Posts Tagged ‘poverty’

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One point one billion

January 9, 2013

The coalition government doesn’t like the additional income tax rate of 50% on people with incomes of more than £150,000 a year. It says that the previous government’s estimates of the yield were wrong and published a detailed paper reviewing the actual amounts raised, to support its argument that the rate should be reduced from April.

The detailed report is here and if you will be kind enough to turn to page 39 and look at table 5.3 you will see that the adjusted figure for yield in 2010/11 is £1.1 billion.

In other words, if I’m reading it right, the government says that the additional rate didn’t bring in the five or so billion that Labour had suggested, but it did bring in £1.1 billion.  The conclusion (paragraph 5.64 on page 45) agrees:

Although the estimates are subject to a wide range of uncertainty, they suggest that the underlying yield is much lower than originally forecast, possibly only raising £1 billion at most.

Now, there was some comment yesterday during the debate on the Welfare Uprating Bill, because the Impact Assessment hadn’t been published till a couple of hours before the debate, so the information in it couldn’t really be used to inform the discussion.

Let’s look at it now, shall we?  Here it is: and, oh look!  Here’s what it says about the yield (the amount of money the government will “save” by not uprating benefits to keep pace with inflation)

Overall, it is estimated that savings to the Government from up-rating certain benefits by 1 per cent rather than by the CPI inflation rate, will be around £1.1 bn in 2014/15 and £1.9bn in 2015/16 in cash terms.  The savings will continue into the future and gradually increase in cash terms.

Of course it’s not a straightforward comparison – if it were, would even this coalition think that spending £1.1 bn on tax breaks for those earning over £150k was so important they’d take £1.1bn off of people working in low paid jobs and earning tax credits to pay for it… would they?  The £1.1bn from the top rate tax is the adjusted estimated total yield from the tax and not the total estimated reduction in tax take due from reducing the rate.  But if you look here at the tax information and impact note for the rate change you’ll see that the government aren’t really sure what the effect of reducing the rate will be, which is of course entirely in tune with their argument that we aren’t really sure what the tax brings in in the first place.

The impact assessment, of course, is a tool of evidence-based policy-making, and on these documents the evidence looks a bit uncertain to me.  Is the argument made?  Time will tell.

But in cash terms, what we seem to be talking about is whether incentivising the 300,000 people who pay additional rate income tax by giving them a tax cut of five p in the pound for their income over 150k is more important – more useful to  society?  More likely to get the economy moving?  More just?  More fair?  More… civilised?  Than taking it from people on job seekers allowance because there are no jobs, or on working tax credit because the jobs that exist are low paid?  It seems to be a question of priorities rather than evidence.

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Use the mike

July 31, 2012

Yesterday I went to Sheffield station to buy some railway tickets.  My mother is deaf, so she doesn’t like to transact on the phone, and she’s in her eighties, so she’s not comfortable transacting on the internet.  So we jumped in a cab and went down to the station so she could renew her senior railcard and buy the tickets for us both to go down to London next month to see the Queen’s Diamonds.

There’s a sound system in place, so when we finally made it to the counter she set her hearing aid to the T setting and was able to hear the clerk (although she couldn’t, then, hear me, standing next to her, and had to switch back and forth).  But after she’d done the railcard transaction and we’d selected the dates and times we wanted to travel, the clerk told us the price.

“Sorry, I’m not hearing you,” I said.  The clerk gave me That Look – you know the one.  The “are you stupid or something” look.  And repeated what she’d said, at exactly the same volume.  Just move the mike, I thought – I could hear the guy at the next counter, perfectly loud and clear, because he had the mike an inch from his mouth and the volume turned up.  But this lady obviously didn’t think using the mike was necessary.  “Sorry, I still can’t hear you,” I said, and again got The Look and another repetition, this time with an eyeroll.  My mother, being of the “don’t make a fuss” generation, simply put her credit card into the machine, paid the amount we couldn’t decipher, and we checked it all later.  No big deal, right?

