I take a curious pleasure from combing through my finances each week. Maybe it’s the mathematician in me or maybe it’s the accountant, or maybe I just need to get out more, but knowing that there’s no surprises in there, that the monthly balance is slowly moving upwards and that bills are (largely) getting paid on time brings a certain calming joy.
It didn’t always be this way though.
I still shudder at the way I used to organise the admin in my life. It wasn’t just unpaid bills, it was unopened letters that were getting stuffed in drawers or even piled up in the hallway for weeks on end, and zero checking of what was going in or out of my account. This wasn’t even because of money issues, the money was there for the bills to be paid, that’s the absurdity of it all. But then the scarier looking letters would appear on the doormat and I’d be jolted into action, usually costing me an extra £30 for putting my fingers in my ears for so long and no doubt needlessly ruining my credit score. It was an utter, utter shambles, for years, never to be repeated.
This is all a roundabout way of saying that I honestly can’t imagine what it must feel like to have to choose between council tax, electricity bills, rent and/or food if your financial situation literally depends on your last penny each month. I self-induglently dipped my toe in those waters but have never had financial misery heaped upon me from on high and am mercifully a world away from that type of stress. We probably need financial planning included in the school curriculum as a matter of course (as per other European countries) and a reappraisal of numeracy classes that have been cut back in recent years but sadly even that is way down the country’s depressing priority list.
I am well aware, as my Green votes hopefully testify, that a rebalancing of rich and poor needs to occur, urgently. How you do that with the Tories in charge and when 70% of Scots live off less than the average wage is beyond my simple mind though. I intend to keep voting for the party promising the highest tax increases, in order to finance a proper welfare system, and just hope something will give at one of these elections I suppose.
The more I dip into it though, the more I realise the welfare changes that are on their way are going to be an utter disaster, potentially in every sense of that word. They don’t impact me of course, I couldn’t tell you what pain was meant to be coming my way to help pay down the UK debt as part of ‘we’re all in this together’, but I can tell you I haven’t felt it if it exists. Quite the opposite infact, I’m paying off my mortgage at a rate of knots and frankly, if I chose to be selfish about it, long may it continue. The irony is I’m thinking of finding somewhere with a second bedroom, just around the same time people that need theirs much more than I ever would are having it taken away from them.
From April, those at the rough end of the income scale are in for some serious changes:
– The housing allowance that will go direct to the tenant rather than the landlord will inevitably result in many instances where the rent doesn’t get paid and the tenants get evicted. Total madness.
– The bedroom tax is presumably meant to ensure that precious housing is allocated as efficiently as possible but anecdotal accounts just make the government sound plain old mean (disabled children sharing with siblings, fathers moved into one-bed homes). Totally heartless.
– Caps on the total amount of benefits for households (around £500 per week for lone parents and couples, £350 per week for single adults, including housing benefit).
– Concern that IT capacity to deal with all of this might fall through.
And I’m sure that’s just scratching the surface.
The SNP took a bit of a hammering in the Sunday Herald yesterday for writing out £600m of redundancy cheques in cutting employment rather than using that money to safeguard jobs. Money for firing not hiring as Labour put it and, well, why not, on the face of it? The SNP is getting similar grief on the BBC for not doing anything to offset the impact of the Bedroom Tax. There is, to be fair, little the SNP can do about not having control of the welfare system, little it can do about the fixed block grant it receives from Westminster and little it can do about a coalition government intent on wreaking this kind of economic havoc. That said, it hasn’t helped the situation by denying itself the option of increasing income tax, something that I personally would absolutely be happy to see happening if it meant jobs saved and extra support for those at the sharper end of Osborne’s stick. No pain no gain and all that.
Of course, we learned back in 2010 that the SNP Government chose to not maintain the option of the Scottish Variable Rate that, although deeply limiting, would have afforded Scotland the option of some sort of alternative plan given the dire situation many of us are in. The suggestion back then was that the SVR would not be available until 2013/14, so I do hope someone has asked the question as to whether it will be an option this year? And if not, why not? Patrick Harvie, I guess I’m looking hopefully at you.
That aside, the SNP really needs to show Scotland that it’s still governing, to show that it has answers to current everyday problems and isn’t infact obsessed with the independence referendum that is still in all likelihood over 18 months away. It needs to do something, and be seen to be doing something, even if solutions are merely tactical rather than strategic. This, right here, is where national Governments step in and step up.
This is probably where I’m meant to rhyme off what I would have them do, and I’ll give it a go, but it’s not unreasonable to hope for your Government to act without knowing specifically what needs to be done, or at least hope for a clear explanation as to why they are powerless. For me, whether it’s Government-sponsored credit unions to stamp out exorbitant payday loans, council-backed mortgages to take the pressure off social housing, encouraging job sharing in the private sector and arranging it in the public sector where possible, a McBig Society drive to boost charities or a smarter, smoother solution to housing association arrangements, more needs to be done. I want to see my Scottish Government sweating blood and tears to offset the pain being sent up from London, not getting giddy over Danish actresses who happen to be in town.
