The effects of the Government s unfair financial changes on many in society

Transcription

1 The effects of the Government s unfair financial changes on many in society Over the past few months, a number of changes have been implemented following the Government s decision that Britain s debts need to be reduced. It is reassuring that some of these changes, e.g in Education and Health, do not have such a direct impact here in Wales, as powers in these particular fields have been devolved to the Senedd. These notes are not an attempt to discuss the need for cuts, but rather to show that a number of these changes have a deeper and more unfair impact on those in our society who are not in a position to do much to avoid their effects. The situation is not exactly the same in every area of course and we know that some local authorities have suffered much deeper cuts than other councils, and it appears that this has happened for political reasons rather than any measure of the need for cuts as such. For convenience s sake, the changes are not listed in any particular order. I hope they will be a starting point for the Presbytery s Church and Society sub-committee to discuss the situation and to recommend that the Presbytery express a view that the changes are having an unfair impact on many in our society. 1. Increase in VAT (Value Added Tax): VAT has increased from 17.5% to 20%, which has a disproportionate effect on people on low wages, the unemployed and those without savings but who have to meet heavy financial demands: one-parent families etc. Usually, these people s financial demands for food, children s clothes, fuel bills to keep warm etc. are above average, and they are therefore disproportionately hit by the increase in VAT. It is believed that the increase in VAT costs an extra 450 per annum on average. 2. Inflation: the effects of inflation have a heavier impact unless one has means of meeting the increased costs. 3. Benefit Cuts: some examples: i) new mothers will lose around 500, and babies who are born this year will lose 1,780 in the first year; ii) pensioners will lose 100 a year with the new cold weather payments ; iii) there will be less money for the disabled (Disabled Living Allowance), including reductions in the mobility allowance for people in care homes; iv) Child Benefit will be frozen individuals will lose out in face of the increase in inflation and increasing costs as children grow older. 4. Cuts in local authorities budgets: councils face substantial cuts in the money distributed to them and this will mean that some of them at least will have to reduce expenditure on, for example: i) libraries and similar services, ii) leisure centres, iii) free school meals, iv) money to buy clothes for children from poor families; v) Childrens Services; vi) Housing Benefit: a reduction in the sums that can be paid. There is reason to believe that many will fail to pay for their homes and will then lose their homes, thus becoming homeless;

2 vii) Domestic Violence: because of the cuts, Women s Aid estimate that 70,000 women and children could be without any support facing violence in their homes; viii) A cut of 50% in the money available for affordable homes: this will have a heavier impact on unemployed people than those with financial resources; ix) Local Authorities will have less money to spend on care homes: which will mean that many will have to shut and others will have to charge more for their services a difficult situation for individuals without resources; x) A cut in the number of Public Sector workers- this will lead to the loss of thousands of jobs with not much hope that the Private Sector will be able to create enough jobs to replace those which have been lost. 5. A cut of 23% in the funding for the Ministry of Justice: i) a number of courts will close which will mean that many will have to travel further, without any travel costs provided. No consideration is given to the difficulty of travelling without a car, especially in rural areas; ii) there will be a reduction in the money available to an organization such as CAB (Citiziens Advice Bureau) and this is equally the case with money provided from Westminster and money provided from the county councils; this will mean that people without the means to pay for a solicitor, will be unable to receive the opinion or support of a solicitor or other specialist in the field. 6. A Change in Health Tests and the Ability to Work Standard: the tests for receiving the Disability Living Allowance have been tightened, and it appears an attempt has been made to significantly reduce the number of those who are eligible. If attempts to show that a person is unable to work fail, or if he/she fails to meet with the assessment unit, it is likely that benefits will be lost for four or five months. The individual will then have to submit an application for hardship money 39 per week, which is all he/she is entitled to. To make things worse, it has now been acknowledged that targets have been set for some officers within the Jobcentre Plus Department, whereby they will need to cut a specific percentage of benefit payments from those interviewed. Unfortunately, this will impact more heavily on individuals who have mental health or psychological problems and those whose symptoms can be much worse on some days. These are the very people who are less able to fight their case effectively. It is yet another example of the weak suffering more than the strong. The Treasury estimates that poorer families will be around 4% worse off in disposable income, whilst the richer families will only lose around 5% of this income. All in all, it is clearly the case that the cuts will have a much greater impact on people who depend upon public services. Usually, these people find it very difficult to make ends meet as regards maintaining a home, feeding and clothing their children, meeting transport costs and searching for jobs if they are unemployed. This of course is also true for pensioners if they do not have money in savings, and are therefore completely dependent on money provided by means of benefits. To conclude, a number of these cuts have only just been implemented, and however things have been up to now, it is hard to imagine that we will see a turn for the better over the remainder of the current government s period in office. Geraint Francis Roberts

