Poverty set to rise in UK, as IFS warns families will be worse off in 2016 than they were 14 years ago

A recent report by the Institute for Fiscal Studies (IFS) has predicted that poverty is set to rise in the UK under this government, with incomes falling, meaning families in 2015 will still not be earning more than they did in 2002  on average.

The IFS report predicted that “absolute poverty is forecast to rise by about 600,000 children and 800,000 working-age adults,” while “median income is expected to fall by around 7% in real terms, which would be the largest three-year fall for 35 years.”

The director of the IFS, Paul Johnson, said: “In the period 2009-10 to 2012-13, real median household incomes will drop by a whopping 7.4% – a record matched only by the falls seen between 1974 and 1977.”

Critics of this government have described how the coalition’s policies are affecting the lowest-income earners and the vulnerable hardest, shifting the burden onto lower-income earners to lower the deficit. Alison Garnham, chief executive of the charity Child Poverty Action Group, said: “The IFS analysis confirms that the chancellor’s new tax and benefit measures are a takeaway from low-income families with children to those at the middle and top. It is particularly perverse to reduce incomes of the lowest-paid working families by reducing tax credits when this is the group the government claims it wants to help through improved work incentives.”

(I have not heard David Cameron say: “We are all in this together” for a very long time, now.)

Shadow home secretary Yvette Cooper said that the poorest 30% of households would lose more than three times as much as the richest 30%.

 The IFS report stated that, in the longer term, the government’s planned  introduction of Universal Credit will act to reduce both absolute and relative poverty; The long term effect of Universal Credit is to reduce relative poverty by about 450,000 children and 600,000 working-age adults in 2020–21.
However, the IFS report continued, stating that “the net direct effect of the coalition government’s tax and benefit changes is to increase both absolute and relative poverty. This is because other changes, such as the switch from RPI- to CPI- indexation of means-tested benefits, more than offset the impact on poverty of Universal Credit.”
“Absolute and relative child poverty are are forecast to be 23% and 24% in 2020–21 respectively.”

The report continued: “These compare to the targets of 5% and 10%, set out in the Child Poverty Act (2010) and passed with cross-party support. This would be the highest rate of absolute child poverty since 2001–02 and the highest rate of relative child poverty since 1999–2000.”

Greece protests update

Just a short post for now. I may write a more in-depth one later when I have a chance.

BREAKING NEWS: Greek parliament has passed the austerity measures, bowing to the will of the financial collective but ignoring the wills of the protestors who have been demonstrating for months on end. Violence is continuing on the streets. As the Guardian reports:

  • There have been running battles between riot police and protesters outside the Greek parliament again as its MPs prepared to vote on whether to pass the austerity bill demanded by international lenders. The trouble flared after some protesters surged through metal barricades outside the parliament building. Police once again fired volleys of teargas. Some demonstrators hurled projectiles at officers but many fled the square as teargas filled the air.
  • Greece’s parliament approved the five-year austerity plan with 155 votes in favour and 138 votes against.

    Only one member of prime minister George Papandreou’s socialist party voted against the law and the speaker of parliament announced he had been immediately expelled from the party. One deputy from the conservative opposition cast a vote in favour.

    RT @thesspirit: #Syntagma sqr now (4.26pm) People are NOT leaving #25mgr #greekrevolution #28jgr


    I was in Syntagma Sq last night and it was an incredibly volatile situation. Teargas and fire crackers were thrown all over the place. One was even deployed into the middle of a group of people having a calm debate, which was totally uncalled for. There was of course a violent element (seemingly a lot of teenagers from what I could make out) who were just basically running around smashing things up, looting the kiosks and having running battles with the police.

    The police were pretty disgraceful (as usual) throwing rocks at groups of protesters (not ‘anarchists’ people of all ages) and generally lashing out and trying to ‘kettle’ protestors into smaller side streets so they could then throw the tear gas at them. Their ‘orders’ were clear.

    The problem is, this was before the measures are voted for. What happens if they pass? The place looked like a warzone and was so fraught the mood would change in a split second. I really wonder what the way ahead is. It doesn’t seem like there’ll ever be a satisfactory one.

Live updates of Greek protests can be found here.

24 hour strikes in Greece over austerity measures.

Protesters gather rally for a fifth day - May 29, 2011 (Kostas Tsironis)

Greece has been hit with a 24-hour anti-austerity strike as the government prepares to push forward latest austerity reforms. The strike has left hospitals struggling with emergency staff and has disrupted public transport, and radio and television programmes have been forced off the air. As seen by the image above, demonstrations have been ongoing for many weeks now.

