The number of children in poverty is rocketing. Who is protecting them?

It’s telling that those zealots who want to defend the ‘unborn child’ are complicit in policies that impoverish women and children

Child on council estate
 ‘Avoiding this hypocritical ‘concern for children’ does not require a complex position: a civilised society would give women the choice not to continue with a pregnancy and in turn support a child’s wellbeing if they are born.’ 

One of the most remarkable things that came out of the Irish referendum was the personal testimony of women who had been forced to journey to England for medical care. But some – poor or migrant or disabled women – recounted how even this option wasn’t available to them; unable to travel, they had no choice but to take the gamble of a pill bought from the internet. It’s a striking insight into the black-and-white thinking imposed on pregnancy: women who could not even afford a flight on Ryanair for a safe abortion were somehow expected to be able to afford to feed, house and clothe a child.

Beyond Ireland, this denial of the material reality of raising a child is an ongoing issue – in abortion debates and beyond. Indeed, the same voices so ardently protecting the “unborn child” are often strangely quiet when it comes to support for children once they are outside the womb. This convenient cognitive dissonance has long been a feature of rightwing attitudes: arguing to restrict a woman’s reproductive rights while supporting measures that push children into poverty. (Some British rightwing – often male – journalists couldn’t resist stepping in over the Irish debate too.)

Avoiding this hypocritical “concern for children” does not require a particularly complex position: a civilised society would give women the choice not to continue with a pregnancy and in turn support a child’s wellbeing if they are born. And yet it is a concept with which many still seem to struggle, including our own government. The Conservatives have long positioned themselves as the party of family – from cruel so-called protection of the “traditional family” such as the anti-LGBT Section 28, 30 years old this month, to David Cameron’s pledge to use the family to solve social problems, and 2017’s backbench Manifesto to Strengthen the Family, pitched as Theresa May’s key social narrative.

At the same time, their small-state ideology can make it devastatingly difficult for a low-income parent to look after a child. Look at the controversial “two-child” limit to child tax credits under universal credit (UC). From its inception, it was predicted the policy would lead to hundreds of thousands of additional children living in poverty, but it’s now emerging that some women are even feeling forced to have abortions because they can’t afford to go ahead with the pregnancy. “It wasn’t planned but it was very much wanted. I was crying as they wheeled me in,” one woman told the Mirror this month about her abortion; without the safety net of tax credits, she had no way to afford another baby. Women in Northern Ireland in similar positions have an even more restricted choice: the rape-exemption clause that gives some women on UC a financial reprieve endangers women who haven’t reported their attack to the police (in Northern Ireland, failure to report a crime is an offence) and, as the renewed calls for reproductive rightsin light of the Irish vote has highlighted, Northern Irish women have no legal access to abortion in their own country if they feel they can’t raise a child.

Recent years have in fact seen a determined removal of support from low-income mothers – everything from forcing single parents (90% of whom are women) to look for work once their child turns three or have their benefits sanctioned, to the benefit cap, a policy so regressive it was actually ruled to be unlawful when forced on single parents with toddlers.

Just this week, it came out that a third of low-income families are missing out on state-funded free food vouchers – a scheme designed to help pregnant women and those with young children afford fruit, vegetables and milk.

Much like Sure Start and child tax credits, these vouchers were brought in by a Labour government to reduce inequalities between wealthy and poor children, based on the understanding that if it takes a village to raise a child, it often requires a government to ensure they don’t live in poverty. It’s no coincidence that, as the welfare state has been pulled back, the number of children in poverty is rocketing to record levels.

In the post-crash austerity era, this sense of social solidarity towards children has noticeably lessened. Under each policy to remove state support from parents there’s a lurking narrative that working-class women are “breeding too much” or that low-income children are drains on the “hardworking taxpayer”. (“Why should I pay for someone else to have more kids?” is the rejoinder on most articles advocating child benefits). In the real world, pregnancy is rarely predictable – contraception fails, relationships end, and jobs are lost – and besides, even the most ardent individualist would admit low-income children have done nothing to “deserve” their own poverty.

We are at the point in which it is not rare to hear of infants living in B&Bssleeping on cardboard, or even scrambling for food in school bins. If the ongoing debate over abortion rights teaches us anything, it’s that there are no shortage of voices content to defend the “unborn”. It’s a shame few are willing to give the same care to those children who are already here. HEAR HEAR!!!

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DWP spend £200 MILLION fighting to deny disabled people vital benefits

Labour MP Jack Dromey said the shocking revelation “exposed just how cruel Tory treatment of the vulnerable can be”.

