Budget 2010: how I see it

Some bullet-points based on my (possibly limited) understanding of the measures in the budget, followed by a more general analysis.

Cuts to Disability Living Allowance – this one has me confused and, I presume, deliberately so.  I can’t see that introducing a medical will make any difference, since my understanding is that you don’t get DLA without producing reams and reams of medical evidence from every nurse or doctor you’ve done so much as sneeze in front of, and hence every applicant who can meet that test will also pass the medical, presuming the government-appointed medics are following the same criteria.  I can only assume, therefore, that ‘introducing a medical assessment’ is code for ‘making the criteria far, far tougher, even though qualifying for DLA is already impossibly hard’.  Saying that every existing claimant will be forced through the assessment seems positively cruel to me.  I mean, every claimant?  Including people who are so profoundly disabled they can’t co-ordinate their movements, can’t speak, can’t eat/ dress/ wash themselves – they all have to get a special, government-approved doctor to agree they’re disabled?  Still, it sounds like this will be very lucrative for whoever gets the contracts to do the medicals.  (Note for wealthy people: buy ATOS Origin shares.)  I wonder if it’ll actually end up saving money, or costing more.

Housing Benefit – The whole concept of capping Housing Benefit, or cutting it by 10% if you’ve been unemployed for more than a year, is irreducibly stupid.  Housing Benefit is paid to cover the cost of housing someone.  It doesn’t matter if it costs £50 or £400 a week to house them, or how long they’ve been unemployed for – that’s still what it costs.  If HB pays substantially less than the actual rent charged, that’s the same as paying nothing, because poor people are, strangely enough, poor, and thus have no other source of income to make up the difference, which means they can’t take up a partially-funded tenancy, and without the tenancy they’re not eligible for the benefit.  A policy of instituting a national cap on Housing Benefit is, essentially, a policy to withdraw it altogether from people who live in expensive parts of the country.  The decision to cut it by 10% for people who’ve been claiming JSA for more than a year is, in effect, a decision to withdraw it altogether from the long-term unemployed.  If this – the phased withdrawal of Housing Benefit – is the Lib-Cons’ ambition, they could at least have the guts to say so.  It is very hard to see how this policy will not trigger a dramatic rise in homelessness.  I’d almost forgotten what it was like to see people huddled under blankets on every street corner but, of course, with a Conservative government in power we should expect to see it again soon.

Cuts to every other benefit – The decision to up-rate benefits in line with the CPI rather than the RPI sounds like a technical change of little significance, but will actually be equivalent to a real-terms cut in every benefit every year – currently the CPI is 1.7% less than the RPI.  Assuming the difference stays the same (and it will almost certainly increase – unless Mr Osborne’s budget triggers a second recession, that is), that’s a cumulative real-terms cut of 6.8% by the next general election in May 2015, but announced without a single mention of the word ‘cut’.  Very clever.

Increase in threshold for Income Tax – good in principle, but I suspect the effect will be wholly or largely cancelled out by the:

Increase in VAT – ooh, what a surprise.  Actually, there is some surprise that the Lib Dems have swallowed this one.  The Conservatives approve of VAT because it’s the most regressive of all the taxes – everyone pays the same, whether they’re multimillionaires like George Osborne and David Cameron (and Nick Clegg) or part-time school cleaners, which means it falls disproportionately lightly on the well-off, and disproportionately heavily on the poor.  The Lib Dems have always professed to disapprove of it for the same reason.  In fact, the move to a progressive tax system has been a central plank of the third party’s policies for as long as I can remember, which is getting on for 25 years.  If the Lib Dems have been unable to block a decision that will make the UK’s tax-system significantly more regressive (because VAT will account for an increasing proportion of government revenue), it does beg the question of how much influence they have.

I mean, compromising on the determination to make the tax system more progressive, that would be one thing, but compromising to the extent that you actually vote in favour of making it less progressive – well, that’s a lot of compromise.  Something, at any rate, is certain – the decision to increase VAT on fuel to 6% makes an absolute mockery of the claim that the coalition government is looking out for the interests of the poorest.  Rich people will sigh over the increase in their bill, then pay it without noticing; come the winter, poor people will have to choose between heating and eating.  Do keep in mind, at least until you’re deciding how to vote in the next election, that the Liberal Democrats have signed up to this in private negotiations, and will be voting in favour of it.