Scores of demonstrators who have camped in Syntagma Square since 25 May have been joined by dozens of other demonstrators, chanting slogans outside parliament. Such demonstrations have often turned violent in the past, with clashes with the police.

A protestor lays on the ground after clashes erupted during a general strike that halted services and disrupted flights May 11, 2011 in Athens, Greece. Getty

The Socialist government is pushing forward a €28bn (£24bn) austerity programme this month, under pressure from the International Monetary Fund (IMF) and European countries who could cut current funding from a rescue loan package worth €110bn (£96bn). The Socialist party have abandoned a pledge not to impose new taxes and have drawn up a four-year privatisation programme worth €50bn in order to meet the austerity its commitments – moves that have only fuelled demonstrations against the cuts by public utility employees, labour unions and other affected groups.

Greece’s programme to sell off €50bn of state-owned assets include plans to sell stakes in some of its most valuable assets, including its two largest ports, a state-owned bank, the country’s gambling monopoly and a water utility. Economists welcomed the announcement, saying that Greece needed to drastically step up its privatisation drive. The party has been delaying such measures, fearing internal opposition and backlash from labour unions.

The protestors in Syntagma Square have stated their aims to block access to the legislative assembly before MPs begin to debate the next level of cuts on Wednesday afternoon. Not all MPs have accepted the austerity measures; one MP defected on Tuesday whilst another said he would vote against the bill.

The austerity measures have, naturally, impacted on the party’s popularity in recent weeks; a recent opinion poll suggested that the opposition conservatives have a four-point lead over the Socialists in terms of public popularity, the first time the party has been in the lead (in surveys) since 2009.

Riot police clash with protesters outside the headquarters of the Bank of Greece during a 24-hour strike in Athens, Wednesday, May 11.. (Thanassis Stavrakis)

A riot policeman blocks a municipal worker as he tries to enter the parliament building during a march against austerity in Athens, May 18. Greeks have staged repeated demonstrations to protest the EU/IMF prescribed belt-tightening. ReutersPolice detain a protester during a 24-hour strike in Athens, Wednesday, May 11. Riot police made heavy use of tear gas and stun grenades to disperse youths throwing stones and petrol bombs during a march attended by 20,000 people. (Thanassis Stavrakis)

Disney trademarks “Seal Team 6”

United States Naval Special Warfare Developmen...

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Disney has trademarked the name “Seal Team 6”, just two days after President Obama announced that Navy SEAL Team 6 killed Osama bin Laden.

The trademark application came on May 3, just two days after the bin Laden killing was announced, so it is safe to assume that this is not a mere coincidence.

CBS news reports that: “In addition to “entertainment and education services,” they cover toys, games and playthings (including the legally all-embracing “hand-held units for playing electronic games other than those adapted for use with an external display screen or monitor”); gymnastic and sporting articles; clothing, footwear and headwear; Christmas stockings, Christmas tree ornaments and decorations; and – no doubt ideal for depicting raids in Pakistan – snow globes.”

I wonder if they are going to make an animated film about the SEAL Team 6 killing of bin Laden?

David Cameron and the Corporate Coup D’Etat (Britain: The New Tax Haven of Europe Pt. 2)

It has been described as a “corporate coup d’etat” – Cameron’s plans to “engineer the greatest transfer of wealth from the poor and middle to the ultra-rich that this country has seen in a century.”

At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%.”

Under new proposals, companies will not pay any tax at all in the UK on money made by their foreign branches. This will mean that money that has passed though tax havens will remain untaxed when it reaches the UK. Amazingly, the UK will be only the second country in the world to allow this – Switzerland is the other.

The proposal, however, will only apply to “large and medium companies” – it is not available for smaller firms. Surprise, surprise. The government states that it expects “large financial services companies to make the greatest use of the exemption regime.” So who are the government implying? The banks. Yes, in a move that will shock… well, no-one, Cameron and the Conservative Party are introducing proposals to ease of the strain off of the poor banks and to help create a new European tax haven in the UK.

While big business will be exempt from tax on its foreign branch earnings, it will, amazingly, still be able to claim the expense of funding its foreign branches against tax it pays in the UK. No other country does this.”

