Thursday, 30 May 2013

Eviction threats increase after launch of 'Bedroom Tax'. It's the poor that's paying for the financial crisis!

Just weeks after the introduction of the Tory 'bedroom tax', many tenants are struggling to pay the increase in their rent and are being threatened with eviction. Thousands are at risk of losing their homes as councils and housing associations have started to take action for rent arrears.

According to a report in the 'Independent' newspaper, nearly a thousand people have received notice of arrears letters in Bradford. In Nottingham, more than a third of the housing association's tenants, now owe money for rent. Tenants in Barnsley and Leeds have been told by their housing authority that their homes are at risk and in Glasgow, Queens Cross Housing Association, have reported that 226 of the 291 tenants affected by the bedroom tax, have been unable to pay.

While many people in Britain are stuggling to make ends meet as the coalition government austerity policies continue to bite, it remains a boom time for those at the top. At a time when they've introduced the 'bedroom tax' and are squeezing the poor, the government are giving tax cuts to the rich. As from April, anyone earning over £1 million-a-year, will now get an annual tax cut of at least £42,295.  And where is the money coming from to pay for these tax cuts, you may ask? What is paying for these tax cuts, in part, are cuts in State benefits and public services. As Michael Meacher MP, pointed out in a letter to the Guardian last May, 77% of the budget deficit is being recouped by public expenditure cuts and benefit cuts and only 23% is being repaid by tax increases. More than half of that tax increase, is accounted for by the rise in VAT to 20%.

Other eminent figures have also pointed out how the rich have off-loaded the cost of the financial crisis onto the backs of the poor. In March 2011, the governor of the Bank of England, Mervyn King, told a Treasury Select Committee : "The price of this financial crisis is being borne by people who absolutely did not cause it." In his BBC Today programme lecture in 2012, he blamed the banks for causing the financial crisis and "expressed surprise that the British people are not more angry with them." Michael Forster, senior analyst at the Organisation for Economic Co-operation and Development (OECD), has said that the UK government have chosen policies that were likely to fall on the backs of poor population groups.

Even though 10,000 families have been pushed into homelessness in the UK following housing benefit cuts and we are seeing 'austerity suicides', the government say that changes to the tax and benefit system will make people better off.  Since the Tory government came into office in May 2010, there has been a five-fold increase in food banks which dispense free food to the needy. This year, some 350,000 people, accessed emergency food aid in Britain.

Its not just people on benefits who are being hit by the Tories slash and burn policies. Far from targeting 'shirkers', the three-year benefit and tax credit cap doesn't mainly target the unemployed. More than 60%  of those who will lose out, are in work. Many people who are in work, are also being scandalously exploited. Pay packets of the average worker continue to fall in real terms, down by 8.5% since 2009. The lowest wage rises on record, were recorded for first three months to March. Full-time British workers also work  longer hours than anywhere else in Europe and often do unpaid overtime. However, the 'think-tank' The High Pay Centre, have pointed out that the typical salary of the chief executive of a FTSE 100 company was now 185 times greater than the average, while the share of income going to the wealthiest one-percent of the popualtion, now stands at 14% compared with 6% in 1979. There are more bankers at Barclays earning more than £1million, than there are executives at public companies across the whole of Japan. Britain is less equal in wages, wealth and life chances, than at any time since the 1920s,

In their book 'The Body Economic: Why Austerity Kills', David Stuckler and Sanjay Basu, have looked at how different countries have managed the recession and how this has impacted on public health. In the book, Stuckler says: "If austerity had been run like a clinical trial, it would have been discontinued". The authors also point out that poorer public health is not a consequence of economic downturns, but a choice by the government of the country, and they note:

"Countries that slashed health and social protection budgets, like Greece, Italy and Spain, have seen starkley worse health outcomes than nations like Germany, Iceland and Sweden, which maintained their social safety nets and opted for stimulus over austerity." They also point out that there are enormous variations in suicide rates across countries.

The authors of this book say that the UK is "one of the clearest expressions of how austerity kills" with 'austerity suicides' on the increase. Yet they also point out that in Iceland, which suffered the worst banking crisis in history when all three of its biggest banks failed and total debt jumped to 800% of GDP, - "far worse than what any European country faces today, relative to the size of its economy" - had voted against paying for the recklessness of the bankers with large cuts in health and social protection systems and had took the decision to pay off its foreign creditors gradually instead of all at once through austerity. The authors also assert:

"Neither Iceland nor any other country that 'protected its people when they needed it most' did so at the cost of economic recovery. Iceland is now booming; unemployment is back below 4% and GDP growth is above 4% - far exceeding any of the other European countries that suffered major recessions."

Although Britain has a financial deficit brought about by the banking crisis, those who have criticised the government and its austerity policies, have suggested that the financial crisis has presented the Tories with the opportunity to dismantle the post-war British welfare state which is anathema to them and to marketise and covertly privatise what remains of public services. It is suggested that a core aim of the Cameron government, has been to hive off public services to their business buddies whose income will be sustained by public contracts and captive markets for essential services.

It is of interest to note that Britain's debt during the post-second world war period, was more than 200% of GDP, (far higher than any European country's today, bar Iceland) and the country's leaders responded by founding the welfare state - "paving the way for decades of prosperity and within ten years debt had halved."

No comments: