This is analysis from the New Economics Foundation:
Guess what? The Tories have made life more difficult in the UK the lower your level of income is, and have done so with rigorous zeal, leaving just the best off to gain from their Autumn Statement.
What a surprise.
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Well, you don’t bite the hand that feeds you do you the Tories would say.
Interesting analysis but hard to pin this down on the U.K. or any political party. In this week’s Financial Stability Review, the ECB produces very similar analysis (which mirrors BoE analysis).
In many/most advanced economies, we get the same message situation that lower income HHs (1) spend more of their income on essential goods and (2) are relatively more exposed, as a result, to the large prices rises in those goods and services that they spend their money on eg, energy, food etc.
This is a very real problem – rising financial inequality – but it is neither country nor political party specific, in my view.
Listened to R2 yesterday. Thanks for comments. Shame Vine seemed to cut you both off just as it was getting interesting.
Yes, I hoped we would run until 1pm
Have you ever been on Jeremy Kyle’s programme? I’ve just been watching Tony O’Sullivan, co-chair of KONP, trying to explain why £3.3 billion is not enough to keep the NHS going. I am surprised Tony managed to keep his temper.
Hope your long covid symptoms have improved. You seem to have written a lot more today.
No, to Jeremy Kyle, and I am not sure I would want to
The long Covid thing is wearing. It’s usually worst in the late afternoon and evening. The blog is a morning activity
Buried in the footnotes of Jeremy Hunt’s Autumn Statement is a massive tax cut on Bank profits. Surcharge cut from 8% to 3% –
Page 63 Table 5.2 footnote 3
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118417/CCS1022065440-001_SECURE_HMT_Autumn_Statement_November_2022_Web_accessible__1_.pdf
Quelle Surprise
What astonishes me is that c.30% of the electorate are still going to vote Conservative in the next GE. It’s like knowing someone who’s burgled your house and yet you willingly let them in to help themselves every time they knock on your door…!
Whatever the economic disaster created by the dishonest, greed-first Tory mismanagement of the economy and since 1979 there have been so many, the result will be that 90% of the population will be poorer and the richest top 10%, consisting almost entirely of Tories, including the members of the Tory government that created the mess, will be even richer.
This has occurred so consistently that you cannot conclude that it is just the workings of incompetence and chance, it has to have been the real intention.
I despair. When Rachel Reeves was asked this morning (R4), what would you now do if you were Chancellor, she ducked the question! Hasn’t she been thinking at all about that for the last 10 weeks let alone 10 years? When pressed she expressed the need for responsibility and fairness. I can waffle such generalities but I am not the head of the opposition’s economic policies! Hunt can now play you-said, we did … until the next election and he will be right. Tories have done what Labour said they would do (pretty much) and Labour has no economic vision of a different future. R4 Today (was it Andy Verity?) described Hunt’s Autum Statement as very like New Labour.
It is like NL
Am I right in thinking the cap on social rent increases more or less cancels the extra council tax local authorities will be able to raise for social care? I haven’t seen any comment on this but given the recent scandals about the condition of council housing (never mind building any more), I would have expected to have heard at least a ripple of despair from local government – have I missed/misunderstood something?
I honestly don’t know
Sorry….
But most social renting is not by councils
Nicola
Social landlord rents pay only for one thing – the housing service – housing management of tenancies, day to day repairs, estate management services, programmed improvement works and newbuild. Housing Associations will show this on their accounts; local authorities (LAs) run what is known as a ‘housing revenue account’ (HRA). In 2012, the Tories stopped requiring LAs to send their surpluses into Westminster so now all LAs run their HRAs as their stand-alone business accounts capitalising their operations through them.
Housing Associations and LAs just provide housing – although some have also diversified into areas like social or extra care, but these services would be paid for as extra service charges. They would collect the care charges and pass them on to care providers or the cared for pay separate bills to their caring providers as well as paying rent. There are lots of models.
There is no link between other budgets and the HRA. The HRA for example is not allowed to support the general fund and vice versa, nor is it allowed to fund other services like a lot of people think it does.
Even though in 2012, the Tories let LAs keep all their income in their HRAs and this improved the outlook for housing, they still interfere cruelly in the LAs HRAs.
In 2015, George Osbourne limited rent rises to 1% for 4 years – a move to save the Treasury £1.45 billion that led to industry and OBR estimates of cutting new affordable housing delivering by 14,000 – 27,000 units over that period. My LA thinks it needs an 11% rent rise to cover current inflation and the costs of Covid that they funded but we are told that the Government will only accept a 5% rise from April next year. This will cut our newbuild programme – money BTW we’ve already spent on design, planning permission etc., that could be wasted from the HRA that is ring fenced and not recovered from other sources of funding.
HM Treasury also interferes with the HRA, telling us to add a percentage point to what should be our own locally determined rate of return on loans from the HRA to fund new homes. This makes those loans more expensive and retards our new home development plans too. I’m glad I’m not a HRA accountant!
The other thing that has happened is that since Thatcher really, Government has been putting subsidy into the consumption side of housing – using benefits and lax rent controls to entice people into the private sector. There are two rents at play in social housing – target or social rent (the old formula) and 80% market rents – higher than the target rent. The 80% market rent is essentially charging higher rents to pay for the cost of building new affordable housing in lieu of less support for newbuild from Government printed money. Tenants are paying more for a new house which seems to negate why they are there in the first place (low wages etc).
Added to this is the effect of Right to Buy (RTB) and with the Government’s higher discount to tenants since 2010 which means that we have to sell two in order to afford to build a replacement one (if we are lucky!). My LA has lost 1603 homes to RTB since 2010. That and the bedroom tax plus the benefit cap (where year on year, the Tories are reducing the housing element of Universal Credit payments) are causing us huge problems as more UC benefit income has to go on rent and people now have less to heat and eat on, goes a long way in explaining the growth of food banks and kids going hungry at school. It also explains why rent arrears work in social housing is now one of the most stressful parts of the job.
The benefit cap is particularly harsh given that previous Tory administrations were happy for housing benefit to take the strain. They make us use 80% market rents and then insist on capping benefits!! Putting aside the impact on poor and low-income households for a moment, a lot of social landlord business plans went out the window when this lot came in 2010.
Finally, there is Homes England – the Government Agency that gives out Affordable Housing Grant subsidy. At one point the subsidy on offer was as low as £18K per new unit. Lately this has gone up, but you also have to agree to allow RTB or right to acquire. The trouble is that if the grant programme is oversubscribed, the grant rate tends to drop. Homes England also runs ‘Help to Buy’ – another insult in which I know a City trader whose 3 kids all go to private schools get subsidy on a huge new house he bought in Bedfordshire at a grant rate that only we in social housing can dream of. Help to Buy needs to be audited and we need to see how much the rich have been helped to buy what they could already afford.
My thoughts on all this? This is a system designed to make us in social housing falter and fail. It is manipulative and manifestly evil. And therefore, unforgiveable by any measure.
As far back as the 1980’s the great housing academic Alan Holmans was telling us were we not building enough homes for our needs. That’s why we have serious over-crowding, the likes of Grenfell (criminal cost-cutting) and kids dying in mould covered flats whilst executive home sales are doing nicely thank you.
What a country!!
Tell me now: Who will come and relieve us from all of this?
Thanks PSR