatever complexion have announced ‘welfare reform’ (cuts) ‘designed to deliver to those most in need’ (not those in most in need).

WHERE THE MONEY GOES: PENSIONS

Welfare spending makes up around 35% of the UK Government’s spending and totals over £260b per year. However, ‘welfare’ is a broad term and only a fraction of welfare benefits spending is on unemployment benefits.

The largest amount paid out in welfare benefits is for pensions and the Office for National Statistics’ last available figures show that £108b of the £258b welfare spend in 2014/15 went on pensions.

In fact, total pension spending has increased by 25% since the financial year 2010/11. This isn’t surprising as life expectancy has been steadily increasing, so state pensions are being claimed for longer. The remaining life expectancy for someone aged 65, in 2016, is 21 years for a man and 24 for a woman.

What that means is that the idea that people have ‘paid in what they get out’ is increasingly untrue. Some of those claiming pensions will have contributed comparatively little to their state pensions, whereas actuarial calculations on future pension need carried out when older pensioners were working would have been predicated on them dying within a few years of retirement. The fact that we are all living longer means that the proportion spent on pensions is likely to continue to rise just at the point when the working age population which funds the spending is in decline.

WHERE THE MONEY GOES: CARE AND DISABILITY

£29 b is spent on personal social services. About £41 b goes on benefits for people who are ill or disabled, while £10 b goes on elderly care payments. Disabled people are more likely to live in deprived areas and work in routine occupations. In the 2011 Census, 18% of people (10 million) reported some form of disability.

As for elderly care, there were 9.2 million people aged 65+ in 2011, making up 16% of our population. The care home population has actually stabilised over the last decade at around 300,000 people, but there has been an increase of 600,000 people (likely family members) providing unpaid care between 2001 and 2011. In total, 5.8 million (10%) provided unpaid care in England and Wales in 2011, and the majority were of working age.

W HERE THE MONEY GOES: POVERTY AND THE UNEMPLOYED

£44 b goes on family benefits, income support and tax credits. This includes benefits such as child benefit and support for people on low income. Around £3.5 b goes to the unemployed.

There were around 3 million people in in-work poverty in 2013. This meant their household income (adjusted for household size and composition) was below the poverty threshold and were in employment themselves. The 10% of households with the lowest disposable income spent an average of £196 a week in 2013. Of this, half (£98) was spent on food and non-alcoholic drinks, transport, housing (including net rent), and household fuel and power.

As for out of work people claiming Jobseeker’s Allowance and Universal Credit, there were 760,200 people claiming these benefits in January 2016. This number has decreased by 11.2% compared with a year earlier

WHAT ABOUT FRAUD?

The notion, often pushed by the tabloids, is that there is a massive amount of benefit fraud. A poll carried out by the TUC in 2012 revealed that British people believed that 27% of benefits were claimed fraudulently.

To describe that as a ‘wild overstatement’ does not do how wrong it is justice. It seems to be one of those figures arrived at on the basis that ‘everybody knows’, rather than being remotely founded in reality.

The actual level of all fraud in the UK’s welfare benefits system was 0.8% in 2014/15.

While that is the amount of detected fraud, to suggest that it is completely out of line with actuality is to ignore the fact that the UK government employs 12 times as many benefits fraud investigators than it has tax fraud investigators.

The UK loses six times more through tax evasion and aggressive tax avoidance than the total value of fraudulent welfare benefit claims. Moreover, the UK fails to collect £34b in tax each year. And that is providing you accept the UK government’s figures, which are disputed by some economists as a wild underestimate.

While benefits fraud is an issue, there is an argument that the amount of time spent on it and the amount of publicity it receives is out of all proportion to the actual value of the fraud involved.

University of Warwick political scientist Adam Taylor said: “

This isn’t to say that benefit fraud is OK or that HMRC isn’t doing anything about tax evasion. But it is wrong that the government feels it can openly threaten the poor while merely cajoling the rich. And it is sad that the tax-burdened middle class reserve their outrage for the single mother working in the cafe while lionising the rich, famous and powerful who are getting away with it, tax free.”