Voting in favour, in fact, of the entire budget which, according to the coalition rhetoric, protects the interests of the poorest and the most vulnerable in society, but in fact does the exact opposite.  Because the poorest and most vulnerable people in society are people like the disabled, who will be facing additional hoops to jump through before they can get their hands on the pittance of money they’re paid.  A pittance that will, in common with every other benefit, be being cut year-on-year, every year, from now until that benefit is either worthless, or some other government reverses the decision.  And while they’re coping with this, they’re also coping with a threat to cap Housing Benefit that may, one day, mean they can no longer afford the roof over their heads.  Not that they will necessarily have been that comfortable in their homes, since the increase in VAT on fuel will have made it harder for them to afford to turn the heating on.  Because, of course, they’ll be struggling to find the money for the 1% increase in VAT on fuel at the same time they’re struggling to find the money for the 2.5% increase in VAT on everything else.

I didn’t vote for the Lib Dems.  I’d taken note of their sharp lurch to the right under the leadership of Nick Clegg, and decided I didn’t like it.  I’d watched with dismay the enthusiasm with which he talked about the need for ‘savage cuts’ at his party conference last autumn, at a time when even George Osborne was being more circumspect.  So I have no real reason to feel angry, or betrayed – certainly far less reason than those millions upon millions of people who voted Lib Dem in the belief they were voting tactically for ‘anyone but the Tories’ because they wanted to avoid the unavoidable rebalancing of the public finances being carried out by the slash-happy Conservatives.

The Lib Dems will be trumpeting, I’m sure, the very modest increase in Capital Gains Tax for the uncommonly wealthy, and fair enough – George Osborne would have been unlikely to introduce the policy without their prodding.  But this is the only tax change that takes from the wealthy and not the poor, and it’s expected to generate something like £1bn a year.  Meanwhile, the VAT increase which falls hardest on the poor will bring in £12.1bn a year, and benefit cuts targeted primarily at the poor will save £11bn.  This is not a budget aimed at protecting the poor and vulnerable.  It’s a budget that does the absolute opposite of that, one that makes sure the bulk of the cuts and tax-rises are borne by the poor and the vulnerable.  It’s a regressive budget, a consummately Conservative budget, one that, as far as it can, mollycoddles the rich while savaging the poor – and it’s being supported by the Liberal Democrats.

Let’s be clear – there were other possibilities here.  Despite what you’ll hear again and again from the Liberal Democrats and the Conservatives over the next few days/weeks/months/years, it wasn’t a case of keep merrily spending all the way to IMF intervention, or this, and nothing in between.  We could have had a progressive budget, the kind of budget we would all have expected from a government reliant for its very existence on the Liberal Democrats, who were forever telling us about their ‘firm commitment’ to progressive taxation.  A progressive budget that would have increased taxes on the rich, not as punishment, but because they are most able to afford it, and would have used the money to offset some of the cuts in benefits for the very poorest people in society.  A progressive budget that would have passed over an increase in an unfair tax like VAT in favour of a rise in a more progressive tax – like Income Tax, for example.  Instead we’re getting the Conservatives and their determination to make sure that it’s the poor and vulnerable, the people who can afford it least, who will pay the most and pay hardest.  And we’re getting it because that’s what Nick Clegg and the Liberal Democrats want us to get.

The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to tell which was which. -- George Orwell, "Animal Farm".

This entry was posted in Political commentary, Social commentary, Stuff I've read, Stuff I've watched, The benefit system. Bookmark the permalink.

13 Responses to Budget 2010: how I see it

  1. J. Wibble says:

    The Guardian gives the argument on toughening up DLA as trying to “reduce dependency and promote work” (their quotes, presumably of George Osborne). This is obviously nonsense, as you can claim DLA while working. It’s money-saving, pure and simple, and I have a feeling it’s going to horribly backfire. Citizens Advice Scotland reckons 70% of ESA appeals are successful, and appeals and tribunals cost money, as does the backpay when the appeal is successful. Of course, on paper it looks wonderful [for the Treasury], and pointing out the flaws in their calculations is starting to feel like flogging a dead horse.