The Department for Work and Pensions (DWP) has splashed out nearly £200 million in a heartless bid to deny sick and disabled people the benefits they desperately need, according to the Mirror.

Figures obtained by the Mirror through a Freedom of Information request reveal the DWP spent an estimated £199 million contesting Personal Independence Payment (PIP) and Employment and Support Allowance appeals.

Official figures show that more than 400,000 sick and disabled people have successfully appealed PIP and ESA decisions since 2013. Around 69% of PIP decisions were overturned at tribunal between October to December 2017 alone.

Appeals consist on two stages, beginning with Mandatory Reconsiderations (MR) followed by an independent tribunal if a claimant doesn’t agree with the first stage of appeal.

The Mirror reports the DWP has spent an estimated £50.7m for ESA and £43.4m for PIP over five years. The Department also spent and estimated £58.7m for ESA and £46.2m for PIP appeals.

Campaigners storm parliament in protest against government disability policies.

The true cost, however, is likely to be much higher because it doesn’t include the cost of tribunal hearings themselves, which are paid for by the Ministry of Justice (MoJ). The Mirror reports that the MoJ spent £103.1m on social security and child support tribunals in 2016/17 alone, with four out of five of these tribunal hearings being for PIP or ESA.

Shadow DWP minister Jack Dromey MP said the shocking revelation “exposed just how cruel Tory treatment of the vulnerable can be”.

“Hard-hearted Ian Duncan Smith and Esther McVey have wasted nearly £200million on denying desperately needed support for the sick and disabled”, he said.

“Claimants, sometimes dying, have had to wait for up to a year for their appeals to be heard. And to add insult to injury 7 out of 10 win on appeal”.

Labour MP Frank Field, chairman of the Commons Work and Pensions Committee, told the Mirror: “The Department is spending mega sums of money defending its own poor decision making, and putting claimants through the wringer in the process.

“DWP is already planning substantial improvements to the assessment processes, including recording assessments. But it must push harder and demand better from its assessors. It simply cannot afford not to.”

Disabled people protest against the closure of the Independent Living Fund (2014).

A spokesperson from the disability charity Scope called on the Government “to urgently overhaul both the PIP and ESA assessments so they work for disabled people”.

“Flawed assessments are leaving huge numbers of disabled people without the essential financial support they are entitled to”, the spokesperson said.

A DWP spokesperson said: “We’re committed to ensuring that disabled people get the support that they need, spending £50 billion a year supporting them and those with health conditions.

“A relatively small proportion of all decisions are overturned at appeal – 4% for both PIP and ESA.”

The statistics in full

Source: Mirror FOI request to the DWP. Figures relate to DWP direct operating costs only. See caveats in story above.

ESA Mandatory Reconsiderations

  • 2013/14 £3,126,636
  • 2014/15 £14,551,932
  • 2015/16 £9,692,386
  • 2016/17 £10,712,461
  • 2017/18 £12,590,885

PIP Mandatory Reconsiderations

  • 2013/14 £292,435
  • 2014/15 £3,882,822
  • 2015/16 £7,500,733
  • 2016/17 £13,900,013
  • 2017/18 £17,847,514

ESA appeal tribunals

  • 2013/14 £27,413,965
  • 2014/15 £7,458,654
  • 2015/16 £5,363,552
  • 2016/17 £6,664,243
  • 2017/18 £11,811,576

PIP appeal tribunals

  • 2013/14 £147,164
  • 2014/15 £2,799,971
  • 2015/16 £9,436,303
  • 2016/17 £13,687,088
  • 2017/18 £20,123,668

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Universal Credit discriminates against women by design

When I was a child my paternal grandmother had lived many years with a violent and feckless husband. Like the mother in Frank McCourt’s biography Angela’s Ashes there was nowhere for her to go or any help that she could get, to escape her terrible life, which is probably why she died in middle age, the stress got just too much for her and my father knew for a fact she refused to take her heart medication. How many women of today will have to suffer my grandmother’s fate? And there be no help. GN


Universal Credit punishes those who do not fit a 1950s stereotype

Woman pushes a baby

At a recent meeting on women and poverty, I was asked to speak about Universal Credit (UC). It forced me to think about how Universal Credit is hugely problematic for women, particularly mothers. Eventually I concluded it was a case of discrimination by design. Here’s how it goes.