Just because it’s difficult, and it is bloody difficult out there, that doesn’t mean Holyrood shouldn’t rise to the challenge. What is the big plan? What makes Scotland different? The stage is yours Salmond & co, and you could lock up a Yes victory with this alone if you find a radical edge that will make a difference.
It’s alright for me of course, tossing these thoughts in my mind as I swirl a nice glass of Merlot around in a warm, cosy middle-class glow but, as the Sunday Herald highlighted in its paper today, Holyrood doesn’t really listen to anybody except the McChattering classes apparently, and April 2013 is closing in fast.
#1 by Steve on February 4, 2013 - 8:27 am
I agree, the SNP need to step up. It seems to me that the SNP have calculated that Westminster inflicted pain will help with the referendum, and softening the blow of the benefits cuts might actually weaken their chance of a yes vote.
But I don’t think blaming Westminster is good enough. For example I’d be happy to see my council tax go up if it were to protect people from the bedroom tax.
#2 by Indy on February 4, 2013 - 8:39 am
I think a lot of people are just beginning to get welfare reform now and I understand that people will want the Scottish Government to fix it but the reality is they can’t.
If we just take the bedroom tax -remembering that this is just one aspect of welfare reform – it is suggested that the Scottish Government can fix this problem by changing the law so that people cannot be evicted because they fall into arrears due to the bedroom tax. Which is a reasonable suggestion and I hope the Scottish Government acts on it. But it won’t solve the problem of housing associations and councils – where they are the housing provider – losing rent.
Most housing associations don’t have huge cash reserves. If they lose a chunk of their income because of the bedroom tax they will need to increase rents and/or cut jobs to make the difference up unless the SG provides the finance to smooth that over. For councils, loss of rent will result in increases in housing debt – and councils cannot increase council tax to pay for rent losses because the housing revenue account is separate and that is a legal requirement. They can’t use council tax payers to make up the difference. That is not an option even if people think it would be a good idea (it wouldn’t be).
And all of this pales in comparison to what could happen when and if universal credit is introduced. I have spoken to people in the housing sector who are saying the best case scenario is 20pc of tenants don’t pay their rent. The worst case scenario would result in housing associations and councils simply being unable to continue to provide housing because the financial underpinning has been destroyed.
I’ve heard some people speculate that this may be the intention behind the Tory plans but I don’t know if I would go that far. I think they just don’t know what they are doing. But if we really end up in the situation where welfare reform is implemented in full as it is currently intended then it is going to be a catastrophe.
What really enrages me I have to say is hearing the likes of Mike Dailly saying the Scottish Government needs to do X,Y and Z to stop welfare reform having the effect it is intended to have. It’s not that I don’t agree with him but where is the logic or reason in campaigning to keep Westminster in charge of welfare and then saying the Scottish Government needs to use its devolved powers to stop Westminster policies? That’s completely twisted.
And it cannot be done. Welfare reform is taking more than £2.5bn out of the Scottish economy, money that is being removed from the poorest and neediest. There is no way that increasing council tax or income tax can raise that level of money without it pushing more households into poverty.
So let’s look at things the way they are. There is a certain amount the Scottish Government can do to mitigate the worst aspects of welfare reform but they can’t stop it or mitigate it entirely. Poor people are going to be under the cosh as long as the Tories are left in charge of welfare. The idea that the Scottish Government can fix this without any control of funding or policy is a fantasy and those who want to keep the Tories in control of welfare need to answer for that because they are the ones who are allowing this to happen.
It is not necessary. No-one would argue that the UK benefits system was perfect – it was far from perfect. But the Tory welfare reform package is not about reforming welfare, it is simply about cutting it. That’s a political choice made by people who couldn’t care less about the human impact because poor people, generally speaking, don’t vote Tory. And they have their mates in the Tory press to drum up the spongers versus strivers rhetoric so the reality of this will never reach the average Tory voter and whatever does get through can easily be written off as hysterical left wing propaganda.
And there is a residual danger of it becoming accepted here, not because people buy into the scroungers theme but because they buy into the idea that we HAVE to cut spending on welfare because it is unaffordable, just like universal benefits are unaffordable. Complete nonsense but every time a Better Together type plays the too wee too poor card they are in fact promoting that idea, intentionally or not.
#3 by Gryff on February 4, 2013 - 5:42 pm
Excellent points. Practically, constitutionally and philosophically it is dangerous to expect the SG to duplicate the work of the Westminster.
The devolved parliament and government have certain responsibilities, if they start ignoring the demarcation they get into an awful mess, should the Westminster government override the SG when the former make decisions in Health or Education we don’t like? Should the SG start raising its own army to supplement the British Army? If not, why should it start recreating a welfare policy?
