News - DLA Help Group

Benefits Uprating Bill 3rd Reading Monday

THE WELFARE BENEFITS UPRATING BILL – ONE MORE LAST STRAW

This Briefing is written in support of all amendments to the bill which will prevent limiting benefit up-rating to 1% for the next three years

The problem for the poorest citizens in the UK isn’t the welfare uprating bill on its own but the fact that is the latest in a long line of welfare reform. The last straw could well be the decision of Parliament to limit increases in benefits to 1% for three years while prices of necessities are escalating. This comes on top of the decisions of local government to tax benefits with 8.5% - 22% of council tax or around £3 to £8 a week, in addition to the cuts and caps. Single adult households, the parents of disabled children and pregnant and nursing mothers and their babies will suffer ill health. Taxpayers will bear the increased costs to the health service and the schools. The Department of Work and Pensions claim that people will always be better off in work than unemployed when they introduce the Universal Credit; if it happens it will be more to do with freezing the increase in unemployment benefits for three years than in providing a living wage in work. The coalition throws hand-grenades into local government finances and the welfare system and then stands back to admire the damage.

BENEFITS INCREASING MORE THAN WAGES?

Grant Shapps, the Conservative minister without portfolio, tells us: "Since 2007, the pay of those working in the private sector rose by 12 per cent and at the same time benefits going to working age claimants increased by twice that amount." That needs some qualification. Research by Professor Jonathan Bradshaw of York University has shown that the £71 a week job-seeker's allowance paid to single adults from April 2012, has not increased in real terms for decades. When it started in 1912 it was seven shillings a week, about 22 per cent of average male earnings in manufacturing. By 1979 it was still about 21 per cent of average earnings. By 2008, as a result of the policy of tying benefits to the price index while real earnings increased, it had fallen to an all-time low of 10.5 per cent of average earnings. It has not increased in real terms since then. The amendment that proposed benefits be increased with average earnings will have a lot of catching up to do! The government repeatedly state it is not fair for the incomes of people out of work to go up faster than the incomes of people in work, but increasing £1 by 1% is a slower cash increase then increasing £10 by 1%.

THE ROOT OF THE PROBLEM OF POVERTY IN THE UK IS JOB SEEKERS ALLOWANCE

So the problem begins with the deeply inadequate £71 a week JSA after rent and council tax for a single person aged 25 - 60, £56.25 aged 18 - 24, and £111.45 for a couple up to 60 years old. They are the adult benefit whatever the number of children in the family, whose benefits are added to them. They will be the standard amounts of the Universal Credit. Donald Hirsch, Director of the Centre for Research in Social Policy at Loughborough, and in charge of the JRF minimum incomes standards research, sent me the following comparison with JSA of the weekly minimum cost of food+fuel+clothing+transport at April 2012 taken from the Joseph Rowntree Minimum income standards research. They are all above IS/JSA rate, and have risen from 22% to 29% more than a single person would receive at the adult rate. The 1% increase will reduce their value further.

MIS SINGLE PERSON PER WEEK	2008	2012
Food	£40.34	£48.25
Fuel	£9.00	£11.63
Clothing	£7.64	£9.31
Transport	£17.03	£22.39
Foot+fuel +clothing+transport	£74.01	£91.58

IS/JSA	£60.50	£71.00
IS/JSA 18-24s	£47.95	£56.25

	2008	2012
Food+fuel+clothing+transport as a % of IS/JSA	122%	129%
Food+fuel+clothing+transport as a % of IS/JSA 18-24s	154%	163%

A 1% FREEZE ON TOP OF THE LOCAL GOVERNMENT FINANCE ACT AND TAXING BENEFITS

I am using the proposals of Haringey Council to tax benefits with 20% of the council tax as an example of the cumulative impact of council tax, LHA cap and the overall benefit cap. The council’s analysis shows that there are 6837 adult claimants receiving job-seekers allowance at £71 a week up to the age of 60, and 476 unemployed couples with two children with JSA at £258. They will have to pay from £3.18 a week to £7.43 a week council tax. That £71 a week and that £258 also have to pay the rent not paid by the capped housing benefit and unpaid rent due to the coming £500 overall benefit cap. In the Borough of Haringey: ·       73 individuals will have to pay between £41.43 and £158.01 a week, out of £71 a week, due to the cumulative impact of CT plus overall benefit cap. Many will be between 40 and 60 years old. ·       49 couples with two children will have to pay between £72.40 and £255.24, out of JSA of £258 a week, due to the cumulative impact of CT plus overall benefit cap. That will multiply into several 1000s of households when the numbers affected in all wards in England and Wales are added up.

COUNCIL TAX ARREARS, UTILITY AND OTHER DEBTS AND THEIR ENFORCEMENT

Reducing the value of benefits and then taxing them will increase council tax arrears. Non-payment of council tax means the councils summon the non-payer to a liability order hearing at the Magistrates court adding between £70 and £120 to the council tax arrears. The summons contains the following threats, in bold type and highlighted. Thousands are and many more will be dispatched daily.

If a liability order is granted the council will be able to take one or more of the following actions:

·       Instruct bailiffs to take your goods to settle your debt - this can include your car.
·       You will be liable to pay the bailiffs costs which could substantially increase the debt.
·    Instruct your employer to deduct payments from your salary or wages.
·       Deduct money straight from your jobseekers allowance or income support.
·       Make you bankrupt.
·       Make a charging order against your home.
·       Have you committed to prison.