Back in 2011, when the Bill introducing Universal Credit was published, we explained in detail how the policy was fundamentally flawed, and proposed amendments to fix it. Very little change was made. And since then it has actually got worse, with the 2015 Budget freezing the value of payments for a further four years and cutting work allowances (the amount people can earn before Universal Credit is tapered away). Those Budget cuts blew great holes in Universal Credit’s ability to support paid work and make people better-off in work. As Universal Credit rolls out, it is now rolling out cuts.

Tories slammed for ‘1950s’ risk of domestic abuse under Universal Credit

Women are disadvantaged in Universal Credit in a number of ways:

1. A return to the 1950s

Far from looking like a “modern” benefit, Universal Credit actually resembles a return to the 1950s family wage model. The claim that one payment into a household (rather than two payments split between two adults) is like real life – in a country where nearly 75 per cent of mothers are in paid work – is a complete nonsense.

In most families, there is money coming in from different sources: two wages, different benefits, wage subsidy, child benefit. Nor is this how couples get out of poverty – it takes at least one and a half paid workers to do this, if not two.

Domestic violence is given as one circumstance where benefits can be split between two adults in a household. But a woman being subjected to domestic violence would risk making herself more vulnerable if she drew attention to the violence by requesting split payments.

2. Second earners are ignored

There is no work allowance for second earners, who are mainly women, and, post budget cuts, a lower one for lone parents (90 per cent of whom are women). Universal Credit is a benefit that creates little or no incentive for second earners to enter or progress in paid work – this is clearly dysfunctional in this day and age.

3. It entrenches traditional divisions of labour

The insistence of UC on dividing a couple with children into a “main earner” and a “main carer” (or second earner) in the first place is problematic. Why can’t both men and women with children restrict their working hours and share the responsibility of caring for children? Two three-quarter time earners is surely better for everybody!

4. Younger women are penalised

Lone parents under the age of 25 receive a lower rate of benefit, unlike in the previous benefits system. How exactly are their responsibilities and costs any different to those of older mothers? And this group is doubly disadvantaged by a lower minimum wage rate for under-25s.

5. Childcare payments are out of sync with costs

The treatment of childcare and housing costs are the two greatest expenses faced by families. Help with childcare costs is generally paid at the end of the assessment period in which the care is received, yet mothers make upfront payments to providers and wait weeks for Universal Credit to reimburse them, which in turn causes them to fall into arrears on their rent and bills. And childcare costs do not always arise neatly, each month.

6. The benefit cap disproportionately affects women

Of households subject to the benefit cap, 93 per cent have children, 72 per cent are lone parents (76 per cent with children under five and 31 per cent with a child under two). The vast majority of these will be women. These claimants are sitting ducks because they have young children so face barriers to work, and can’t find affordable housing. Those with babies and toddlers are not required to look for work in the benefits system, yet they are still hit by the cap. And the monthly assessment of Universal Credit entitlement is causing some workers to be benefit-capped because of the day in the month they are being paid.

7. The rape clause forces women to relive trauma

The two-child policy limits child allowances in Universal Credit to two children, with an exemption when a child is conceived through rape. Immoral and impracticable, the policy fails on every count. Not only is it administratively difficult, but it counts some children as being worth less than others, and interferes in those most personal and precious decisions about life, fertility and family size.

Women applying for the exemption known as the rape clause risk more trauma and humiliation, because they must obtain a statement from an approved third party that their circumstances are consistent with such a conception.

8. Sanctions affect lone parents

Job centre staff can waive work-related requirements for lone parents – 90 per cent of whom are women – but the flexibility is contained in guidance and not regulations, so allowances are not always being made as required for lack of childcare, school hours, and other reasonable work restrictions. The rate of sanctioning of lone parents – usually mothers –  is, as a result, very high.

The sheer size of the losses for families with children (around £1,000 per year) and for lone parents (roughly £2,340 a year), due to cuts to Universal Credit, is astounding. There will be one million more children in poverty as a result – compared with what Universal Credit originally promised. It was meant to reduce child poverty, but now this promise lies in tatters.

But if we’re stuck with UC, what are the solutions? There are ways to make UC work better – splitting benefits automatically or on demand, a second earner work allowance, reinvesting in work allowances for lone parents, changing to weekly assessment and fortnightly payment, allowing averaging of costs, increasing rates for lone parents under 25, ensuring entitlement to and take-up of legacy benefits like jobseekers’ allowance, ending the freezes, abolishing the benefit cap and the two-child policy, ending fixed-length sanctions and the regime that imposes them too easily – affecting lone parents worse than anyone.

We could also consider not rolling it out to families with children, as it is currently not fit for purpose.

