David Cameron gave a barnstorming speech at Conservative Party conference. His spin doctors claimed he had shifted to the centre ground as the PM announced a great movement of social reform and an “all-out assault on poverty”.
The reality is, of course, very different. In December letters from the HMRC will land on the door mats of 3,700 Hemel families who have low or medium incomes and who rely on tax credits to make ends meet. The letters will give details of the amount between £1,000 and £3,000 that households will lose in April. Mums and dads will have to explain what that means to the 7, 200 children that live in those homes. Merry Christmas.
We’re not talking about people on the dole here. We’re talking about teachers, nurses, policemen, librarians, gardeners, mechanics and electricians. People like you and me who sometimes rely on in work benefits to make ends meet as wages have stagnated because of the financial crisis. Public sector employees haven’t received a rise in donkeys while prices have continued to rise and now their wages have been capped for another four years.
Research by Unison found that 2.7 million low to middle income working families will be affected across the UK. The Institute of Fiscal Studies says 700,000 additional children have been pushed into poverty since the Chancellors emergency budget in June.
The response from the Government is that they are introducing a National Living Wage to drive up wages paid by employers and raising the tax threshold in order to reform the welfare system.
But the reality is that any raise in the minimum wage won’t kick in fully until 2020 while the cuts become a reality in April next year and any rises don’t include weighting for people who live in places like Dacorum where rents and house prices are spiraling out of reach.
Estimates are that reforms will simply not cover the loss of income. Adam Corlett of the Resolution Foundation says “While the chancellor’s new wage floor will give a welcome boost to millions of Britain’s lowest-paid staff, it cannot guarantee a basic standard of living or compensate for the £12bn of welfare cuts that were announced alongside it.”
Reforming the welfare system and creating well paid jobs is important but is what the Tories are inflicting fair? In the same budget inheritance tax changes were announced which gave a £175,000 tax-free allowance on top of the existing £325,000 allowance for homes over £1m. This allowance is worth £1bn to the public coffers. Isn’t that a tax credit?
So when you hear about Cameron’s crusade or Mike Penning telling people he’s here to represent everyone, remember, it’s not what you say, it’s what you do that counts.