Business groups have warned David Cameron that he cannot expect companies to automatically raise wages to compensate for cuts in tax credits that are likely to be unveiled in the summer budget.
Industry organisations, including the British Chamber of Commerce (BCC) and Institute of Directors (IoD), spoke out after Cameron gave a speech criticising what he claimed was a “welfare merry-go-round” and suggested higher pay should replace tax credits.
There has been speculation that Downing Street could unveil a plan to encourage companies to pay their workers more at the same time as the government announces £12bn of welfare cuts, including reductions to tax credits, next month.
Steve Hilton, Cameron’s former adviser, claimed in a Daily Mail article this week that it was a “complete travesty” that giant retailers like Tesco and Sainsbury’s are making billions of pounds in profits while they are “subsidised by the taxpayer so they can pay their workers a pittance”.
There are growing indications from the government that the way child poverty is measured will be changed in order to allow tax credits to be cut, as part of the plan to reduce the benefits bill by £12 billion.
David Cameron dropped heavy hints in a speech on Monday that he plans to cut tax credits available to low paid workers. He said he wanted to see:
“A welfare system that encourages work – well paid work.”
However, he went on to add:
“The wrong track though, is to ignore the causes, and simply treat the symptoms of the social and economic problems we face.
“Take for example the complacency in how we approach the crucial issue of low pay. There is what I would call a merry-go-round.
“People working on the minimum wage having that money taxed by the government and then the government giving them that money back – and more – in welfare.
“Again, it’s dealing with the symptoms of the problem – topping up low pay rather than extending the drivers of opportunity – helping to create well paid jobs in the first place.”
If tax credits are cut, however, this is likely to plunge more low paid families with children into poverty.
The Green Party has slammed the Conservatives for waging “war on welfare”, describing planned £12bn in welfare cuts as “kicking people when they are down”.
Green Party Work and Pensions spokesperson, Jonathan Bartley, said the Tories are threatening the future existence of the welfare state and criticised controversial benefit sanctions for making it “harder, not easier, to find a job”.
Mr Bartley added that David Cameron’s hint of an assault on tax credits “would take away a crucial lifeline which enables many people to stay in work”.
Responding to David Cameron’s speech on welfare earlier today, Mr Bartley said: “The Conservative war on welfare is incoherent, misguided and based on ideology rather than reality.
“Welfare is an investment which helps people to build a decent life, not something that ‘papers over the cracks with a veneer of fairness’.
“The social security of millions is being threatened in a way we haven’t seen since the modern welfare state was set up.
“The best way to help people into work is to support them, not kick them when they are down.
“Conservative sanctions are creating barriers and making it harder, not easier, to find a job. These sanctions should be scrapped, not extended to those claiming tax credits.
“Cutting tax credits would take away a crucial lifeline which enables many people to stay in work, while the shambolic new Universal Credit system also has an in-built disincentive to work. For every £100 someone on Universal Credit earns, £65 of support is lost.
“If the government wants to make work pay it should make the minimum wage a Living Wage. Not only would this save £2.4bn in tax credits, it would also raise £1.5bn in tax revenues.”
Forty-four days after David Cameron gained an unexpected majority on a dramatic general election night, opposition parties are still picking themselves up from the floor. But on the streets of Britain, tens of thousands of people took up their placards and filled the streets of London, Glasgow and elsewhere for the first major protest against the government’s plans for five more years of austerity.
Estimates of the size of the rally in central London on Saturday varied between 70,000 and more than 150,000; in Glasgow’s George Square several thousand gathered and there were smaller demonstrations reported in other cities, including Liverpool and Bristol.
“We’re here to say austerity isn’t working,” said Caroline Lucas, the Green Party MP, to great applause from the crowds in Parliament Square at the end of the march. “We’re here to say that it wasn’t people on Jobseekers’ Allowance that brought down the banks.