And, one thing they absolutely must not do is to roll up child benefit into Universal Credit. If anything, Universal Credit makes the case for reinvestment in child benefit all the more powerful. In CPAG’s experience in the last three years working in food banks in Tower Hamlets, destitute mothers arrive with one source of income – child benefit. They have it because it works. It is by way of a basic income for children.

Discrimination by design cannot go on: serious reform of Universal Credit is needed, right now.

Alison Garnham is the chief executive of Child Poverty Action Group. A longer version of this essay is available on the CPAG website.

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UK households face hidden debt of almost £19bn

Yesterday, I blogged about how a third of people on Universal Credit benefit are in work  and how No-fault evictions are making hundreds of families homeless each week and food poverty is getting worse by the day as workers are queuing up for free food because they can’t afford to eat and even with when there’s a death you get no peace because Figures show those eligible for DWP funeral assistance face an average debt of nearly £2,000 – that’s if they pay you anything at all! My best friend – a carer to her mother – was saddled with a £3,500 bill when her mother died and the DWP refused her funeral assistance. And don’t get me started on fuel poverty  I recently had to phone all the utilities companies for someone I know that had a long benefit delay and the lady on the phone at the water company said: ‘that’s all we are dealing with every day – benefit delays and non-payment of benefits’ [esp JSA/ESA sanctions]’ Since no one has any money [even those in work] a complete meltdown will happen soon and it begs the question: did the Tories plan this? Because no-one is that incompetent! GN


Someone worries over their bills

Citizens Advice claim UK households face hidden debt of almost £19bn and missed bill payments and benefit repayments overtake credit cards as number one key-money worry.

British households owe almost £19bn in utility bills, missed council tax payments and overpaid benefits, according to figures revealing a hidden debtmountain facing the country.

Putting an estimate on the overall amount owed by people falling behind on essential bills for the first time, the estimate from Citizens Advice comes as UK households are under increasing financial pressure. The charity said missed bill payments had overtaken credit card troubles as the key money problem faced by consumers.

The analysis comes as concerns grow about the rapid growth of personal borrowing on credit cards, loans and overdrafts in the UK resulting in levels unseen since the financial crisis. While the Bank of England is responsible for tracking the rise in borrowing from high street banks, there are no official figures for missed bill payments.

Figures from Threadneedle Street show consumer borrowing reached £213bn in June, rising much faster than workers’ pay. High levels of inflation since the Brexit vote have pushed up the cost of living in Britain and sluggish wage growth and government benefit cuts have added to the squeeze on households. Citizens Advice estimates the total value of missed bill payments has risen by 34% since 2010.

Calling on the government to face up to the scale of the problem, the charity said ministers should commit to measuring and reporting on the levels of household debt on an annual basis. It also called for tighter regulation of the bailiff industry to provide greater protections for people struggling with their bills.

New figures show that UK household debt balloons to £19bn as bailiff problems multiply

Gillian Guy, the chief executive of Citizens Advice, said: “There is an air of institutional indifference as far as household bill debts are concerned. The government must get a grip on the scale of this debt by accurately measuring and publishing the figure on an annual basis.”

From the overall debt pile it uncovered, the vast majority related to bills owed to the state. Households owed more than £10bn last year in tax credits and benefits where the government had overpaid them and then demanded repayment, while councils were owed almost £3bn in council tax arrears.

In one case, Citizens Advice said it had helped a retired couple who had fallen behind on some of their essential bills and owed £700 in council tax. It said they had become too afraid to open the front door after visits from bailiffs.

MPs on the Treasury committee said in July the debt collection practices of public authorities have often been described as the “worst in class”, with debts pursued overzealously and with routine recourse to bailiffs. Since 2014, Citizens Advice said it had seen problems with bailiffs increase by a quarter.

The charity found water companies were owed £2.2bn by consumers falling behind with their bills, while electricity and gas providers were owed almost £1.1bn.

While there are formal arrangements open to people falling behind with credit card and other debts owed to banks, overseen by the Financial Conduct Authority, there can be more severe consequences for people missing bill payments. Consumers can find themselves cut off by utility providers, evicted from their home because of rent arrears or jailed for missing council tax payments.

Household bill problems can have serious knock-on effects for mental healthor lead to additional borrowing. Citizens Advice said more than a third of people are likely to be out of full-time employment and that one in three people have problems with their mental health.

A spokesman for the Treasury said the government was helping households by cutting taxes and increasing the minimum wage. The government has committed to introducing a breathing space scheme for people struggling with problem debt.