Well, have you ever tried to get your employer to make a reasonable adjustment to your working conditions on account of a disability covered by the Equality Act?  If the simple action of getting someone to use correctly the equipment that’s already there is a problem, imagine what it would be like trying to educate your employer on what their duties are and your reasonable requirements might be, while you were feeling ill in the first place.  I’m exaggerating?  I’ve just written and then deleted (because they aren’t my stories) a paragraph detailing three different examples I know of from my personal acquaintance of people who have had grotesque difficulties getting different employers to abide by the law in the last year; partly because, when you’re ill, you’re not really in a good place to provide a teachable moment to your employer in the first place, let alone the assertiveness to insist they comply with the law that’s in place for your protection.  It’s easier to be quiet, don’t make a fuss, make do.

Living with a disability must be hard.  Working with a disability is hard enough when you acquire the disability after you acquire the job, are a valuable source of knowledge and ability for your employer, and know and exercise your rights.

Well, what about Remploy, the business that employs workers with disabilities in an inclusive environment?  Oh, yea, being shut down.  Because, apparently, there are better ways of supporting people with disabilities in mainstream employment.

OK.  But what IS that support?  Well, if you were watching anything except the Olympics last night, you’d have seen either the Dispatches programme: Britain on the Sick or the Panorama programme, Disabled or Faking It?  Both programmes showed DWP film of people who had been prosecuted for faking disabilities but reminded us that this amounts to less than half a per cent of the people actually claiming disability allowances.  The real problem identified by both programmes was the mechanism the government has put in place to assess whether people needed to be “on the sick” or were “fit for work”.  Dispatches concentrated on ATOS and secretly filmed a GP taking the ATOS assessors’ training.  Panorama concentrated on the claimants – including the gentleman found fit for work while he was sectioned under the Mental Health Act!  Lucy Mangan spoke for me and, I believe, for millions watching, when she wrote in the Guardian:

‘Why don’t you just stop it,” you wanted to say. “Just stop doing this cruel, pointless, terrible thing to people. Stop adding to the sum of human misery in the world and start working for our betterment instead.”

Because it was all about finding people were capable of work – if they had one finger they could push a button, if they could sit or stand they could work a checkout, if they could theoretically propel themselves in a wheelchair they were mobile, even if they didn’t actually have a wheelchair.  And while I see the government’s argument that it’s better to think about what people can do rather than what they can’t do, none of this amounts to a hill of beans if there isn’t a job for them to move into, an employer willing to take on a one-fingered, invisible-wheelchair-using person.
One final thought.  Chris Grayling said that “there are no targets anywhere in the system“.  In other words, ATOS don’t have a fixed target of people to find fit for work (or, unfit for financial support).  This is a pusillanimous equivocation.  There may not be a “target” – find 12% of them fit for work or we sack you.  But there is an “average“: the average number of people found fit for work is 12% and if you’re outside of the average you’ll be audited.  And then look at table 1 on page 36 of the 2010 Budget Costings document which shows the expected exchequer impact of “reforming (sic) disability living allowance”.   Next year we’re taking £360 million from sick people and, the year after, £1,075 million.
Well, not in my name.  If this makes you, too, into an #angrycitizen, take a few moments to sign the epetition here.  And write to your MP.

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Working hours

April 11, 2012

I have great difficulty working out the reasoning behind increasing the number of working hours necessary for someone to claim tax credits.

Whatever the reasoning, in the tax year just started some of the poorest working families in the country are going to… get poorer.  Because if you are working 16 hours a week at a badly paid job you will lose your tax credits, whereas if you are working 24 hours you will keep them.

Well, work is supposed to pay, and I suppose that one reasonable policy objective might have been to have people increase their hours – to wean themselves off of benefits and into work.  In the current climate, however, is it actually realistic for people to go to their boss and ask for more hours?

So here’s a thought.  How about self employment?

No, I’m not being facetious.  I’m suggesting that there are a couple of simple ways that someone on tax credits could boost their hours by taking on some kind of spare time work that fits in with their child care and other family responsibilities.  And self employment does count towards the tax credits threshold.  Make sure you inform HMRC of the hours you *intend* to work when you start up, and then tell them how many hours you *did* work at the end of the year.  So the first thing to do is pick up a notebook and write down every hour you spend on self employment activities, as well as every penny you spend on it, and every penny you make from doing it.