3 Update 1 The Children s Minister said the proposed cuts are likely to lead to a reduction of almost 3,500 a year in the benefits of a parent with a disabled child. Scope estimates that around 9 billion of the 90 billion proposed cuts will fall upon the disabled, making them the ones who are heaviest hit. Over 42,000 will be impacted by the changes. It is understood that some 600 mothers a week are leaving work since they cannot afford to pay for care for their children 32,000 last year, according to the Day Care Trust. According to the Children s Society, the changes mean a cut which equates to 20% of family income after paying housing costs. It is warned that 80,000 will find themselves homeless if the housing benefit threshold is not raised, and 200,000 will be pushed into poverty. The Housing Minister s opinion is that the cuts will pile costs on to the Health Service and Social Services. Before the election, 3,000 additional midwives were promised but there is no sign of them, and 8,000 nurses are to lose their jobs. There is also talk of closing around one-third of police stations. A 39% cut in Legal Aid money is likely to restrict opportunites for justice by closing the door to the law for everyone but the rich. The Justice Minister suggests that the impact of the cuts will be cushioned by women who are solicitors and home over a period of maternity leave! Geraint Francis Roberts,

4 Update 2 As another budget is to be announced within the next few days, it is likely that a number of changes will be introduced, but the general pattern is unlikely to improve for many people. We must also bear in mind that the situation in Wales is not always the same as in England, as some responsibilities such as education and health are now in the hands of the Welsh Government rather than Westminster. The same also applies to the money shared out between Wales local authorities, but of course, the cuts in various benefits have just as much effect in Wales as in England. I do not intend to repeat what was said in the previous two documents and I will attempt to focus solely on the situation as it appears right now 1. Almost a year has gone by since preparing the original notes, but a number of the cuts will not be implemented until April Looking at the Public Sector, only around 6% of the cuts have started so 94% are yet to come, and it is understood that over 700,000 civil servants will lose their jobs. It is surprising that 12,000 workers from the tax collection units are to lose their jobs, whilst 25 billion is evaded and around 70 billion avoided. The effects will soon become evident and will shock many who have not understood or appreciated the situation. 2. From April onwards the cut in tax credits will take 305 a year from around 2 million homes, and half of the poorest sections in our society already have around 427 a year less to spend. 3. The intention is to set a ceiling of 26,000 for benefits paid, 500 a week for a couple and one-parent families including the costs of keeping a roof above their heads, this could leave families trying to live on 3 a day. This of course coincides with the reduction in housing benefit. For a number of years, the general belief was that paying National Insurance would ensure benefits if people had to face a difficult time. However, the intention now is to reduce employment benefit to one year only. If individuals fall ill or diabled before retirement, many will discover that they will not receive any benefit at all and, of course, the retirement age is also set to rise. 4. The Child Poverty Action Group showed that a child born this year will receive around 1,500 less than a child born yn Child care credit is to be cut by 10% even though nursery costs have risen almost twice as much as wages. The Government had to acknowledge that their statement in Autumn of last year would mean that 100,00 children would be included in the children in poverty category, in addition to the 300,000 already in this category because of previous cuts. 5. The Voluntary Sector will lose 5bn around 40% of the public money they currently receive. This means that around one third of such organisations could cease to exist, thus damaging the important voluntary work that occurs in many areas. 6. Legal Aid will be cut in a number of social cases, even though there may be a danger pf people losing their homes. There has been an increase in the number of people turned out of their houses by private landlords, and Legal Aid will no longer be available for tenants. There will be a reduction of 25% in claimants and the remaining 75% will lose up to a quarter of their compensation,as the Government will move money from individual claimants across to the insurance companies who are likely to win over 2.5 billion. As

5 someone commented, the courts will soon be very similar to the Ritz Hotel any one can go as long as you can afford it!. 7. The cuts also mean the scrapping of the no win no fee plan which had allowed 3 million people to seek justice. No support will now be available to bring cases of negligence against lawyers, accountants, bankers and surveyors etc. or cases of medical negligence. No support will be available either for those suffering from industrial diseases nor for the widows and children of those who lose their lives in the workplace or because of a road accident. 8. The plans to compel unemployed young people to undertake a period of work experience for no pay means that companies can use these young people rather than giving additional hours to their employed workers. This means that four out of every five part-time workers will fail to receive additional hours. The situation is made worse, since an individual now has to work 24 hours rather than the 16 hours previously needed to continue to receive tax credits. 9. Charities have shown that the rise of 14% of people counted as homeless is only part of the story, since those figures do not include those who have lost their homes and who now live with friends, in hostels or on the street. In addition, many local authorities pay for homeless persons in bed and breakfast accommodation because of the severe shortage of private parttime accommodation a pattern that the previous Labour Government had almost resolved. The danger is that this situation will deteriorate over the next few months as the cuts to the costs of the home will force thousands of vulnerable families and young people out of private houses for rent. 10. It appears that women suffer the brunt of the cuts of 1.73bn 73% of the cuts happen to them whilst men lose around 640 million. 11. It must also be remembered that unemployment has doubled over the past three years and by now half the black men who are available for work are unemployed (according to figures not released by the Government but were unearthed by the Guardian newspaper). This does not include students, and according to the National Statistics Office (ONS) it is young people who are worst affected. No doubt this is not the complete picture, and it seems inevitable that more suffering is on its way. And despite some of the leaders readiness to say we re all in this together, it s hard to agree with this sentiment when one sees several receiving salaries in the millions! Geraint Francis Roberts