The bailiffs can add anything up to £400 + to the defaulters bill. The magistrates approve 1000s at a time. Neither they nor the council officials know the circumstances of 90% of the defaulters; some of them could be dead and no one will know until the bailiff calls. Baroness Meacher tabled an amendment to the Crime and Courts Bill for Z2K requiring council officials to know the facts and circumstances of non-payers before they apply for a liability order; we have been promised guidance by Baroness Hanham, but we have not seen it yet. In reality the councils and courts will be clogged up. There will be no time to consider the details of each case.

PERSONAL DEBT AND MENTAL ILLNESS

The Government Office for Science in their 2008 Foresight Report “Mental Capital and Wellbeing” highlighted the relationship between mental health problems and debt. Z2K, the Royal College of Psychiatrists (RCP) and the University of Brighton are suggesting that creditors, jobcentres and local authorities are making people ill enforcing debts which been caused by government policies or lack of them. The RCP has reported that 50% of people in debt have a mental health problem and 25% of mentally ill people are in debt. The Centre for Mental Health has estimated that mental illness costs the economy £105 billion a year.

FAMILIES WITH DISABLED CHILDREN

The Haringey council tax proposals make no mention of the problems facing the parents of disabled children. Neither does the Welfare Benefits Up-rating Bill. The report ‘Counting the Costs 2012 - The financial reality for families with disabled children across the UK’ from the charity Contact a Family has been sent to the council. It states as its key findings that of the survey of 2,312 families with disabled children across the UK:

·       1 in 6 (17%) is going without food.
·       More than 1 in 5 (21%) is going without heating.
·       A quarter (26%) are going without specialist equipment or adaptations.
·       86% have gone without leisure and days out
·       Almost a third (29%) have taken out a loan - 39% for food and heating
·       1 in 5 (21%) have been threatened with court action for failing to keep up with payments – the majority for missing utility bill payments (46%)
·       Over one in ten (11%) have already been affected by benefit changes.

POOR MATERNAL NUTRITION BEFORE AND DURING PREGNANCY AND THE CONSEQUENCES FOR THEIR BABIES

The Institute for Brain Chemistry and Human Nutrition at London Metropolitan University is a leading centre of research into the importance of human nutrition and health. Its research is led by Professor Michael Crawford, who has established a relationship between poor maternal nutrition and low birth-weight before conception and during pregnancy. By way of example, three wards in Haringey had among the highest rates of low birth weight between 2007 and 2009; compared to a national average of 7.53%, Tottenham Green recorded 12.5%, St Ann’s 9.4% and Haringey 11.62%. The average for Haringey is 7.63%. Although obesity has attracted much attention, brain disorders have now risen in cost to €386 billion for the 25 EU, overtaking all other burdens of ill health. In the UK the cost was £77 Billion Data from Dr. Jo Nurse, Mental Health Division of Department of Health, presented Westminster July 27^th 2008 (now £105 billon PN) which was greater than heart disease and cancer combined. This is now the most serious but unrecognised threat to health and the future of society.

·       The incidence of low birthweight a hall mark of future physical and mental ill health has risen since 1973 in the UK;
·       In 1972 it was predicted that brain disorders would rise following on the rise in death from heart disease. The prediction was based on similar nutritional requirements for specialised dietary fatty acids and their associated nutrient cluster. That prediction has now been realised.
·       Although the national diet improved during the last century, a fundamental flaw crept in the last 4 decades because of a lack of knowledge on the requirement of specialised fats for the development and health of the brain and arteries.
·       Several national and international expert committees on diet and health have commented on the flaw. However, little action has been taken because of want for of relevant knowledge.
·       The required recommendations have been voiced by the Black, Acheson and Wanless reports with the exception of addressing fundamental flaws in the food chain.

·       It now requires bold, interdepartmental initiatives by government and local governments on food production, distribution, public and school education and investment in prevention by the NHS and research councils which currently prioritises drug development. Steve Webb MP, said in a Child Poverty Bill debate on minimum income standards about the total inadequacy of adult unemployment benefits, and the effect on children of the consequent poor maternal nutrition before and during pregnancy: "When we heard evidence, it was pointed out that a young woman under 25 is allocated £50.95 a week (Now £56.25 - PN) to live on, but evidence suggests that £43 (£48 – PN) a week is needed for food for a decent, healthy living standard. Fuel and other bills cannot be paid from the remaining £7-odd, so young women in that age group who are on benefit are, by definition, eating less than is healthy for them. If they then become pregnant, they will at that time have been eating unhealthily. Budget standards and minimum income standards would enable us to consider what such young women need for a decent standard of living, and to make that the benchmark. Fiscal considerations would determine whether we hit the benchmark, but not knowing what the benchmark is unacceptable and inexcusable." Hansard, column 363 November 3rd 2009. A food bank will provide food for three days only then they are hungry again, no help in a nine month pregnancy.

   CONCLUSION

It is clear from the evidence of the reducing value of unemployment benefits following years of neglect by successive governments, plus the imposition of council tax on benefits and their draconian enforcement, that the high rates of low birth-weight in the UK cannot be disconnected from the decades of diminishing value of their unemployment incomes putting healthy nutrition at risk. Reducing the real value of statutory minimum incomes on top of cuts, caps and tax creates misery for the claimants and billions of costs to the tax payer in the health service and the schools.

Rev Paul Nicolson
Chair, Zacchaeus 2000 Trust,
34 Grosvenor Gardens
London
SW1W 0DH
020 72590801
020 83765455
Paulnicolson@z2k.org