Politics

Cameron’s hamstrung Exchequer

Published

6 years ago

April 28, 2017

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

Key questions ‘remain unanswered’ as Welsh Government introduces Environment Bill

Published

1 day ago

March 26, 2023

Tom Sinclair

THE CHARTERED Institute of Environmental Health (CIEH) has welcomed the introduction of The Environment (Air Quality and Soundscapes) (Wales) Bill but say that key questions remain unanswered regarding vital elements of how the Bill is to be implemented.

On Monday, the Minister for Climate Change, Julie James MS, tabled the Bill in the Senedd with the Bill being debated yesterday.

CIEH were an important stakeholder in helping shape and influence the Bill via its partnership with Healthy Air Cymru, and sat on regular Cross-Party Group meetings on the Clean Air Bill Cymru, as it was previously known. CIEH had already raised concerns about various sources of emissions of PM2.5, the possibility of introducing regulations on domestic wood burners in urban environments, as well as highlighting the role noise has to play in the wider public health debate around air quality.

It is promising that the Welsh Government have taken steps to reflect CIEH’s input with the last-minute decision to broaden the Bill by renaming it to include ‘soundscapes’ within its focus. CIEH has welcomed the commitment from the Welsh Government to publish a soundscape strategy and is urging the Welsh Government to continue its engagement with CIEH and environmental health professionals across the nation.

However, key questions remain as to how the Bill will operate in practice.

For example, CIEH are asking why the Welsh Government have missed a golden opportunity to set national targets for PM2.5 and nitrogen dioxide in line with the World Health Organisation’s (WHO) guidelines.

Furthermore, CIEH have sought clarification on intentions to bring national and local authority air quality monitoring regimes together, as the current system of air quality review is disjointed and not fit for purpose.

Finally, the Bill says nothing on introducing regulations on domestic wood burners in urban areas where there are on-grid alternative heat sources. CIEH has asked why the Welsh Government have not considered introducing regulations that would tackle one of the primary sources of PM2.5 emissions which are so deleterious to public health.

Ross Matthewman, Head of Policy and Campaigns at CIEH, said: “The Welsh Government have missed a golden opportunity to introduce ambitious, robust environmental protection targets with this Bill.

There was an opportunity to lay down a marker by introducing robust targets for both PM2.5 and NO2 in line with WHO guidelines, yet what has emerged has been rather underwhelming.

However, we welcome the decision by the Welsh Government to publish a soundscape strategy. Such a move acknowledges the role that soundscapes play in the wider air quality discussion, and we hope the Welsh Government engages with CIEH and our members with regards to producing this strategy when the time comes.”

News

Hundleton: Less houses means £9k community payment reduction

Published

1 week ago

March 20, 2023

Bruce Sinclair Local Democracy Reporter

A CALL to reduce the amount of community payments connected to the development of a Pembrokeshire housing estate by more than £9,000 was given the thumbs-up by county planners.

The request to reduce payments made in connection with a Section 106 community payments agreement was made after the developer built less homes than previously planned.

The Section 106 agreement required financial contributions to secondary education provision, public open space, transportation and affordable housing, in relation to the building of 32 dwellings at the Bowett Close site in Hundleton.

Members of the March meeting of the county council’s planning committee heard 29 homes had been built by applicants WH & NL Developments, with a recommendation the commuted sum – relating to an initial 2014 planning application and a later 2021 application for a lower number of homes – be reduced to reflect the lower number.

The 2021 application had sought to regularise changes to the earlier scheme, reducing the number of properties on-site.

A report for planners said the applicant sought to reduce financial contributions proportionately, seeking an affordable housing contribution drop of £7,631.25 to £73,768.75, a drop in the highways contribution of £562.50 to £5,437.50; a secondary education contribution reduction of £1,054.17 to £10,190.31 and a public open space contribution reduction of £685.68 to £6,628.24, which would lead to a total reduction of £9,933.60.

The report said the reductions in all but the highways aspect could be supported.

“With regard to the highways contribution of £6,000, this figure was required in connection with the impact the housing development would have on local highways infrastructure.

“A reduction in the number of dwellings would not significantly reduce the impact of the development on local highways infrastructure as a development of 29 dwellings still requires a basic level of infrastructure such as footway links.”

Members of the committee supported the recommendation to lower the contribution, with the total reduction amounting to £9,371.10.

News

No affordable housing contribution for holiday lets at Fishguard restaurant

Published

1 week ago

March 19, 2023

Bruce Sinclair Local Democracy Reporter

A NEW restaurant on the site of a disused former garage site in Fishguard’s Lower Town will avoid paying a £15,000 affordable housing contribution if its three associated apartments stay as holiday lets.

The application in the town’s conservation area, submitted by Orwell Pine Co Ltd, for the restaurant/café and three apartments was recommended for conditional approval, subject to the completion of a Section 106 legal agreement, and conditions including the implementation of flood mitigation measures.

A report for members of Pembrokeshire County Council’s March 14 planning committee said: “The application submission proposes residential apartments for the open market.

“The applicant has advised that this is in order to obtain development funding on the wider lending market. However, the intention is for the three apartments to be used as holiday let accommodation.

“Accordingly, the applicant is of the view that a financial contribution towards affordable housing should not be required of the development and requests that it be recognised that the proposal, inclusive of the [business] use, represents a large investment to support local employment, bringing a continued inward investment to the visitor economy, whilst enhancing the conservation area.”

In the absence of an assessment providing evidence that it would be unviable for the development to proceed, policy normally requires a 10 per cent contribution to affordable housing.

This would amount to £15,262.50 for the three properties.

Fishguard & Goodwick Town Council support the application, subject to the prevention of new developments being used at any time as holiday lets.

The report for planners states: “Given the intention is for the units to be occupied as holiday lets it is considered reasonable that a recommendation of approval be subject to a Section 106 agreement, only triggering the required affordable housing contribution should the units be occupied as residential (Use Class C3), there being a permitted development right for properties to move between the C3, C5 and C6 use classes.”

At the March planning meeting, agent Rob Howell said the application offered “an exciting opportunity to bring more to Fishguard and Lower Town,” adding it would bring “year-round employment for local people as well as additional seasonal employment.”

Committee Vice-Chair Cllr Jordan Ryan, who moved the recommendation, said it was a “currently unused site that doesn’t look very nice”.

The application was supported by committee members.

Speaking after the meeting, a spokesman for Pembrokeshire County Council said: “A contribution towards local needs affordable housing will only be required of the development if it is occupied as a sole or main residence.

“If once constructed the apartments are occupied as holiday lets then a contribution is not required.”

“It is permitted to change the use of a residential unit between a sole or main residence (Use Class C3) and a holiday let (Use Class C6) without the need to submit a planning application.

“Following construction of the development, should the apartments first be occupied as holiday lets and then later be used as a sole or main residence this change in use would trigger the requirement to contribute towards affordable housing.”