The Wonga budget

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According to Jonathan Freedland in the Guardian Robert Peston of the BBC called the spending review 'the Wonga budget'. He was right to do so. The plan to make people wait seven days for benefits after signing on as unemployed is a complete gift to the predatory lending market.

Osborne's claim was that people should not be allowed benefits for seven days after losing a job because they should be using that period to find another job. There are at least three fundamental flaws to that logic.

The first is that jobs are instantly available. Maybe has hasn't noticed there are 2.5 million people unemployed in the UK. Or perhaps he really does believe that they are all, actually, voluntarily not working as his neoliberal economist chums assert to be the truth.

Second, he assumes that you can pick yourself up after losing one job and immediately find another. This denies the obvious point that people often have a shock reaction to losing a job, and need to adjust to that fact before they can move on. Perhaps George has never known someone who has been made redundant.

And third George assumes people have savings. The following table comes from the ONS survey on wealth in the UK for 2006-08 and covers the lowest three deciles of wealth holders in the UK, who are of greatest concern here:

Screen shot 2013-06-27 at 09.32.03

Net financial wealth for 30% of the population is negligible or negative. That's  a fact. But Osborne says that despite that they cannot have benefits for a week when losing their jobs - and some people now, inevitably, move in and out of work often due to the nature of the 'flexible' job market. These people have no reserve to call on in that situation, but Osborne is going to penalise them anyway.

That is an act of deliberately inflicted malicious harm that will drive people, as Peston predicted, into the arms of the waiting predatory lenders.

It's ironic that the Office of Fair Trading is, according to reports, planning to investigate that market. I'm not sure why they're bothering: Osborne's about to give it an enormous boost.

 


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