But what sort of self employment can someone with childcare responsibilities and no capital hope to undertake?

Well, how about internet trading?  HMRC themselves have started to crack down on people who trade on eBay, as opposed to people who use eBay to sell off the rubbish they’ve found in the back of the wardrobe.  HMRC has a useful guide here: but don’t be put off.  You don’t need to register with eBay as a business seller in order to be IN business – you just need to be selling stuff you didn’t already own, with the objective of making a profit.  And you don’t necessarily need to MAKE a profit, so long as you’re trying your best to make a profit.

So you could start with something you already owned – old clothes that don’t fit? That ornament you’ve always hated?  The teapot that you’ve had for ten years but can’t remember ever actually using?  But then when you’ve sold it, use the money you get for it to buy something else – go to a charity shop, a car boot sale, or even one of the internet sites where people give away the stuff they don’t want any more, like Freecycle – and then sell that.

The important point, for your tax credits, is that you need to spend enough time doing it to bring your hours back into the tax credit bracket.  If you’re doing 16 hours and the threshold is 24, then you need to be working at your self employed business for 8 hours a week.

I can’t give financial advice and I am not a tax credit expert, but it seems to me not impossible to lift yourself back up into the tax credit zone with self employment.  The essential thing to do is to keep a note of what you do and when you do it.

If you have access to the internet at home, then how about using your favourite tv programmes as a guide?  Coronation Street is on for two and a half hours a week, Eastenders for two and Emmerdale for three hours.  So if you had a computer at home and were on the eBay site during the soaps uploading details of your goods and answering queries from buyers, then you’d have worked for seven and a half hours a week already.  Add in a trip into town to shop at the charity shops for more stuff, not to mention a couple of trips to the post office to post the stuff you’ve sold (and the time you spend packing them up safely and addressing the parcels) you can see you could clock up eight hours working time relatively painlessly.

If you don’t have a computer at home, you’d have to do your eBaying at the local library so don’t forget to include travel to and from the library as well as the hours you spend at the computer.  Write down when you go and when you come back – so you can prove your hours – and how much you spent to get there.  No need to save the bus tickets, but if they have the date and time on them they might come in handy so stick them in a cardboard box somewhere and hang on to them.

In an ideal world you would need to own a digital camera or a phone that takes pictures, so that you can sell your items with photographs, but if you don’t have one you can still have a go on eBay.  You could then use any money you make from selling stuff without photographs to buy yourself a cheap digital camera and make it easier to trade the next time.  Here’s one on eBay for £2.49 plus £2.49 postage and packing, for example.

I don’t know.  I can’t see anything in the HMRC rules that suggests you can’t make up your tax credit hours through a combination of employment and self employment.  Yes, you’d have to tell HMRC you were self employed; you’d have to pay national insurance, and you’d have to prepare accounts at the end of the year and fill in a tax return.  None of this is as difficult as it sounds: if you count up everything you make on eBay and it comes to less than £73,000 (and, let’s face it, if you were making that much you wouldn’t need tax credits in the first place!) then you only have to prepare three line accounts where you would literally just need to add up how much you’d made from selling stuff on eBay – which you would have written down in your notebook every week – and put that in the line for “turnover”.  Then add up all your expenses – which you will also have written down without fail, every week, every penny, in your notebook, yes? – and that goes in the “allowable business expenses” line.  So your bus fares to the library, the amount you spent buying a digital camera, the money you spent on brown paper, padded envelopes, sellotape and stamps, and anything you spend in the charity shop buying stuff to sell, all gets added together as “allowable business expenses”. You can also add a small amount for the electricity and lighting and heating you use when you use part of your home for trading – perhaps a tenth of the total as a rough guide, or you can work it out more scientifically based on the number of hours you worked.

Oh yes, and one more thing – if you don’t have a computer of your own and start self employment using the one in the library, make sure to save up your takings in your paypal account till you’ve got enough to buy one of your own.  Because you can set off any asset you use wholly and exclusively for business purposes against tax.  Yes, work eight hours a week as an eBay trader and not only will the government carry on paying your tax credits, but they’ll let you buy yourself a computer out of money you would otherwise have paid in tax.  What’s not to like?

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