WHO PAYS?

Successive governments have been aware of the crisis facing benefit payments for over two decades and yet none of them has sought to do anything more than fiddle at the margins and target the most vulnerable and weakest members of society: the Cameron Government spent an enormous amount of political capital to no good end making an economically pointless adjustment to housing benefit with the hated bedroom tax. The projected savings from that policy were tiny.

In addition, the amount of direct tax paid by the working population is contracting along with the numbers of those in work and the changing profile of work economic activity.

In the past, when the welfare model was fixed, there was generally one full time bread winner per working class family in a job which lasted an entire working life. Stable incomes represented a stable and predictable tax yield. However, the change from a high labour manufacturing economy to a service-based one with lower labour requirements, altered the whole dynamic of working class life. Multiple part time jobs may reduce the number on the unemployed role, but lower income jobs pay less into the UK’s tax base.

So, the question that all governments face is how to provide people with the welfare benefits they need without upsetting voters who have to pay for them.

NO EASY ANSWER

The issue is particularly acute due to David Cameron’s 2015 promise not to raise National Insurance, Income Tax, or VAT. Where else, the question might fairly be asked, would the money come from? Especially as there is a guaranteed 2.5% increase per annum in the state pension.

Oh – and older voters and pensioners vote in far higher numbers than the young. On the basis that turkeys seldom vote for Christmas, you can guess why politicians are wary of doing anything to affect that demographic.

One thing is certain, fiddling at the margins is not enough. But whether politicians have the will to make the sort of changes needed to the UK’s tax and welfare system, is one of those questions to which there is no glib answer.

Which do you prefer, after all, higher taxes or cuts targeted at those least able to defend themselves?

News

Pembrokeshire County Council group to review ‘climate emergency’

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A CALL for a group to review Pembrokeshire County Council’s decision to declare a climate emergency some six years ago has been backed by councillors.

In May 2019, the council declare a climate emergency following a notice of motion by Cllr Joshua Beynon calling on the authority to back the global consensus that climate change poses a risk to the well-being of future generations.

He had urged county councillors to back a motion to take “bold, decisive action” to fight “truly, catastrophic” climate change.

He called on the council to commit to becoming a zero-carbon local authority by 2030.

At the July meeting of Pembrokeshire County Council, a notice of motion by Cllr Mike Stoddart called for the establishment of a working group to review the decision made by the council to declare a climate change emergency.

Cllr Stoddart’s motion said: “Given the turbulence on the global financial markets; the parlous state of the UK’s public finances; Pembrokeshire County Council’s projected funding gap; and the government’s softening of its policies on the switch to EV vehicles and heat pumps, this council establishes a seven person, politically balanced working group to review the authority’s decision to declare a climate emergency at its meeting on May 9, 2019.

“The working group will be asked to: (a) examine the effect of the emergency declaration on the level of council tax in Pembrokeshire and particularly the extent to which any such increases militate against the authority’s anti-poverty policies.

“(b) The cost of decarbonising the council’s housing stock and the effect this has had on the authority’s ability to finance the building of new housing.

“(c) The extent to which the council’s decarbonisation programme has contributed to a reduction of the risk of runaway global temperature increases, and (d) any other effects that the working group considers may have adversely impacted the wellbeing of the residents of Pembrokeshire.”

Cllr Stoddart’s notice of motion was previously supported at the June meeting of the council’s corporate overview and scrutiny committee, with a recommendation to full council in July meeting, to reinstate the Net Zero Working Group to review the contents of the notice of motion and, subject to the outcome of this review, review the future delivery of the Net Zero Action Plan.

Cllr Stoddart’s call was backed by Cllr Steve Alderman, and Cllr Rhys Jordan, who said: “I fully support this, it couldn’t come sooner; around England and Wales councils are looking at this, there’s been a huge push for a ‘net zero’ agenda at any cost, I don’t think we’re in a position to drive that.”