“[This] will help those overwhelmed by debt by giving them the time they need to get their lives back on track,” the spokesman said.

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The government knew about horrific conditions at Birmingham prison

What little ministerial accountability there is appears to be focused on a handful of publicly run prisons. There is no plan.

Rory Stewart

The chief inspector of prisons’ shocking report on HMP Birmingham shows that our prison estate is out of the control of authorities. The report found that inmates used drink, drugs and violence systematically. Prison gangs perpetrating violence could do so “with near impunity”. Staff experienced widespread bullying. While the inspectors were on site they witnessed an arson attack on a car in a staff car park.

In December 2016, HMP Birmingham experienced the worst prison riot since 1990, when prisoners had control of Strangeways prison in Manchester for 25 days, one prisoner was killed, and 147 prison officers and 47 prisoners were injured. The Birmingham incident should have led both G4S, the contractor that has been running the prison, and the Ministry of Justice (MoJ), which has officials on site the whole time, to take special measures to ensure it was turned around. But it is now as bad as it has ever been and according to Peter Clarke, the chief inspector, the worst prison he has seen. This raises important issues about the effects of privatisation, but the loss of control spreads right across the prison estate, private or public. A Panorama programme about HMP Northumberland, which is run by Sodexo, another of the three private contractors running UK prisons, depicted another prison that is out of control. And in a report in January 2018, Clarke said HMP Liverpool, which is publicly run, had the worst conditions he had seen (now overtaken in that accolade by HMP Birmingham). The report showed violence against staff by inmates had tripled since the previous report in 2015.

There are three main causes: the courts sending many more violent prisoners to custody than previously; the pervasive effect of spice and other drugs in prison; and the deterioration of prisoner/prison officer ratios in private and public prisons alike.

Although the number of prisoners should be reduced, the government has an obligation to house those sent by the courts. But it has to address the other two factors with much greater vigour and immediacy.

First, to deal with the drugs it must spend proper money on a wholesale overhaul of prison security. Drug finds went up by 23% in the year to March 2018, compared with the previous year. A serious plan is required.

Second, staff ratios. The response of the government to the HMP Birmingham report is to reduce prison numbers, increase staff numbers, and change the leadership. All the correct moves. But dealing only with Birmingham isn’t enough. Before the riot in Birmingham in December 2016, 2,500 extra prison officers were promised, and were engaged across the estate before the deterioration during 2017 and 2018. And Birmingham got worse.

Talk of prison reform is pie in the sky until control is restored. But control will not be restored unless there is a properly funded plan to increase security and staff numbers. That HMP Birmingham was privately run has probably made the situation worse. In addition to the contractual sums paid to G4S, the state had the monitoring costs, and contracts are intended to give a return to the contractor of 5% to 8%, which would otherwise be available for direct expenditure on prisons.

Stewart, when asked why the government had not acted sooner, cited commercial negotiations with G4S as one of the reasons for the delay in taking the emergency measures that have now been announced. The reluctance on the part of the government to act over a much longer period would in part have been because it was a private prison.

Ministerial accountability for the conditions in prisons appears to be focused on publicly run prisons. Yet, prison conditions whether public or private are the responsibility of the state. The government cannot duck its responsibility by outsourcing.

Surely the government must now finally act to address the prisons crisis. But it was fully aware of the collapse of control in Birmingham and yet did nothing. I am not hopeful.

 Charles Falconer is a former lord chancellor and justice secretary

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It’ll take more than shopping to save our debt-addled economy

Britain’s growth model is unsustainable, and has created scandalous levels of inequality – we should rely more on production, not consumption

Illustration by Eva Bee

The British growth model is well and truly broken. If any more evidence for this was needed, it came from figures last month showing that households had become net borrowers for the first time since records began in 1987. They took out almost £80bn in loans last year, the highest amount in 10 years. Only £37bn was deposited in banks. This has echoes of the pre-2008 boom period, and we all know how that ended.

The Office for National Statistics also reported that reliance on short-term unsecured loans, such as credit cards and payday loans, had exceeded £200bn: a record high. Nine out of 10 new car purchases are made using hire purchase or some kind of similar arrangement. Rather than serve as a corrective, the financial crisis and its aftermath has just reaffirmed that we remain addicted to this debt-fuelled route to growth.

The British sociologist Colin Crouch has dubbed this “privatised Keynesianism”. Whereas traditional Keynesian economics relied on government spending to boost aggregate demand, privatised Keynesianism relies on household expenditure instead.

