Sunday 13 January 2013

Sunday, January 13, 2013 Posted by Jake 6 comments Labels: , , , , ,
Posted by Jake on Sunday, January 13, 2013 with 6 comments | Labels: , , , , ,

We are told not to be harsh on bankers because most bankers are not reckless rogues (just the ones in the board rooms and on trading desks). Having crashed the World economy in 2008, the bankers promised to behave better, lend more to businesses, and accept new rules to reduce the risk of them going bust. They didn't behave better (e.g. LIBOR rigging); they screwed businesses (e.g. IRSA scams); and now they have wriggled out of the tighter rules (generous bank lobbying has resulted in liquidity requirements being greatly relaxed). Banking robbers dodging weak kneed regulators: not much of a surprise here.

We are told not to despise MPs because some of them didn't fiddle their expenses. They have continued to fiddle (e.g. they can't claim the cost of mortgages on their flats anymore so they swap them and claim rent that they pay to one another); in December 2011 they argued for an extra £20k in allowances; and in January 2013 they dumped their expenses regulators. In a survey of MPs done by IPSA and published in January 2013 "69% of MPs questioned think they are underpaid and, on average, they suggest a MPs’ salary should be £86,250.", a 32% payrise. Pompous MPs patiently manoeuvring for a big payday: not much of a surprise here.

With all this forgiveness for greedy bankers and grasping MPs, we are told it is necessary to punish the unemployed because while the rest of us trek to work of a morning the sofa-surfing-skivers are eating hot buttered toast dunked in cheap gin.

The debate about benefits cuts has been focussed on the "Strivers and Skivers". With the "Skivers" allegedly pocketing vast amounts of taxpayers' money to fund their skiving. The government has decided that by getting the money out of the skivers, they can afford to cut the top rate of tax (already done) and not impose a wealth tax (determinedly not imposed). 

The lie is exposed by figures from the Office of National Statistics and the Department of Works and Pensions that show less than 1% of all benefits spending is paid to possible "Skivers". And yet it is the whipped up contempt for the skivers that is used as a smokescreen to attack all benefits and deflect the public's attention from handouts to the very wealthiest.

So, lets look at the figures:

a) Are the unemployed "Skivers"? 
Answer: The Office of National Statistics figures on duration of unemployment shows that fewer than 1 in 5 claimants have been unemployed for more than 24 months. 7 in 10 have been unemployed for less than a year. 

Duration of unemployment jumped after 2008, due to the banker induced crisis. Skiving among the unemployed no doubt happens. But no more than skiving among the rest of us. And at work we can have free cups of tea and colleagues to chat with.

b) Is Job Seeker's Allowance or is Incapacity Benefit a significant part of the overall benefits bill?

Answer: The Department of Works and Pensions figures show that Job Seeker's Allowance is about 3.5% and Incapacity Benefit is about 2% of the total expenditure on benefits in 2011/12.

So Incapacity Benefit plus Jobseeker's Allowance added together make up 5% of the benefits bill.  And even making the ridiculous and offensive assumption that anyone unemployed for over 24 months is "skiving", even then just 1% of benefits go to pay "skivers" to be unemployed. And yet "skiving" is the incitement to justify cutting benefits. Pay for the deficit, created by reckless bankers, by making cuts to the poor. In the words of the Governor of the Bank of England, Mervyn King:

Mervyn King, Governor of the Bank of England, in evidence to the UK Parliament’s Treasury Select Committee, March 2011.

Although greedy bankers and incompetent regulators crashed the World economy we are told to go easy on them. Although MPs disgraced themselves with fraudulent expenses and the subsequent failed cover-up we are still expected to regard them as "honourable" and "right honourable". Although we are required to forgive the bankers and politicians, the 1% of benefits going to skivers is an excuse to attack all benefits!

The economic crisis is being used as a smokescreen to erode the economic position of the 99% increasing the share of the 1%. Employment rights; pension rights; right to free health and education; pay levels... The debt levels of this country are historically unremarkable. The debt could be paid off by a tax on the wealth that accrued to the 1% during the various booms. 

(ONS data for "Breakdown of aggregate wealth" available here and here).

Austerity is a smokescreen to erode the share of the nation's wealth of all us ripped-off Britons.

With the attack on benefits the government is following the advice on eating whales: do it one bite at a time.


  1. The Benefits Bill graph is interesting, the under lying data more so. Do check out the "Budget 2012" file.

    I feel that that graph only points to one area of benefit and I'm sure while other areas of benefits go to other sections of society as well as those jobseakers, jobseakers will be a significant proportion of those receiving the other benefits.

    1. You are correct. The original data file has many other benefits which are paid to people regardless of their employment status. That is why benefits paid to working people actually go to subsidise employers who pay less than a living wage.

    2. We reject the use of degrading Politics by privileged people in Westminster wearing expensive suits, making cheap claims about folk who have no voice.

  2. Employers have used tax credits to subsidise low wages since their introduction but those tax credits have gone a low way in cutting out extreme poverty,.. at least they did at the time. With cost of living outstripping rises in the minimum wage, poverty is once again rearing its ugly head. Add to this cuts in both in-work and out-of-work benefits and you have a recipe for social economic disaster. The results of which will take many years to reverse. I support a living wage which would make people better off and also reduce welfare expenditure in areas such as tax credit and even unemployment benefits. There is no better incentive to work than by making work pay more. However, I also recognise that if employers are forced to pay higher wages some of them could collapse under the strain or be forced to employ a smaller workforce - plunging more people on the dole. You could introduce this as a compulsory policy for larger businesses who could afford it and then use savings made to subsidise smaller companies to allow them to increase their wage bill. Whatever way you choose it'll be a delicate balancing act.

    1. Higher wages will create new losers - some businesses will see their wage costs rise. But it must also create new winners - more wages/money spent on other businesses.

  3. Welfare bills are now subsidising:
    housing bubble - build social housing to replace that sold under Right To Buy
    higher utility bills - since selling to private sector & subsidising business rates
    transport costs - since selling public transport to private sector
    the only way to reduce an ever growing welfare bill in a sustainable way is to address these &:
    reduce retirement age & working week so more people share available man hrs & rebalance family life - reducing child care costs
    Stop producing rubbish goods that use up resouces & start prioritising making products that are actually needed.
    obviously it's no more a complete answer than any others offered but everyone will then be contributing & be less stressed - which reduces health bill :)
    It's also necessary to make SURE tax is collected from businesses & high earners.


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