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Tax credits no more
UPDATE: A number of folk have been looking for the original paper – here is the link
And belated thanks and dues to Hannah Jordan at SCVO for originally circulating it to folks she thought might be interested.
Also, it seems the number might be even higher – according to HMRC last December, it estimated the number of families in Scotland losing out to be 84,900. It’s worse than we thought!
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I’ve been sitting on this information for more than a week now, in the hope that someone, somewhere would also come across it. It is taken from a paper that was lodged in the House of Commons publications store (I’m sure it has a suitably fancy name.. answers on a postcard please).
Because it is dynamite. And I really cannot believe that no-one else has seen it (they have) and thought it was newsworthy. Or at least blogworthy.
In the last few weeks, thousands of families all acros Scotland have been receiving missives from HMRC, regretting to inform them (not really, not at all in fact) that their tax credits are no more. For every family it will have come as a shock. But taken together, the scale of the impact of this cash grab from hardworking families (TM Labour/Conservatives/Lib Dems/take your pick) all across Scotland is quite shocking. The table below sets out how many families in each local authority area in Scotland will no longer be in receipt of child tax credits come the start of April.
| Aberdeen City | 2200 | Edinburgh | 4500 | Orkney Islands | 300 |
| Aberdeenshire | 3400 | Eilean Siar | 200 | Perth & Kinross | 2000 |
| Angus | 1800 | Falkirk | 2900 | Renfrewshire | 2600 |
| Argyll & Bute | 1200 | Fife | 5600 | Scottish Borders | 1800 |
| Clackmannanshire | 900 | Glasgow | 5000 | Shetland Islands | 400 |
| Dumfries & Galloway | 2500 | Highland | 3600 | South Ayrshire | 1400 |
| Dundee | 1800 | Inverclyde | 1200 | South Lanarkshire | 5200 |
| East Ayrshire | 1900 | Midlothian | 1400 | Stirling | 1100 |
| East Dunbartonshire | 1600 | Moray | 1700 | West Dunbartonshire | 1400 |
| East Lothian | 1500 | North Ayrshire | 2000 | West Lothian | 3000 |
| East Renfrewshire | 1200 | North Lanarkshire | 6000 |
I should point out that several times while compiling this table I went back to check that the figures really are “thousands”, for 200 families in the Western Isles and 400 on Shetland just seems a huge amount, relatively. But in terms of actual numbers, the worst hit local authority areas are North Lanarkshire with 6000 families losing their child tax credits, Fife with 5600, South Lanarkshire with 5200, Glasgow with 5000 and Edinburgh with 4500.
Also of interest is the impact on many rural areas in Scotland. Dumfries and Galloway and East Ayrshire are largely comparable in population terms; usually, in league tables like these the picture will be worse in East Ayrshire because of higher deprivation levels. But Dumfries and Galloway will be hit harder in terms of the income loss to families, partly because it has marginally lower unemployment and therefore more parents in work, but also because areas like these are low wage economies. Lots of people earn just enough to get by – tax credits have helped make incomes stretch further. No more. And what will happen is that young families will leave these areas or not move there in the first place. The same applies to all the peripheral regions of Scotland.
The change applies to any lone parent family earning over £26,000 per year and any two parent family earning over £32,000. Previously, the cut off point was £42,000. At the same time, the amount that can be received for childcare costs is being cut from 80% to 70%, meaning that families have to meet nearly one third of such costs themselves.
Now, people on these kind of sums are not living in poverty but for two parent families in particular, £16,500 each is well below the national average. The ones who will feel it most are still on fairly low incomes. And it’s the impact. Going without several hundred pounds a month – as will be the case for some – just like that, will be tough. Especially in an era of largely frozen pay and rising household costs. This is the Institute of Fiscal Studies’ predictions of middle-range income families being hit the hardest by the Coalition government’s austerity measures.
This is indeed the squeezed middle so one wonders where are all the strident political voices protesting on their behalf? Where is the media? Or do we only care about those lambs about to lose their child benefit on much higher incomes?
The fact is that such decisions have a knock-on effect. For some, it will be to choose not to work – or rather to be forced into deciding that work does not pay. This will be particularly true in many two parent families, and often, it will be the woman who stays at home, creating greater economic dependency and disparity between men and women’s earnings, yet again.
Tax credits have always been somewhat controversial. Hugely bureaucratic, costing significant amounts to administer, some even argue they have contributed to in work poverty, keeping people on low incomes and allowing unscrupulous employers to avoid their responsibilites to ensure that people are paid a decent wage. But they have served an essential purpose for many families, who would be on low incomes anyway. They have brought more money into families for the benefit of children, centred around the fact that there are children who have the right not to grow up in poverty or indeed, in workless households. This will all now change.
The coalition government might argue – and they do – that they don’t like doing this, that this is the necessary consequence of the previous Labour government’s profligacy, that we must all contribute to getting our collective indebtedness down. But you cannot escape the suspicion that they are hurting where they can get away with it. Families like these rarely complain, they just get on with it. And – as we have seen – they are largely ignored. The ones who cope and can be relied upon to cope.
