The Equality and Human Rights Commission published its final report on the impact of tax and social security changes in the UK over the last few years yesterday. The report was written by Jonathan Portes and my friend and occasional co-author, Howard Reed, in whom I have considerable confidence on this issue. I thought about summarising the report's press release, but it does the job perfectly well as published and so I cross post it here, because it deserves to be noticed in full so shocking are the findings:
Four months after releasing our interim report, we have today released our final cumulative impact assessment, exposing how much individuals and households are expected to gain or lose, and how many adults and children will fall below an adequate standard of living, as a result of recent changes to taxes and social security.
The report, which looks at the impact reforms from 2010 to 2018 will have on various groups across society in 2021 to 2022, suggests children will be hit the hardest as:
- an extra 1.5 million will be in poverty
- the child poverty rate for those in lone parent households will increase from 37% to over 62%
- households with three or more children will see particularly large losses of around £5,600
The report also finds:
- households with at least one disabled adult and a disabled child will lose over £6,500 a year, over 13% of their annual income
- Bangladeshi households will lose around £4,400 a year, in comparison to ‘White' households, or households with adults of differing ethnicity, which will only lose between £500 and £600 on average
- lone parents will lose an average of £5,250 a year, almost one-fifth of their annual income
- women will lose about £400 per year on average, while men will only lose £30
The negative impacts are largely driven by changes to the benefit system, in particular the freeze in working-age benefit rates, changes to disability benefits, and reductions in Universal Credit rates.
David Isaac, the Chair of the Equality and Human Rights Commission, which is responsible for making recommendations to Government on the compatibility of policy and legislation with equality and human rights standards, said:
"It's disappointing to discover that the reforms we have examined negatively affect the most disadvantaged in our society. It's even more shocking that children — the future generation — will be the hardest hit and that so many will be condemned to start life in poverty. We cannot let this continue if we want a fairer Britain.
"We are keen to work together with government to achieve its vision of a Britain that works for everyone. To achieve this outcome it is essential that a full cumulative impact analysis is undertaken of all current and future tax and social security policies. We have proved it's possible and urge the Government to follow our lead and work with us to deliver it.”
As well as calling on the Government to commit to undertaking cumulative impact assessments of all tax and social security policies, particularly in order to comply with the Public Sector Equality Duty, the Commission is also reiterating its call for government to:
- reconsider existing policies that are contributing to negative financial impacts for those who are most disadvantaged
- review the level of welfare benefits to ensure that they provide an adequate standard of living
The announcement comes one week after the Commission submitted a report to the UN's Committee on Economic, Social and Cultural Rights (ICESCR) highlighting that the UK's social security system does not provide sufficient assistance to tackle inadequate living standards.
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What to say except that it’s simply disgraceful and totally avoidable. However, I don’t imagine there’s an iota of shame or responsibility anywhere within the Conservative Party. It will probably deny the facts with some phony reasoning that, in fact, the opposite is true. Precariat? What precariat? I despair 🙁
I’d think it’s highly likely there will actually be great division over this and other matters too. I’d think many in the Tories are there under false political flags and want to see destruction and downfall of certain values and would want that whichever political banner they happened to find themselves rallying under. Destruction like this certainly couldn’t be described as conservative and there will be many within the party who recognise that. It all hastens the end of the party, in my view.
“households with at least one disabled adult and a disabled child will lose over £6,500 a year, over 13% of their annual income”
If £6,500 is 13% of their income then their income is £50,000.
Quite why any household getting that sort of income should get benefits is beyond me.
Have you any idea of the cost of caring for a child who needs nighttime care seven nights a week, for example?
Or for an adult who cannot go to the loo, ever, unaided?
Your comment simply reveals callousness
“Your comment simply reveals callousness”
And complacent ignorance.
While I know that averages are implied in some of these figures I did find that the implied incomes for ‘disabled’ and ‘lone parents’ struck me as being oddly counter-intuitive. I can’t imagine that most of those households would have incomes that are that high.
Marco Fante says:
“I did find that the implied incomes for ‘disabled’ and ‘lone parents’ struck me as being oddly counter-intuitive. I can’t imagine that most of those households would have incomes that are that high.”