But because we are living in an era of historically low levels of wage growth (it dropped again last week), the only way to finance this expenditure is through rising debt. This sort of growth model conjures up images of frenetic shoppers, multiple bags in hand, rushing from Primark to Topshop and back again, putting everything they buy on the credit card.

Framed in this way, Britain’s middle classes can distance themselves from what they perceive as crass consumerism. But in reality, we are all a part of it. The middle classes have led the way with their reliance on mortgages, while those on lower incomes resort to credit cards and payday loans.

When house prices rise far in excess of earnings, home ownership has powerful wealth effects for those on the property ladder. Borrowing on the back of these rising house prices fuels further rounds of consumption. The government has cracked down in recent years on the buy-to-let market, but years of easy credit in the 2000s, coupled with the financial deregulation of the 1980s and 1990s, made this kind of investment a pillar of the UK economy. If you want a summary of Britain’s political economy of the past 30 years, look no further than the BBC’s Homes Under the Hammer programme.

Those who bought their houses when average earnings still had some connection to house prices have done handsomely out of this, but it has been a raw deal for everyone else. Of the £2.7tn increase in wealth since 2007, two-thirds has accrued to the over-65s in the form of housing- and pension-related gains. In stark contrast, 16- to 34-year-olds have seen their wealth decline by 10% over the same period.

Privatised Keynesianism has always been an unsustainable way of organising our economy. It is, as the German economist Wolfgang Streeck put it, just a way of “buying time”. Now this kind of growth regime has entered its morbid phase. The inequalities it generates have become so brazen that few can pretend not to notice them. In the decade since the crisis, restrictions on lending have locked in the gains of privatised Keynesianism for baby boomers and those lucky millennials able to draw on the Bank of Mum and Dad. The rest of the younger generation have been shut out. High levels of personal debt are pushing up levels of stress, anxiety and resentment.

This broken model has reshaped Britain. We are a nation of consumers, not producers, which is reflected in our systematic deficit in the balance of payments. The UK has not had a trade surplus since 1998. Large chunks of our service sector economy are oriented towards administering to the needs of those enjoying the benefits of an overvalued housing market. Consumption-driven growth sustains high demand for services that rely on relatively low-skilled labour, including the fast-expanding “gig economy”. This has changed the shape of our labour market, hollowing out middle-level skills and widening the gap between the high- and low-skilled. We have created a new precariat to serve the needs of the asset-rich.

Black Friday sales in London
 ‘Consumption-driven growth sustains demand for services that rely on unskilled labour.
Our debt-fuelled growth model has also changed the political and social geography of the UK. We no longer have a national economy as such. High-quality manufacturing jobs – once concentrated in the north and the Midlands – have given way to low-skilled service sector work, in distribution warehouses, supermarkets and call centres. The high-skilled service sector jobs tend to be concentrated in London and the south-east. The government’s industrial strategy celebrates hubs of innovation such as Silicon Fen in Cambridge. It has nothing to say about what the Labour MP Rachel Reeves calls the everyday economy.

If the model’s broken, what’s the alternative? The UK needs to rebalance its growth, relying less on consumption and more on production. The financial sector is not as big as many think, but it weighs on the British economy in a modern version of Dutch disease: the regular inflows of foreign capital simply enable our dependence on asset bubbles rather than rising wages as a route to prosperity. They strengthen the pound, making it ever harder to achieve the increasing levels of exports needed to sustain a different growth model.

We also need to raise dramatically the skill levels and the status of many jobs in the service sector. It is a national scandal that those who look after our loved ones – our children and our older relatives – are paid so little, and given so little attention in our national economic strategies.

But transforming Britain’s economy requires something even more fundamental: we need an entirely new social settlement. One of the biggest ideological achievements of Thatcherism was the destruction of the idea of society embodying the common interest. And without a sense of the social, we cannot hope to make any real changes in our economic model. Weaning Britain’s middle classes off their reliance on property will generate enormous amounts of resistance from all those – from landlords to solicitors – who have a vested interest in preserving the status quo. That can only be overcome by appealing to the common good.

The US historian Christopher Lasch once wrote that a properly democratic society should not aim to create a framework for competition where the most able succeed and the others fail. Instead, it should aim to raise the general competence of society as a whole. This should be our aim once again. To achieve it, we must regain a sense of what society means.

 Chris Bickerton teaches politics at Cambridge University. This article is based on a longer essay available here

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2018: the year the failure of privatisation and austerity became undisguisable

The state takeover of Birmingham prison adds to a catalogue of private sector chaos: Carillion, East Coast, Northern Rail and bankrupt Northamptonshire council.