But with the gap between rich and poor getting wider, with obscene banking bonuses still being paid out, with football clubs and megabucks players enabled to avoid their tax liabilities, with discussions swirling over removing the 50p tax rate for the best off, they will be wondering why they – and their children – are the ones having to carry the biggest load.
How many families in Scotland will be affected? The UK government’s own figures suggest 73,300. 73,300 about to lose thousands of pounds of income a year. 73,300 for whom the balance will be tipped from coping just to not. Does nobody care?
Mob rule is no rule
Like many, I am no apologist for Fred Goodwin. Alistair Darling has been particularly trenchant on the issue. He is the author of his own misfortune but the removal of his knighthood has been vindictive and tawdry. It has left Darling, many others and indeed, me feeling unclean.
Not because I think he should have kept it – I don’t believe in the honours system full stop. And while the Lords are to be commended for their scrutiny of the welfare reform bill and attempts to iron out its worst excesses, a revising chamber should have some level of accountability to the people, and not just the political parties whose pockets nominees fill.
And of course, Goodwin still has his rather generous pension pot to fall back on, paid for by the taxpayers, natch.
But why stop at him? As the First Minister says, there are convicted criminals in the Lords who have been allowed to keep their honours. There are many others in there who were rewarded for services to banking who are also culpable here. The appointment that I think should be reversed belongs to Sir Robert Smith. He was involved at the Weir Group while its senior management (and board one supposes) made a calculated decision to circumvent the UN oil for food programme, preferring instead to win oil contracts in Iraq by bribing Saddam and his family. The Weir Group was fined £14million for its illegal and immoral behaviour. Smith’s punishment for his involvement in the wheeze? A seat on the Scottish Government’s economic advisory council and the opportunity to front the Glasgow Commonwealth Games efforts.
Fred Goodwin may be guilty in the court of public opinion of many crimes, but he does not have the stain of the starvation of innocent children on his conscience, at least not directly.
It is the issue of the court of public opinion that bothers me. We are living under the charge of a UK Government utterly lacking in backbone, and worse, without any shred of moral fibre. One that thinks that if it throws a gladiator to the lions, the populace will be satisfied.
It is aided and abetted by the media in all this, who love the chase and the scent of blood. If some papers could have depicted Goodwin with his head on a stake, they would have.
What does it say of the quality of our political leadership or indeed, the state of society when this kind of behaviour is seen not only as acceptable, but is applauded. Goodwin was simply the most obvious victim to pick on; an easy target for the Tories. And I cannot help suspecting – perhaps portraying my own paranoia – that the fact that he was a Scottish working class boy made good (sic) made him all the more delectable for a political class that thrives on its establishment mores. Had he been an Eton old boy would the Tories have done more to protect him? I’m sure they would have.
Worse, much worse, is the demonisation of some of the most vulnerable in our society. Labour started this. When it was attempting to start reform of the benefits system – for which read cut the budget – it embarked on a cynical exercise of getting public opinion on side through the worst media mouthpieces. The numbers on incapacity benefit were inflated by talking only of the number of claimants rather than recipients (which is much lower); the fact that incapacity benefit was a contribution-led payment ie you had to have earned at some point in your life and made national insurance payments to qualify for it was ignored; recipients were depicted as scroungers and workshy, folk with sore backs and weak heads rather than individuals with complex conditions, some of which were not very visible.
It worked, and allowed the Labour UK Government to set the train in motion which reached its final destination last night. The demonisation of disabled people, lone parents, large families, poor older people and the long term unemployed is complete. Everywhere you go, every red top rag you read has another tale of the excess of the vulnerable poor, those of us who give a damn are met with uncomprehending stares and titters. Establishing the narrative of the feckless, undeserving poor allowed the Tories – helped by their little Lib Dem partners of course – to push through vicious cuts to the safety net that keeps many afloat. It has done me at various points in my life – and many more besides.
But no more. In order for bankers like Goodwin to keep their gold-plated pensions (and there’s an irony) and the likes of Ed Lester to lead a public sector agency, (no doubt soon to be a lord now there’s one going spare) be paid from the public purse but be allowed to avoid paying his fair share of tax, the UK Government has deemed those on the lowest rungs as the ones to help cut our deficit and get us out of this mess. All the while nodded on by an unforgiving media and public. Because if the pain falls on them, less of it hits us.
It all amounts to little more than mob rule. We have gone full circle and our mores resemble those in a more primitive culture, where the need to survive requires that the weakest be outcast and where difference is barely tolerated. Yet, we do not have such basic survival requirements: we have a much more sophisticated economy that should allow for more than survival of the fittest. Indeed, there are some supposedly primitive societies which would be horrified at what is going on on these shores.
John F Kennedy – no stranger to privilege himself – once said that “If a free society cannot help the many who are poor, it cannot save the few who are rich.“ Yesterday was a less than edifying example of that in action.
And if this is the kind of society successive UK Governments think it appropriate to lead and to foster, it is one I no longer wish to be part of. Selfish that might be, but I’d rather have some chance of success of creating a different place that lives by different rules – of living somewhere that can be, that dreams at least of being “a beacon of progressive opinion” – than none at all.