Bundling figures together always produces some strange ‘averages’ and also some strange outliers. If one believes the examples featured by right wing media everyone on ‘Benefit Street’ lives the life of Reilly. (Topical reference for St Patrick’s day 🙂
Disability and lone parenting , of course, are not features of any particular socio-economic sector of society. And the causes of both conditions are really quite various.
Andy,
I have little doubt that the median would be quite different.
Dave –
“If £6,500 is 13% of their income then their income is £50,000.
Quite why any household getting that sort of income should get benefits is beyond me.”
Assume there are 2 adults and 2 kids in the household, with both adults earning the same. That makes 2 people earning £25K per annum. After tax & NICs (assuming nothing else lurking in the tax code beyond personal allowances), that’s £1700 per month. £3,400 per month between the two. Take off £300 for pension payments (working on 7.35% of the gross) (I always think like a civil servant)(it’s probably more than that, but hey.), £150 for Council Tax, £200 for travel costs, £1200 for rent/mortgage (I’m definitely looking at outside London prices here), £500 for food/groceries (which is ultra conservative for a family of 4), £100 for utilities, £50 for insurance, £50 for phone/broadband… That’s expenses so far of £2,550. Bare minimum. We’ve not yet considered any luxuries, holidays, birthdays/Xmas/Anniversaries, household repairs/emergencies… never mind the chance to save. To cover all of that, they’ve got income of £850 for the month.
So far, our nuclear family are surviving. No frills, just making ends meet. Now consider the implications of looking after a disabled child.
Chances are, both parents won’t be working – their child will need care. So, if only one of them is earning the £50K household income, that drops the take home amount to about £3075 (only one set of Personal Allowances). That takes the “disposable” income down by £325 to £525 per month. That might be possible (although I seriously doubt it)… but on the basis of the fag-packet means test above, it’s happening in an environment where the family don’t have any money to spend on leisure at all, never go on holiday, and for the children… well, birthdays and Christmas are just things that happen to other people.
But people think “Christ, £50K per year is more than I’m getting… I’d LOVE to be on that per year! Why should I have to pay for these people? It wasn’t my choice for them to have a kid with cerebral palsy”. Short sighted, wicked and wrong.
Just think about these things, will you?
Reading that report it looks like not getting a rise in income is being classed as a loss. To explain with an example, if the personal allowance goes up £2k, then people earning more than that gain 20% or £400. If your entire income is tax free then the disabled household doesn’t get that, and this is marked as a loss of income by the analysts.
However, it looks like losses in income which run the other way are not being classed as gains for the disabled household. An example is public sector workers losing value from their pensions, and retirement ages being uprated. If you are not affected by this, the losses for don’t affect you so should be classed as a gain for the disabled household.
Similarly increased cost of housing due to continued restrictive planning and population rises do no affect people in secure social housing.
Just saying there should be some consistency.
The report is addressing changes
On that criteria I think you’re exposing that they are looking at change
“Reading that report it looks like not getting a rise in income is being classed as a loss.”
This is incorrect. The report looks at changes in taxes and benefits since 2010 relative to a situation where all benefits and tax thresholds are uprated with RPI inflation from 2010-15, and with CPI inflation after that. So the real terms increase in personal allowances counts as a tax reduction (i.e. a net income gain). Households whose real income would have been below where the personal allowance was in 2010 (£6,475) are neither gainers or losers from this particular aspect of policy. However, they lose out from other policies (e.g. real-terms benefit cuts).
Thanks Howard
Kenneth Ash says:
“Reading that report it looks like not getting a rise in income is being classed as a loss.”
Even when the official inflation figure is low it is still inflation. And compound.
So yes. Flat income is a loss. The implications of that loss are very different when the loss is of subsistence income as opposed to a loss in genuinely discretionary spending. It is both a quantitative and qualitative difference and it’s not trivial.
Whereas I think your observations are trivial. I don’t think you ‘get it’.
Perhaps the key is that in the report it says “of their total NET income” (my emphasis). Probably that includes benefits.
Also, “Lone parents in the bottom quintile (bottom fifth) of the household income distribution lose around 25% of their net income, or one pound in every four, on average.
– On average, disabled lone parents with at least one disabled child fare even worse, losing almost three out of every 10 pounds of their net income. In cash terms, their average losses are almost £10,000 per year.”