Image result for IMAGES OF GRENFELL AUSTERITY
*Image twitter

For nearly a decade, the Conservatives’ combination of austerity and privatisation has enfeebled Britain’s public realm. The failures of this approach have long been obvious (as the New Statesman’s Crumbling Britain series has charted) – but 2018 is the year they became undisguisable.

The Ministry of Justice has today taken emergency control of Birmingham prison – the first publicly-run prison to be privatised – from contractor G4S, after an inspection found chronic levels of violence and drug-use among prisoners, and corridors littered with cockroaches, blood and vomit. After cuts of more than 30 per cent to the Ministry of Justice budget since 2010, the UK’s prison system has long struggled to manage, with a near-record population of 82,949 in England and Wales alone.

The events in Birmingham fit an unmistakable pattern: private failure, public rescue. In January, construction behemoth Carillion – which provided 11,500 hospital beds, 32,000 school meals and employed 20,000 UK workers – collapsed at a cost of at least £148m to the taxpayer.

In May, for the third time since rail privatisation, the East Coast Mainline was renationalised by the government after its private operators Virgin and Stagecoach defaulted on payments (costing the state an estimated £2bn in lost revenue).

The state of Britain’s railways is now a source of national shame. For too many commuters, the mere act of travelling to work is now an arduous odyssey characterised by repeated delays, cancellations and overcrowding. Northern Rail, one of the worst offenders, eventually cut more than 9,000 services from its timetable after daily chaos. On Southern, as many as 267 passengers have crammed into carriages designed for 107 people. And yet far from commuters being compensated, rail fares – already among the most expensive in Europe – are due to rise by another 3.2 per cent in January (having increased by an average of 32 per cent since 2010).

Meanwhile, Conservative-run Northamptonshire county council –once a Tory flagship – has been forced to declare effective bankruptcy and will now only provide a legal minimum of service (described by one observer as “a people-not-dying level”)  including potential cuts to child protection. Up to 15 councils, according to the National Audit Office, are also at risk of insolvency (real-terms funding for local authorities has been cut by 49 per cent since the Conservatives entered office in 2010).

In every corner of the state, the cost of austerity is marked. Rough sleeping, which fell by three-quarters under the last Labour government, has risen by 169 per cent since 2010. The NHS has been forced to cancel operations and even urgent surgery as it struggles to meet ever greater demand. Relative child poverty has increased for three consecutive years and now stands at 4.1 million, or 30 per cent of children. Nearly 1,000 Sure Start children’s centres and 478 libraries are estimated to have closed since 2010. Potholed roads and uncollected bins are evidence of the scale of austerity borne by councils.

But the surprise is that anybody should be surprised. From the onset of austerity in 2010, critics warned that it would inflict irrevocable harm without achieving the aim of eliminating the deficit. The government’s dogmatic commitment to privatisation – foreign state firms have taken ownership of British rail franchises – has long put ideology before evidence.

For Britain, the sixth largest economy in the world, with its own currency and low borrowing costs, austerity has always been a choice, rather than a necessity. National governments have a duty to manage the public finances responsibly. But as economic evidence shows, the best long-term means of debt reduction is productive investment, not politically-driven cuts. Government borrowing, it is said, will “burden” younger generations. Yet austerity has enfeebled the collective institutions that they depend on and that their forebears strove to build.

In these circumstances, unsurprisingly, public appetite for alternatives is growing. A poll published last year by the Legatum Institute and Populus found the majority of Brits favour public ownership of the UK’s water (83 per cent), electricity (77 per cent), gas (77 per cent) and railways (76 per cent) – as proposed by Labour. Voters are weary of the substandard service and excessive prices that characterise many firms. Indeed – let it not be forgotten – the pretext for austerity was a financial crisis that originated in the private sector. Now, as then, the state – long disparaged by economic liberals – is being forced to intervene to save the market from itself.

Britain’s economic and social divisions are the root of its political polarisation. The Brexit vote was not merely an expression of antipathy towards the EU but a symptom of far greater discontent. Should the Conservatives continue to preside over a new era of private affluence and public squalor, the UK will become a yet more troubled and divided country.

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Major mortgage benefit axed by the Tories – and 60,000 people have been left in the lurch

More than half of people on Support for Mortgage Interest have turned down a new loan – leading to fears they’re “in danger of losing their homes”

More than 60,000 desperate people have been left in the lurch after Tory ministers axed a major mortgage benefit. The figures have led to claims vulnerable people are “in danger of losing their homes” after Support for Mortgage Interest was scrapped.