The measures will accompany the large reduction in corporation tax from 2014: down from 28% to 24%. George Osborne stated that he wants to bring corporation tax to “the lowest this country has ever known” whilst a Treasury Minister boasted that the rate will be the lowest “of any major western economy.” Continue reading

Cameron to let bankers off with extortionate bonuses

Rt Hon David Cameron MP speaking at the Conser...

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David Cameron has warned that it would be wrong to take “revenge” on the bankers despite the fact that it has emerged that thousands of bankers are in line for extortionate bonuses whilst the general public suffers with cuts, hikes in VAT and attacks on public services.

JP Morgan has revealed that it will give 10,000 Bristish-based staff an average of nearly £250,000. The Royal Bank of Scotland, which by the way is now 83% owned by us (the taxpayers), is set to pay around £1 billion in bonuses to staff. It is claimed that Goldman Sachs is to hand out £8 billion in salary and bonuses for 2010 (down from £10 billion for 2009), and Bob Diamond, the head of Barclays, is expected to be handed a “meagre” £8 million bonus for last year.

Whilst the general public suffers the brunt of the cuts, the hike in VAT, the removal of state support for many (such as with Derek Carpenter), the marketisation of our education system, the shakeup of the NHS, the attack on our public sector, the bankers are lavishing themselves with huge bonuses and giving themselves pats on the back for… what, exactly? Why are they not showing the slightest signs of remorse, or giving something back to the country that they helped bring to the edge of ruin? As the average citizen begins to feel the strain of the coalition’s measures, the banking sector simply carries on as usual.

Continue reading

NUS Leader Responds to Clegg’s Letter

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Image by The CBI via Flickr

NUS president Aaron Porter responds to Nick Clegg. You can read the full letter here: NUS response to Nick Clegg PDF. Some extracts from the letter are noted below:

“I am pleased that you have clarified that your recall proposals were to apply to serious wrongdoing. But you should know that we would regard the breaking of signed, individual pledges to vote against higher fees as both serious and wrong. This is not as simple as coalition parties having to compromise.” [pg.1]

“You herald bringing part-time students into the scheme as a success – we agreed on the day Browne was published – but only those studying at 33% or more will benefit from a loan.” [pg.1]

“You trumpet the change in the post-graduation repayment threshold – convenientlyignoring that the £21k level won’t be introduced until 2016, or increased until 2021. If inflation is higher than 2.2%, the £21,000 earnings repayment threshold will not offer any real advantages to graduates by 2015/16.” [pg.1]

“You argue progressivity through the example of a nurse Continue reading

“Progressive” tuition fees hike progressing the wrong way

Portrait of Nick Clegg.

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Despite claims that the proposed cuts in University funding and the hike in tuition fees are “progressive”, a recent analysis of the proposals, published today, argues that the “reform” of funding will limit social mobility and leave around two-thirds of all graduates paying far more for a degree.

The government’s proposals will see tuition fees as high as £9,000 a year, whilst introducing real interest rates for the loans as well as a longer period before the debt it “written off”. Million+, a university lobby group, states that these changes will hit middle-income earners the hardest, running contrary to the numerous claims by the coalition that “we are in this together”, and the statements that those with the broadest shoulders will carry the brunt.

The report also argues that pupils from poorer backgrounds will be deterred from applying to Uni, which is interesting as Nick Clegg is arguing that it is the DEBATE about reform that will put off poorer students. Clegg wrote to the NUS leader, Aaron Porter, urging students not to “distort” the debate over fees, saying that many wrongly believe they will have to pay the fees immediately. I think Clegg is missing the point here.

The report also warns that many women will be ending up in debt for the most part of their working lives, whilst mature students will also be deterred. With state funding for University teaching being cut by a monumental 80% by 2014-15, the government will have to borrow more to fund the higher loans and pick up a bigger bill for those debts “written off” after 30 years. The report argues this will leave taxpayers worse off.

“It is difficult to see how the proposals provide a long-term, sustainable framework for the funding of higher education and universities in England,” the report says. It also accuses the government of using simplistic measures to define social mobility, such as the number of students on free school meals who go to Oxford, rather than assessing whether a having degree helps those from deprived backgrounds get better jobs, the Guardian states.

Some have also claimed that the coalition is trying to push through the legislation before MP’s have had a chance to properly review and debate the proposals. It appears as if the opinions held by Clegg that the proposals are “fair” and “progressive” may be empty rhetoric. Meanwhile, protests are continuing up and down the country on an almost weekly basis, with students clashing with police and occupations of buildings taking place even as you read this. Stay tuned.