The figures are a disgrace to any society that considers itself to be caring.
The executive summary is damning.
In terms of the ‘weoponisation of the economy’ this is tantamount to civil war.
Yet, in spite of this, there’s no sign of Labour pulling away from the Tories. Is the Corbyn ‘brand’ toxic with the majority of the voting public? Proves, yet again, the continuing power & influence of the MSM. And, irrespective of his logic, Salisbury-gate will have done him (and the LP) no favours.
“Salisbury-gate”?
I mean, really?
Marco Fante says:
“…“Salisbury-gate”?
I mean, really?….”
Well yes, Marco I’m afraid so.
Face it we’re being daily assaulted with views on ‘Corbynism’ before the man has even got near No.10. How can ‘Corbynism’ be an issue ? It’s an ..ism because MSM says it is.
Incidentally I was particularly amused by the ‘Gate-gate’ incident. When somebody (mercifully I forget which particular arrogant pillock it was) was rude to a policeman on duty at the Downing Street gate.
Haha! Only kidding Marco. An ‘intriguing’ story, nonetheless. Corbyn might yet get his comeuppance.
http://www.taxresearch.org.uk/Blog/2018/03/13/to-russia-with-love/
Phil Espin says:
March 16 2018 at 9:27 am
” …. Craig Murray has posted more detail on the exact form of words May is using to formulate her allegations on the Russia did it narrative: https://www.craigmurray.org.uk/archives/2018/03/of-a-type-developed-by-liars/ ….”.
BTW Andy,
I must admit that “Gate-gate” is pretty hard to beat.
Gategate or Plebgate as it was also know was pretty hard to beat.
It is rather off-topic, but the police seemingly did everything they could possibly do to make something that should have just looked bad for the Government into a situation where the police looked incredibly untrustworthy.
You had CCTV footage released to the media which threw into doubt the police version of events. An email purporting to be from a member of the public sent by a serving police officer who had not been present at the scene (he was subsequently sentenced to 12 months in prison). Not to mention a report from the IPCC which concluded three officers had given a false account of a meeting they had with Mitchell at his constituency office and that the findings of a subsequent investigation had been changed just in time to recommend no disciplinary action be taken against them.
Hello John D,
Yes it seems that Craig Murray has attracted a bit of attention with that theme. N.Dyson sent me this link on the “Russia with love” post:
https://www.craigmurray.org.uk/archives/2018/03/the-novichok-story-is-indeed-another-iraqi-wmd-scam/
I like Murray’s finishing line on the article that you linked:
“I don’t suppose there is any sign of the BBC doing any actual journalism on this?”
Good question. There is plenty of room for this thing to backfire as you suggest. In the meantime this whole thing seems to be playing out like an episode of “The Thick Of It” and that never ends well for anyone involved especially not the government.
Marco Fante says:
(Quoting Craig Murray) “I don’t suppose there is any sign of the BBC doing any actual journalism on this?”
Self respecting journalists at the BBC (if indeed there are any) must be clinging-on to their jobs in the hope that they can, from time to time, slip something past the editors. Otherwise they would have left by now.
Craig’s blog is eye-opening, and confirms my default suspicion that all is unlikely to be what it seems when it comes to events like this. Is it any wonder that ordinary people distrust politicians and the powers-that-be? And that people feel so helpless and apathetic in the face of all this skullduggery, high-level intrigue, manipulation and lies? Yet somehow I still live in hope that we may one day have a government that exists to serve the public good, politicians whose purpose is to serve the people.
Conservatives used the fake narrative of “austerity” to justify a wholesale undermining of the social security system since 2010. But they also played on an even more important mechanic – that of divide and rule. The big problem of a targetted benefits system is that it becomes easy to attack individual benefits in the eyes of the majority of citizens. Why should the unemployed get money when we are all working 50-60 hours per week? Why do we pay disability benefit to people who could get work if they really wanted to, or support single mothers who made their own choice to have children? And what about foreigners coming here to live off the backs of hard working British people? By using these repeated attacks the right have undermined support of the majority for benefits that provide an essential floor for those who cannot earn enough income to live on.
This game will continue without end until we wake up to the inherent power of universal benefits. The fact that Universal Basic Income is made as an equal payment to every citizen transforms our view of welfare. Not only is no-one disadvantaged, but the majority will actually favour increases in payments and fight against any right wing attempts to reduce them, so a system based on UBI becomes politically self sustaining.