    A sinister by-product of attempting to kick people off DLA is that in order to claim Carer’s Allowance, the person you are caring for needs to be getting middle or higher rate care for DLA, so if they lose their DLA you also lose your Carer’s Allowance (thus saving the government an extra £53.90 a week). I haven’t seen this mentioned anywhere, and it’s what has really made my blood boil.

    I voted Lib Dem, and yes I do feel betrayed. What a great experience for first-time voters.

  2. I would say “superb” but I feel too downhearted after reading that. Hope you’re well, despite all. Dx

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  4. cb says:

    The DLA thing makes me so angry because it makes no sense – there isn’t as much fraud as some of the tabloids would have us believe – I would search for the figures but it’s too early but the research IS there to prove that – and it seems to me to be a way of stigmatising people with disabilities and promoting the ‘daily mail’ view of scroungers which is desperately unfair.

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  6. frances says:

    I heard Danny Alexander saying this morning that the same ‘test’ would be used as for ESA. That is the WCA which is a completely meaningless confidence trick. It isn’t a’test’ – it is a garbage in / garbage out computer program developed by the American private health insurers to reject claims. It was developed purely to throw 1 million people off IB/ESA.

    The Disability Lobby has to get together and fight this. The fight over ESA was pathetic. Can we do better this time.

  7. Pandora says:

    I heard Danny Alexander saying this morning that the same ‘test’ would be used as for ESA.

    Oh bloody hell. We’re all screwed then.

  8. aethelreadtheunread says:

    Thanks for the comments.

    J Wibble – Sorry your comment didn’t appear straight away, the spam filter got excited because of the hyperlinks. :o)

    The reduce dependency and promote work seems to be the official government line on the whole package of welfare reform – at any rate, it was included in Huw Edwards script on the 10 O’Clock News last night as well. In terms of the other changes it’s somewhat asinine, because it’s based on the assumption that people who are unemployed can find a job if they want to, even though figures from the same budget show that the government expects there to only be work for between 92-94% of the ready-and-able-to-work population over the next few years. In terms of DLA, though, it’s actively disingenuous, for the reasons you point out.

    You make good points about the likelihood of appeals, many of them likely succesful, and the hidden impact of the removal of Carer’s Allowance. Presumably the people who lose CA – even if they only lose it temporarily while the disabled person they care for appeals against the decision to refuse or downgrade their DLA – will have to go on to JSA which, assuming the carer is 25+, will actually pay more than CA. So the government policy is to introduce an uneccessary extra tier of bureacracy that will produce bad decisions that will predominantly be overturned after an expensive appeal process and in the meantime they’ll be shelling out more to the carers they’ve been exploiting. It’s really hard to see how this can save money, isn’t it?

    Please don’t let your experiences this time around put you off voting for good – the regressive forces rely on the fact that progressives get demoralised. And, hey, you never know, backbench MPs may revolt over what their leadership have signed them up to – at least one was prepared to go on camera within hours to say that he was ‘unhappy’ with the VAT increase, and he will only have done that if he knows that he backing from at least some colleagues.

    abysmal musings – sorry for downheartening you – not my intention, needless to say. And yes, i’m doing ok, thanks, i hope you are too. :o)

    cb – I think you’re absolutely spot on in your assesment about the changes to DLA being designed to appeal to a reactionary mindset. Sadly, a lot of those people are actually responding to nonsense like “people on DLA get a brand-new car every year” rather than the realities of the situation. This is where papers like the Mail, Express etc are so damaging – by endlessly presenting and re-presenting the worst abuses of the system as though they were typical, they end up skewing the whole public perception. Not that the readers of those papers get off scot-free – many of them would, i’m sure, want to donate money to help disabled children, and a very few seconds thought would reveal that disabled children must grow up to be disabled adults, and therefore they can’t all be chancers.