If we want westminster to control welfare and benefits, we have to put up with that, if we don’t we have to campaign for those areas to be devolved. Simple.
#4 by Steve on February 4, 2013 - 8:21 pm
This isn’t good enough. It doesn’t matter who is right or wrong. Correctly allocating the blame to the UK government is of no consolation to someone suffering the impact of the cut.
#5 by Indy on February 4, 2013 - 8:48 pm
It does matter who is right and wrong and it does matter where responsibility lies.
The Scottish Government has no more power over welfare than it does over foreign policy or defence.
It can no more stop welfare reform than it could stop the Iraq war.
I think people get confused because, while welfare and welfare reform is reserved, the consequences are most clearly seen in services which are devolved -housing being an obvious example (although the impact of welfare reform will be felt across the range of devolved services). So people think that because welfare reform impacts on devolved services and powers, devolved services and powers can be used to stop it.
That is confused thinking. I understand how people get there but it is still confused.
#6 by Alistair on February 4, 2013 - 8:51 am
The SNP have known since 2010 that the bedroom tax was coming. It’s estimated that it will cost £60 million a year to tenants across Scotland. Ha it been a priority they could have easily put in place a process whereby social landlords could have applied to cover the shortfall – perhaps making sure that there were protections for those with a disability/ areas where there is a shortfall of smaller properties (everywhere).
In fact similar to protections offered around the reduction in CTB. The fact they didn’t is a concern – and I really hope it wasn’t a cynical choice so that they could bash Westminster.
#7 by Indy on February 4, 2013 - 10:28 am
I come back to the point that welfare reform is only one aspect of this.
You seem to have created a hierarchy of need here, at the top of which are those affected by the bedroom tax.What is that based on could I ask? And what would be the cost to other people affected by welfare reform of prioritising the bedroom tax above everything else?
It couldn’t just be because the bedroom tax is in the news now, could it?
#8 by Indy on February 4, 2013 - 10:29 am
Sorry I meant to say the bedroom tax is only one aspect of welfare reform.
#9 by Alistair on February 4, 2013 - 3:13 pm
No its the fact the Scottish Government have known since 2010 that this was coming. Don’t be patronising about the fact it is only now in the news – lots of agencies have spent years trying to prepare vulnerable tenants for this.
The government couldn’t have solved the problem outright – but they could have worked with landlords to reduce the impact.
My point is more about the fact that several MSPs are now criticising the changes – when the time to do that was in 2010/ 11.
#10 by Indy on February 4, 2013 - 9:04 pm
Nonsense! The Scottish Government has been preparing for this, check their website. You have not answered my query about why you prioritise the bedroom tax over other aspects of welfare reform.
What about all the people who stand to lose passported benefits?
What about all the people who are getting their DLA cut? We know the number of people who will be assessed to receive a Personal Independence Payment is going to reduce by 23% – that will hit carers as well as those who “fail” their assessment. What about their carers?
What about those who will be affected by the abolition of the Social Fund?
What about lone parents – predicted to be by far the biggest losers in the welfare reform shake-up?
Is the Scottish Government to protect all of them?
Where are they getting the money from?
It is not an option to divert 2.5m from devolved services into welfare payments. Under devolution the Scottish Government is funded to provide devolved services and is legally obliged to do so. This is why they can only take action around the margins, they can’t change the whole thing around.
#11 by Indy on February 4, 2013 - 9:05 pm
That should be 2.5bn obviously! They can divert millions and they are but they can’t divert billions.
#12 by Alasdair Stirling on February 4, 2013 - 9:52 am
Jeff,
I am at a loss to understand why you would want the Scottish Government to make use (even if it was able) of the Scottish Variable Rate. The power to increase/decrease the standard rate of income tax (but only the standard rate) is in practice a highly regressive tax with the burden of tax increases that it brings about falling on the poorest taxpayers. Conversely, any reductions that it brings about provide little (if any) incentive to entrepreneurs and business that might stimulate economic activity.
A cynic might observe that Labour designed the SVR in such a manner so as to ensure that it was a tax power that would never be used. In any event, surely it is manifestly wrong to impose tax increases/decreases for ideological reasons. A better test is that the change in tax rate must give rise to a discernable benefit to society at large, and if that be the test I think that the SVR fails from every viewpoint.
#13 by Una on February 4, 2013 - 7:10 pm
Ach ye cannae blame Nicola for being a bit gooey eyed meeting the Borgen actress though – and if her character’s a role model then surely there’s hope for the more progressive politics to which you (and I) aspire 🙂
#14 by No_Offence_Alan on February 4, 2013 - 8:45 pm
The SNP could at least stop molly-coddling the Edinburgh commuters by bringing back tolls, on both the old and the new Forth bridges.