The truth is the existing system of welfare is fundamentally unfair. It’s time we stopped means testing the poor for targetted benefits. Our future system must be based on universal benefits to provide a basic income for every citizen, and instead start tax testing the rich to ensure they are paying their fair share of democratically agreed taxes.
Hi Robert,
I particularly agree with the “divide and rule” aspect of that. The really tragic thing is that people on low pay are actually disadvantaged by cutting benefits for the unemployed/disabled. Partly by the reduction of overall demand in the economy (therefore they are more likely to become unemployed themselves) but also because benefits represent a floor below which it is difficult for earnings to go.
It’s a lot like sawing off a branch that you are sitting on!
Neil says:
“The really tragic thing is that people on low pay are actually disadvantaged by cutting benefits for the unemployed/disabled. Partly by the reduction of overall demand in the economy……… benefits represent a floor below which it is difficult for earnings to go.
It’s a lot like sawing off a branch that you are sitting on!”
And eventually the branch is sawn so far through that successively it no longer supports each economic decile until those at the very top also fall. But we can’t afford to wait that long. The ‘efficient market’ mechanism is far too slow and far too costly in terms of human misery.
Robert P Bruce says, amongst other things I am broadly agreement with:
“…It’s time we stopped means testing the poor for targeted benefits. ”
The Labour movement spent most of the 20th Century fighting means testing of social welfare. They made a lot of progress and New Labour undid all that effort without apparently understanding why their forebears had done it. Well, they know now, but I doubt if they care.
As it happens I read only earlier today “Targeting , means-testing or any other system which makes the poor stand apart from everyone else will fail them. Any time in recent history where policies have improved the lives of the poor they have been policies which benefitted everyone – like the NHS. When everyone cares everyone benefits – and when everyone cares it’s the poor that benefit most. This is called universalism and it has improved the lives of the less well off in a way that rationed, means-tested and marketised public services never have.”
It’s an extract from ‘Common Weal’. It makes sense to me.
Compare are contrast this with Philip Hammonds Spring Statement.
Day and night
Good and evil
Truth and sophistry
Noble action and callous lethargy
When will it end?!
Worth also remembering that the Labour Party under Harriet Harman’s temporary leadership did not oppose the Tory cuts. I think Jeremy Cornyn did.
Agreed Rod, at least we have a party leader opposed to austerity.
We have had to wait a very long time for anything other than a neoliberal party leader. We have been a one party state effectively for many years.
Corbyn is the most hopeful event for decades, not perfect, but at least a new beginning. The Overton window has been shifted.
We should support him, he is the only one who will reverse austerity.
He is the pivot upon which change can be made possible, then the Energetic Labour rising stars can drive social change forward. He won’t be around for long, but we need him for the change, ask the young uns, I do. He is the one.
Great blog, I read it every day, thanks to all regulars.
Paul Fcca
John D you are a man ahead of the wave. Salisburygate is probably where it’s heading. Why are May, Johnson and Williamson spouting misleading claims. Nobody has refuted Craig Murray’s testimony and the media are completely complicit. See his blog today.
https://www.craigmurray.org.uk/
I cannot believe the tories are daft enough to want war with Russia but I do think they want to divert the funds that could be used to mitigate austerity straight into our arms industry and dwindling military. Williamson has been on that track for the last few months. £48 mill for Porton Down for agreeing to weasel words is just for starters. Cheap compared to £1 bill for the DUP. Of course Corbyn has had some success with voters and whipping up anti-Russia hysteria and using it to blacken Corbyn with the electorate is a handy bonus. “Standing up to Putin” is depicted as playing well for May in the media, another bonus. Expect it to all fizzle out now the Russians have done their tit for tat expulsions without ramping up.
All we’ll be left with by the Autumn is a clamour that Britain must spend more on defence. Or give up Brexit and join the EU military?
“”We are keen to work together with government to achieve its vision of a Britain that works for everyone… ”
– A forlorn hope: the government in reality has no such “vision”.
No Ken,
But the authors of the report are judiciously selecting a few of the governments own words to back the report’s conclusion.
Its an old trick but fair enough in this case.
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