    I’m in full agreement with what you say in your post, too, by the way. :o)

    frances and Pandora – I hope you don’t mind me responding to you together. :o)

    Those comments by Danny Alexander suggest the policy is even more confused than i thought it was. As frances says, the WCA is hugely unimpressive, and as the CAB Scotland press release J Wibble links to above makes clear, most of the decisions to withhold benefit are being overturned on appeal. But, as i understand it, the criteria for getting ESA are considerably looser than the criteria for getting DLA, so if they do use the WCA for DLA then everyone who currently qualifies for DLA will be guaranteed to still qualify, making it a literally pointless change. And that’s to ignore the fact that a sizeable proportion of DLA claimants will also be claiming ESA, and so will have already been through the WCA – can they really be intending to duplicate effort like that?

    In terms of the campaign against DLA, well, i’m not directly affected and don’t know much about it because i don’t claim it, but i’d be very happy to support the campaign. :o)

  9. Josie says:

    The DLA part really upsets me. I’m in the middle of appealing my ESA decision after my medical assessment. I was deemed completely fit for work even though my consultant psych, GP and CPN all said i wasn’t fit for work. The medical assessment surely is a waste of money if the patients own doctors (who know the patient the best) can declare the person unfit for work! I am sure that the DLA changes will have the same problem – it won’t save money (due to the cost of the assessments and the appeals), apart from the people who are just too ill to deal with the hassle!

  10. aethelreadtheunread says:

    Hi Josie, and thanks for commenting.

    I think you’re probably spot-on with regards to the policy probably, in the long run, costing money rather than saving it. And you’re also exactly right about the ridiculousness of having the doctors and nurses who know the most about a patient’s state of health being over-ruled by someone who meets with them only briefly, and is just looking for a pretext to deny the claim. It’s ridiculous and expensive too, of course, because it’s precisely these cases that end up being overturne after an expensive appeal process.

    Good luck with your appeal! :o)

  11. Adair says:

    Good post, suck situation. I’m glad bloggers like you are calling them on it. ^_^

    Well, until you got to the point of repeating anti-pig prejudice. Pigs are intelligent and sociable animals–like all animals, they can do bad things, but they certainly don’t deserve to be compared to the most despicable of human beings. They’re also far more vulnerable members of human society than even the human poor, who at least aren’t routinely held in abusive captivity, bred, and slaughtered for the economic benefit of corporations, all while the public glorifies this behavior as producing “tasty bacon”.

  12. aethelreadtheunread says:

    Hi Adair, and thanks for commenting. I’m sorry if i annoyed or upset you.

    I don’t know how familiar you are with Animal Farm, but it’s an allegory of events in the Soviet Union set on a farm. The novel has ‘good’ pigs (Old Major, Snowball, the Young Pigs) who are based on the original communist idealists, and bad pigs (Napoleon and Squealer) who represent Stalin and his hangers on. In the plot of the novel – as in the real events it allegorises – the good pigs are killed or otherwise silenced by the bad pigs. The sentence i quoted is the last of the book, and describes how the pigs who were initially part of an all-animals-together revolution against the cruel human masters of the farm have become just as bad as the humans they replaced, and now mingle with on an equal footing. In other words, what makes the pigs bad is that they have become like humans rather than being faithful to their better animal nature.

    When i used the quote i wasn’t using the word pig in the sense of taking negative human qualities and ascribing them to an animal. I was adopting and adapting the allegory of the novel, and making the point that Nick Clegg – leader of a party that we all thought was committed to social justice – has become more or less indistinguishable from the Conservatives, and has reduced his party’s commitment to justice and fairness to empty rhetoric, just as the bad pigs did in Animal Farm. [And set out so baldly it’s demonstrably an unfair claim – Clegg is not Stalin.]

    For what it’s worth, i can’t exactly claim moral high ground, since i do eat bacon and other pig-derived meats, but i do make sure that – as with all meat i buy – the pork and bacon i eat has been ethically farmed. In the case of pigs that means that they have been reared outdoors rather than in pens where they don’t have enough space to turn round, and are given free rein to socialise and interact in the way that is natural for them. I was a country boy for the first 19 years of my life, and got to see some of the wanton cruelty of factory farming first hand – i lived just a couple of miles from a pig abattoir, in fact – so i do try to avoid it.

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