“It wasn’t nurses and teachers and firefighters who were recklessly gambling on international markets. And so we should stop the policies that are making them pay for a crisis that wasn’t there making.”
Marching under the banner End Austerity Now, protesters denounced public sector cuts, the treatment of the disabled and the vulnerable through welfare cuts, the privatisation of the NHS.
Teachers, nurses, lawyers and union groups marched under their own banners. Chants and songs demanded an end to Tory government, equality and more help for the poor. A sprinkling of celebrity faces – Russell Brand, Charlotte Church and actor Richard Coyle – were among the crowd.
The deputy first minister of Northern Ireland, Martin McGuinness, told the rally:
“It is David Cameron’s cabinet of millionaires – they are the people who are the real spongers. They are the people who are given free rein to live out their Thatcherite fantasies at the expense of ordinary, decent communities throughout these islands.”
Protesters set off from outside the Bank of England, and by the time the march reached Westminster – its final destination – a sea of banners, placards and flags stretched for more than a mile down Whitehall and past Trafalgar Square.
IPSA, the body which sets MPs pay, has today confirmed its intention to give MPs a 10% pay rise, whilst the budget for claimants is set to be cut by more than 10%
According to the TalkTalk website, the £7,000 pay rise for MPs looks certain to go ahead, in spite of prime minister David Cameron saying he thinks it is wrong. In fact, when asked whether Cameron would refuse to take the increase himself, a spokesperson for Downing Street merely said that the rise would go to all MPs “automatically”.
Meanwhile, in a recent report on the planned £12 billion cut in benefits spending, the IFS calculated that this amounted to 10% of the benefits budget that has not already been explicitly protected from cuts.
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Thousands of unemployed young people across the North East could be stripped of benefits under tough plans in the Government’s Queen’s Speech.
David Cameron insisted the crackdown was designed to end youth unemployment, as he set out his plans in the House of Commons.
But Labour MPs said the plans effectively meant young people would be forced to work for as little as less than £2 an hour – payment far below the minimum wage.
The North East has the highest youth unemployment rate in England.
Office figures show 21.4 per cent of young people aged 18 to 24 are unemployed.
The figures cover people who are “economically active”, which means they are in a job or looking for work. Full-time students are not included.
This is a higher proportion than in any other part of England. It’s also higher than Scotland or Wales, and roughly equal to the Northern Ireland figure of 21.8 per cent.
By contrast, the unemployment rate for people aged 18 to 24 in the south east is 11.4 per cent. And in the West Midlands, it is 16.1 per cent.
Official figures also show that 4,000 people in the North East aged 18 to 24 have been claiming Jobseekers Allowance for six months or longer.
But under Government plans, anyone aged 21 or under will lose the right to this benefit – and be put on a new “youth allowance” instead.
They’ll get the same amount of money as before, up to £57.90 a week, but if they are unemployed for six months then they will be given compulsory community work such as making meals for the elderly or working for local charities – and they’ll lose the right to claim benefits if they refuse.
If they will have to work 30 hours a week as expected, that would be a payment of £1.93 for each hour worked, well below the minimum wage of £5.13 for people age 18 to 20 and £6.50 for those older.
The Government says it plans to prepare young people for work and will create 200,000 new apprenticeships in the North East.
And Conservatives point out that the number of people aged 18 to 24 in the North East actually in work has risen by 13,000 over the past year.
David Cameron told the House of Commons: “One of the most important things we can do is give young people the chance of an apprenticeship and the chance of work.
“What we have done is expand apprenticeships and uncapped university places, so that there is no cap on aspiration in our country.
“We now want to go further by saying that every young person should be either earning or learning.
“Leaving school, signing on, getting unemployment benefit, getting housing benefit and opting for a life out of work—that is no choice at all, and that is why we will legislate accordingly.”
And Conservative MP Guy Opperman, MP for Hexham, said:
“This Bill will provide assistance to young people to earn and learn, and give them the skills which they need to have a long term future in employment.