Just over 100,000 people were affected when SMI, worth around £140 a month, was ended and replaced with a loan on April 6. Now official figures show 61,000 people so far – more than half those who previously received the benefit – have turned down the offer of a repayable loan. Just 21,000 have accepted it.

That means tens of thousands of cash-strapped claimants, around half of whom are pensioners, will have to carry on paying their mortgages without the vital lifeline. Lib Dem welfare spokesman Stephen Lloyd now plans to write to Tory welfare chief Esther McVey demanding she study why so many are rejecting the loan.

More than half of people on Support for Mortgage Interest have turned down a new loan – leading to fears they’re “in danger of losing their homes”

When the change was introduced, some claimants told the Mirror they were frightened of running up a fresh debt – and one told us he was selling his home.

Mr Lloyd said: “I’m very concerned at these figures, not least as the DWP appear not to have audited the reasons why so many people, often vulnerable people, have turned down the offer of a loan.

“I shall be writing immediately to the Secretary of State, Esther McVey, demanding she implement research immediately into why loans are being rejected. “Without this I fear some genuinely at-risk people could be in danger of losing their homes.”

Age UK charity director Caroline Abrahams told the Mirror: “It is very worrying that so many who were eligible have not taken up the loan. “We know that some older people were anxious about losing this benefit & put off by the idea of borrowing money instead.

“We are concerned that some will fall behind with their mortgage payments while others will struggle to balance their books after a reduction in their monthly income.” UK Finance, which represents mortgage lenders, said the acceptance rate of the loan was “disappointing” – and warned arrears could “creep up” after interest rates rose to 0.75%.

“Lenders will continue to help borrowers resolve any financial difficulty if possible,” a spokesman said. “Customers should contact their lender as soon as possible if they anticipate any payment problems. “Lenders will also continue to work with customers to see if there are other options available if they don’t want to take out a loan.”

SMI was paid since the 1980s to people who fall onto benefits, almost half of them pensioners, to stop their homes being repossessed. But now claimants will be given SMI in the form of a loan which runs parallel to their mortgage – and is repayable in full, with interest, when they die or sell up. Latest figures show 2,000 claimants had still not been contacted for a phone consultation by outsourcing giant Serco about the benefit.

SMI was paid since the 1980s to people who fall onto benefits, almost half of them pensioners, to stop their homes being repossessed 

A further 13,000 had “contact attempted” and 8,000 were successfully contacted, but still haven’t decided whether to take up the loan. Labour and the Lib Dems have repeatedly attacked the shake-up as “cack-handed” and a “chaotic failure”, while Age UK has warned older people are “really anxious”.

The Department for Work and Pensions (DWP) has insisted vulnerable and undecided people continue to get the benefit in a transition period. A spokesman said when we previously reported on SMI: ” Over time, someone’s house is likely to increase in value, so it’s reasonable that anyone who has received financial help towards their mortgage should be asked to pay that back.

“Everyone who signs up to the loan will continue to get help with their mortgage interest, and it’s only repayable if there is available equity when the property is sold.

“If people decide to decline the loan now but change their mind in future the loan can be backdated so in effect there would be no break in payments.”

What is this benefit?

Support for Mortgage Interest (SMI) was a benefit for people who fell on hard times and were struggling to keep up their mortgage payments. It existed in some form since at least the 1980s and was being paid to just over 100,000 people.

To qualify you had to be on one of these benefits: Income Support, Pension Credit, income-based jobseekers’ allowance or income-based disability benefit ESA. The benefit could only cover interest charged by a bank, not the capital value of a house. It was paid up to a total of £200,000, or £100,000 for pensioners.

What’s changed?

The free benefit has been turned into a repayable loan since 6 April 2018, a cut of £150million a year. That means if you accept help, you’ll have two loans secured on your home at the same time. One from the bank, one from the government.

As you grow older, the amount you owe the government will get bigger and bigger. That’s because the interest on the government loan will be set at the ‘forecast gilt rate’ – last summer it sat at 1.7%, but was expected to rise. The big difference between the government loan and a mortgage is this: the government’s loan won’t have to be repaid each month.

Instead the full amount is only due as soon as you die, sell your house or transfer ownership of it to a relative or friend. The exception is if you die and have a husband or wife or civil partner. In that case, the loan only has to be paid back after they die too.

There are transitional protections in place for people who haven’t yet made a decision about their SMI.

Have you had experience of coming off Support For Mortgage Interest? Contact us using the form below

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