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Archive for June 7th, 2010

As I said before.. this is A Government of All the Talents’ (GOATs) see my previous post

Frank Field MP is to lead an independent review of UK Poverty

At long last Frank Field MP will be listened to..

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The average person who leaves welfare and gets a job on the minimum wage is less than a pound an hour better off.

The Coalition government should increase the earnings “disregard” and guarantee that anyone leaving welfare and entering work will be £100 a week better off.

The earnings disregard varies considerably depending on the type of benefit received. It is at its lowest of £5 for a single adult on Jobseekers Allowance. This level was originally set in 1988 and it is even below the National Minimum Wage.

People on Jobseekers Allowance (JSA) have a £5 cap on the amount they can keep each week. Above this amount, benefits are deducted at the same rate as earnings. This presents a real disincentive to work.

In contrast Employment and Support Allowance has an earnings disregard of up to £93.

Whilst it is widely accepted that it is desirable to spend more up front now to improve the incentives to work, a sober assessment of the tight fiscal squeeze means that it may not be possible in the way that we think it is. The Coalition may be forced to prioritise up-font savings in the welfare budget in order to fund better incentives to work. See “Reducing the deficit: Lib/dem pledge means stealing from the poor to pay the poor

See DWP research summary Better-off in Work Credit’

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By 2015, The Prime Minister says, the Government will be paying £70bn a year in interest to service the deficit.

The Prime Minister named and shamed DWP for raising benefit spending by £20bn (giving some families up to £93,000 in Housing Benefit a year),

Measures that are being considered by the Coalition include;

  • Freezing all benefits for 12 months from 2011; this would raise £4.1 billion.
  • Implementing the Lib/Dem pledge to axe Child Tax Credits for couples on a joint income of more than £26,000: saving more than £1 billion a year.

£26,000 is hardly a princely sum and it is far below the national average salary.

This sounds like ‘Robbing the poor to pay the poor’

One ray of light is that ministers have ruled out means-testing child benefits and winter fuel payments.

Also..

Public sector workers earning more than £18,000 a year already face a pay freeze in 2011 and the emergency budget on June 22nd is likely to unveil further curbs in wage rises beyond 2011.

Other news..

See David Cameron’s Speech today

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