“We need to address the skills gap and using apprenticeships will really make a difference to do that.”
Labour Gateshead MP Ian Mearns said:
“If young people are expected to work in order to get benefits then they should be entitled to the minimum wage.
“To tell them to work for £2 an hour is ridiculous. We have legislation which says there is a minimum wage in this country and that should be the minimum level people can expect.”
Conservatives will face a battle over plans to stop people aged 18 to 21 claiming housing benefit – with Labour MPs and other critics warning it will put young people who are forced to leave home because of abuse in danger.
Source – Newcastle Evening Chronicle, 30 May 2015
Family incomes are on the rise in most of the region, official figures show – but at a slower pace than in most of the country.
Household disposable income per head crept up by just 0.8 per cent in the North-East between 2012 and 2013, below the one per cent rise across the United Kingdom.
And the North-East was left in the slow lane by both Scotland (up two per cent) and the West Midlands (up 2.3 per cent) as the economy bounced back, as well as by Yorkshire (up 1.4 per cent).
But households in London and the South-East (both up 0.6 per cent) saw incomes grow more slowly – even though overall growth was far higher than in the North-East in both areas.
The statistics also reveal striking local variations in the changes in gross disposable household income (GDHI), the amount available for spending or saving after taxes and benefits.
Incomes grew sharply in Darlington (3.5 per cent) and South Teesside (2.6 per cent) and were also up in North Yorkshire (two per cent) and Hartlepool and Stockton-on-Tees (1.9 per cent).
But growth was more sluggish in County Durham (1.3 per cent) – and fell markedly in both Sunderland (3.1 per cent) and York (3.3 per cent).
In Westminster, the average GDHI was £42,221 in 2013 – almost three times the figure of £14,659 in County Durham and the highest of 173 local areas analysed.
And incomes in Kensington and Chelsea/Hammersmith and Fulham (£42,116), Camden and City of London (£37,324) and Wandsworth (£35,237) were not far behind.
Matt Whittaker, chief economist at the Resolution Foundation think-tank, said:
“Regional inequalities have fallen since the crash, but the gap between the South East and the UK is stark.”
Experts believe disposal income – the amount people have to spend after the bills have been paid – is the best measure of the economic confidence of families and individuals.
A campaign has been launched for the north of England to become a breakaway state.
A petition by the Raise The North group calls for people from the region to band together and seek independence.
It is also urging David Cameron to ‘submit to the will of the northern people’.
The separation moves comes after an earlier petition called for the north to join with an independent Scotland.
The #TakeUsWithYouScotland hashtag soon flooded Twitter. More than 40,000 people have now signed the call-to-arms.
The latest petition, posted with the #RaiseTheNorth hashtag, reads:
“There is growing consensus that the north of England should join Scotland.
“Northern England should not ask to leave one governor, only to take on another. For as long as the south has ruled, we have been subjugated and marginalised.
“But the answer is not to allow ourselves to be ruled from Scotland. The Scots may help, but they can’t do it for us.
“It’s time that the people of the north stood as one against Westminster and said ‘no more’.”
Signatory Valerie Quigley wrote:
“It is time for the north of England to get their say. They have suffered from the same democratic deficit as Scotland for many years.
“North England self-government would benefit the area and could make good neighbours and agreements cross-border with Scotland.”
On the back of the Scottish independence referendum there have been growing calls for English devolution.
Places like Greater Manchester will soon have its own directly elected mayor; control of its entire £6bn NHS budget, a national first; and greater control over housing, transport and skills.
But the Raise The North group wants more, with the whole of the north of England breaking away and gaining independence.
At the last general election the North East was one of the few areas in England where support for the Labour party, which fought against Mr Cameron’s Tory government, actually went up.
With the highest unemployment rate in the country and many people either working in the under threat public sector or relying on benefits to boost poor salaries, there have been fears the region is missing out on what has been described as the economic upturn in the country.
