This article was written by Tom Clark, for The Guardian on Tuesday 4th November 2014
The occupational pensions of MPs, ministers and the prime minister could be classified as welfare spending in the tax transparency statements that George Osborne has promised every taxpayer.
Her Majesty’s Revenue and Customs is writing to millions of tax-paying households with detailed figures on how the government spends their income tax and National Insurance contributions. Welfare is recorded collectively as the single largest expenditure, consuming nearly one pound in every four.
This presentation has been criticised as a politically motivated departure from Treasury officials’ original plan to break down social security into the components paid to different parts of the population, such as elderly, disabled and unemployed people.
By revealing that payments specifically earmarked for the unemployed, for example, represented only 3% of the total, this approach may have set back Osborne’s case for a fresh £12bn in benefit cuts.
Now experts are drawing attention not only to the lack of differentiation in the welfare chunk of spending but also to the inclusion of substantial elements of spending that would not normally be considered welfare at all, notably personal social services and public sector pensions. Even ministerial pensions are likely to be covered.
The Treasury said: “The headings in our tax summaries are based on internationally recognised (UN) definitions.” But in a briefing note published on Tuesday, the Institute for Fiscal Studies detailed how the welfare total included £28.5bn on “personal social services”.
“This is a number that in many analyses one would want to report separately from other welfare spending,” the IFS said. “Unlike other elements of ‘social protection’ it is not a cash transfer payment and in many ways has more in common with spending on health than spending on social security benefits.
“Another £20bn of the spending counted under welfare is pensions to older people other than state pensions. That includes spending on public sector pensions – to retired nurses, soldiers and so on. This is not spending that would normally be classed as welfare.”
Declan Gaffney, a social security researcher, said the inclusion of public sector pensions was bizarre.
“The Treasury needs to clarify exactly how it arrived at these figures, and publish the workings – spelling out exactly whose pensions it included. Does it, for example, include MPs and the prime minister himself?”
Gaffney has used IFS tables to calculate a more conventional figure for total welfare less state pension expenditure, and concludes that the government’s choice of definition inflates the published welfare spending total by around 40%.
The Treasury did not respond to a question about whether the pensions of MPs, ministers and the prime minister would be classified as welfare.
A spokesman for PCS, the civil service union, said:
“Tens of thousands of civil servants work hard to deliver social security support and they know how important and necessary it is. For their pensions to be hijacked as part of the government’s latest political attack on our welfare state is absolutely disgusting and it exposes just how far ministers will go to poison the well of public opinion.”
Source – Welfare Weekly, 04 Nov 2014
This article was written by Owen Bowcott, for The Guardian on Wednesday 29th January 2014
The level of UK benefits paid in pensions, jobseeker’s allowance and incapacity benefit is “manifestly inadequate” because it falls below 40% of the median income of European states, according to the Council of Europe in Strasbourg.
The finding in an annual review (pdf) of the UK’s adherence to the council’s European social charter is likely to provoke a fresh dispute between the government and European legal structures. Iain Duncan Smith, the work and pensions secretary, dismissed it as “lunacy”.
> Can a man increasingly suspected to be more than a little insane himself comment on lunacy in others ? Discuss…
The Council of Europe, which has 47 member states, said the conclusions were legally binding in the same way that judgments relating to the European convention on human rights had to be applied by member states.
However, the DWP suggested the findings merely had to be “taken into account” by British courts when assessing claims. The difference of interpretation is likely to lead to lengthy disputes when ministers attend the next round of meetings in Strasbourg.
In the report’s most critical section, the council’s European committee of social rights said: “Even if the minimum levels of short-term and long-term incapacity benefits, state pension and jobseeker’s allowance satisfy the requirements of the European code of social security, they are manifestly inadequate in the meaning of article 12§1 of the charter as they fall below 40% of the Eurostat median equivalised income”.
It added: “The committee notes … that short-term incapacity benefit stood at £71 (€85) and long-term incapacity benefit at £94 (€112) per week. ESA and jobseeker’s allowance stood at £67 per week (around €321 per month). As regards the state pension, it stood at £102 (€490 per month).”
Britain was one of 38 countries criticised by the committee on Wednesday, all of whom were found to have violated the regulations in some manner. Other countries were deemed to have made more breaches.
Duncan Smith said: “This government has made great strides in fixing the welfare system so that spending is brought under control. It’s lunacy for the Council of Europe to suggest welfare payments need to increase when we paid out £204bn in benefits and pensions last year alone.
“Whether for short-term needs or longer-term support, millions of people find that the welfare system provides a valuable and fair safety net when they need it most. And thanks to the triple lock, pensioners are now benefiting from a state pension that represents the highest share of earnings in over 20 years. This is meaningful support helping people every single day.”
> It’s interesting to speculate about whether IDS actually believes the stuff he spouts. He certainly seems to get very touchy when anyone contradicts him.
I suspect he currently falls into that grey area of insanity – not quite insane enough to be sectioned, but on the other hand, if he was already inside an institution, they wouldn’t let him out.
Source – Welfare News Service 29 Jan 2014
Successive Government policies that unfairly target the young are making this the worst time to grow up in decades, campaigners say.
High levels of youth unemployment, increased university tuition fees and the difficulty of getting a mortgage have been cited as problems affecting young people, along with changes to the benefit system and cuts to youth support services.
People working with young people in the North East say they are being disproportionately targeted in the Government austerity cuts so that Ministers can protect older people who are statistically more likely to vote.
And there have been warnings that the situation is creating a “a generation without hope” who do not feel part of society.
Liz Emerson, co-founder of the Intergenerational Foundation, a national charity set up to ensure fairness between the generations, said: “This is the first period in recent history where children will have worst standards of living than their parents and their grandparents.
Successive Governments have put the interests of older generations before the interests of younger ones. They’ve taken away the EMA, they’ve taken away Sure Start schemes for young people, they’re taking away their travel concessions.”
Concerns about the young being unfairly targeted came earlier this month when Chancellor George Osborne signalled benefit cuts for the under-26s just a day after Prime Minister David Cameron said he would “triple lock” the state pension, which accounts for half of all welfare spending.
Jeff Hurst, who runs the Newcastle YMCA and is vice-chair of the city’s children’s trust board, said: “I was brought up in a generation where anything was possible and everything was positive. Now we are creating a generation without hope.
“What I see is fantastic young people who are motivated, who are clever, who are innovative who are able, but who are very frustrated.”
Mr Hurst said the combined effect of higher pension ages, more graduates, and a flood of axed public sector workers were squeezing the young out of the labour market until far into their twenties.
The situation is particularly acute in the North East, which has the highest rate of youth unemployment at nearly 24% and the worst score of any region on the Intergenerational Foundation’s age fairness index.
Geoff Mount of the charity Barnados, which has a number of youth projects in the region, said: “Times are tough for young people. Funding for courses is being cut, young people now are having to take out loans, and EMA has been taken away. We’ve got a bursary scheme in place but that doesn’t meet in my opinion the needs of those young people in greatest financial need. There are fewer job opportunities out there than ever before.”
Workers also cited a squeeze on housing, with last week’s ONS figures showing a quarter of 34-year-olds are now living with their parents.
The number of “boomerang children” has soared by 25% in the last 17 years, despite the youth population remaining the same, with under-24s in the North East the least likely in the country to have a mortgage.
Source – Newcastle Journal, 27 Jan 2014