Cllr Aaron Carey said: “We’ve set ourselves some lofty goals, but we haven’t got the money to back it up.”

Members overwhelmingly agreed to back the June committee recommendations.

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Climate

Newgale road scheme proposal report expected by autumn

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A FULL report on Pembrokeshire council proposals for a £40m-plus road realignment scheme at flood-hit Newgale before a formal planning application is made is expected to be completed by the autumn.

Newgale was hit hard by flooding following storms in early 2014 storms, and later by Storm Dennis in 2020.

In 2014 it even saw a visit by the-then Prime Minister David Cameron following the storms.

A public consultation – through agent AtkinsRéalis – was launched earlier this year ahead of a formal council application to Pembrokeshire Coast National Park for Phase 1 of the Newgale Coastal Adaptation Project, which would see the development of a new inland section of road with bridge over Brandy Brook some 2.3km inland, to replace the coastal section of A487 at Newgale that will be closed.

Varied claims have been made about the cost of this scheme, from £20m upwards, some even saying it could cost as much as £60m, with millions spent on consultation fees to date.

An alternative, cheaper, scheme has been proposed by STUN – Stand Up for Newgale, proposing a section of the shingle bank at Newgale be realigned 10-12 metres seaward leaving an over-wash barrier between it and the A487 to capture any pebbles and sea water.

In a question, on behalf of Solva Community Council, heard at the July 17 meeting of Pembrokeshire County Council, community council chair Gareth Chapman said STUN’s proposal “appears to be an under £1m proposal with up to 85 years’ lifespan compared to the conservative £40m-plus estimate for the PCC proposal”.

The question added: “PCC’s proposal is to counter for road closures that rarely happen and, even then, require little expense to restore the pebble bank. It should also be remembered that on several occasions, flooding at Newgale occurs because the river outlet is blocked preventing water from the valley escaping and not as a result of a high tide or storm.

“It is acknowledged that climate change and coastal issues at Newgale may eventually in many years force a change in the highway arrangements at Newgale but it is felt that all efforts should be made to retain the character of the village and iconic views for as long as possible.”

It also asked for the council to “commit to thoroughly examining the alternative proposal,” and to “fully take on board the overwhelming public opinion regarding the future of Newgale”.

Responding, Cabinet Member for Residents’ Services Cllr Rhys Sinnett said a full presentation had been given to the local community council earlier this month, adding a number of options had been considered in 2016 and 2017 which were “ruled out at that stage for a number of reasons” prior to the scheme now mooted.

He told members the council had undertaken “extensive consultation which has all fed into the development of the scheme,” with a full report expected before the autumn prior to a formal planning application.

“Any coastal protection scheme, we believe, would be a multi-million-pound scheme, certainly in excess of the £1m from STUN,” said Cllr Sinnett, adding those proposals would “only delay the issue for a short period of time, if at all.”

He told members a response to the STUN proposals would be included as part of the full pre-application consultation responses, with council representatives agreeing to meet with STUN.

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Cymraeg

Call for more support for rural areas of Pembrokeshire

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A CALL to protect Pembrokeshire rural communities, “to ensure no part of our county is forgotten”, was heard by councillors.

At the July 17 meeting of Pembrokeshire County Council, members heard a notice of motion submitted by Cllr Delme Harries, Bro Gwuan county councillor and vice-chair of council, calling for a working group for supporting rural areas.

Cllr Harries’ motion said: “It is increasingly evident that while significant effort and investment has been directed toward revitalising our towns, many of our rural areas are being left behind.

“These communities are the backbone of our agricultural economy, custodians of our landscape, and home to vital heritage and culture and the Welsh language. It is time we restore balance and give our rural communities the attention, voice, and opportunities they deserve.

“To ensure that no part of our county is forgotten, I propose that we establish a dedicated cross-chamber working party focused on reigniting our rural areas — supporting rural enterprise, connectivity, housing, access to essential services and how we can help young people to live and work locally.”

Members agreed the notice be sent to the council’s services overview and scrutiny committee for discussion, the call potentially returning to a future meeting.

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