Source – Newcastle Evening Chronicle, 19 May 2015
An 11 year-old “kind hearted” schoolgirl has slammed David Cameron for “making the poor poorer”, it has been reported.
In a letter to the Prime Minister and Tory leader, Halle Carnall, who attends the Accrington Academy, says her school friends are often left hungry and that she is worried about “what state this country will be in when I’m older”.
Her letter has been shared on Facebook over 40,000 times, after proud mum Joanne, 31, uploaded it to the social network to share with family members.
Joanne told the Accrington Observer:
“After school, Halle was sat in her bedroom, I thought she was doing her homework when she came down and asked me to read her letter.
“When I read the first line ‘Dear Mr Prime Minister’, I almost laughed as I thought it was a joke but as I carried on reading I realised it was a very serious letter that she had put a lot of thought into.
“I uploaded a copy of the letter to Facebook, only to show it to my family, as they live in Liverpool.
“I didn’t expect anything further than a couple of likes and maybe a few comments from friends and family.
“We were in total shock to see that the letter had been re-shared almost 40,000 times, as far as China and New Zealand.”
In her letter to David Cameron, Halle congratulates the PM for winning the general election but warns against “selling the NHS and making the poor poorer whilst looking after you and your firiends”.
“I am worried you are making a poor choice that will impact on my future”, she says.
“I am very lucky that both of my parents have good jobs and I will have a warm meal tonight. However lots of my school friends and millions of others in your country are not so lucky and will be hungry today, tomorrow and for the next five years at least.”
In a call to unite the whole of society, Halle writes:
“Whether rich or poor we are all the same. We all have the right to a good standard of education, healthcare if we are poorly and job opportunities.
“It scares me to imagine what state this country will be in when I’m older.”
She ends the letter by urging David Cameron to:
“Please consider me and million of children of just like me who deserve the best chance in life”.
Commenting on the huge response the letter has received on Facebook, Halle’s mum Joanne said:
“The response has been amazing.
“To us, Halle has always been a kind hearted and gifted child, but for total strangers to agree is just crazy.
“People have been commenting on how well written the letter is, and how Halle is so bright, caring and such a brilliant young lady.
“People have said they are looking at a future electorate and that she would make a fantastic MP.”
Source – Welfare Weekly, 19 May 2015
The managing director of a much-loved musical hub is begging David Cameron for help, saying his Big Society is letting down community-minded entrepreneurs.
Housed in a rapidly deteriorating building, The Forum in Darlington needs £1.5m of refurbishments if it is to continue and grow.
However, its status as a CIC (Community Interest Company) means the team is finding it near impossible to attract vital funding.
Despite having saved the popular centre from closure and consistently meeting objectives, The Forum is struggling to attract investment and must plunge its own profits back into services for the community – leaving little for refurbishment.
Managing director Allison Mckay believes private investors are put off by the council-owned building and says investment available to other CICs is dependent on being able to prove the enterprise has a “social impact”.
She says proving the social impact of a music-based venture that serves a diverse range of people and offers a variety of activities is next to impossible, despite its undeniable community worth.
Applications for funding are regularly rejected because of difficulty in proving music has a social value.
Ms Mckay said investors should visit CICs to see the work they do instead of relying on “box ticking exercises”.
She said the local authority did what it could to support them but more is needed to save The Forum.
“There are budgets in central government set aside for CICs but social impact is a massive thing and that’s very difficult for us to measure.
“Investment goes to social enterprises with specific criteria and we don’t fit that box.
“We need help with the building – we need new chairs for people to sit on but how do you measure the social impact of chairs?”
In a letter to David Cameron, Ms Mckay said:
“When everything pointed in the direction of sinking we kept the ship afloat but where is our so-called partner, the Big Society?
“This [CIC] is no partnership between private and public, this is a take situation and the Big Society preys on people like us who are entrepreneurial and also want to make a difference.”
Source – Northern Echo, 15 May 2015