The Socialist 4 December 2013 |
Join the Socialist
| PDF | ebook
Them & Us
Robbery not recovery
When government ministers trumpet an economic recovery they must be referring to the amassed fortunes of the super-rich rather than the other 99%.
Even the Centre for Social Justice (CSJ) think tank, set up by welfare slashing Iain Duncan Smith, warned that his flagship policies of the bedroom tax and universal credit (which the CSJ proposed) could plunge people into more debt.
The CSJ also pointed out that 5,000 people are made homeless each year - unable to pay their rent or mortgage, while average household debt now stands at a staggering £54,000 - double that of a decade ago.
Deeper in debt
It's not just Nigella Lawson's former personal assistants who have been hammering the credit card; unsecured consumer debt has virtually tripled over the last 20 years to £160 billion - the equivalent of 94% of the UK's economic output. Only the Republic of Ireland has a higher ratio of personal debt to GDP within Europe.
If you thought that fiddling expenses by establishment party MPs was down to good old fashioned greed, then think again. Commons' speaker John Bercow reckons that MPs fiddled their expenses as a "displacement activity" because Parliament had become irrelevant and ineffective ie because MPs are bored!
Only the uncaring would suggest that said MPs become permanently displaced!
Needless to say it's the poorest that are bearing the brunt of the government's austerity measures. Essential household bills have rocketed by 27% since 2007, with one in six payday loans now being used to cover them. This has generated an annual £4.8 billion market for rip-off payday lenders.
An estimated 500,000 plus households have been forced to rely on food banks to survive. Charities estimate that one in five of the population have gone hungry this year because they can't afford to buy a meal.
The UK's state pension is one of the worst in the developed world according to the Organisation for Economic Cooperation and Development (OECD). Out of the 34 countries in the OECD bloc, only Mexico's state pension fares worse than the UK's.
Here, a worker on average pay can expect a pension worth only 32.6% of final pay when they retire, compared to an OECD average of 54.4%. "With the legislated increases in retirement age to 67 for both men and women, expenditure is only expected to increase by 0.5% over the next 40 years to 8.2% of GDP, well below the OECD average of 11.7%", according to the OECD.
Council tax liabilities
Since 1 April 2013, along with the Con-Dems' hated 'bedroom tax', many low income households have been hit hard by the government's council tax benefit cuts. Previously, low income households could obtain full council tax benefit but after the government cut funding by 10% many local authorities, often Labour controlled, have simply imposed this reduction on its poorest residents.
According to a report by False Economy, who surveyed 200 councils, more than 25 people a day, unable to pay council tax bills, were issued with court liability orders between April and September - a 30% increase. Hundreds of thousands of people have been fined and are now threatened with bailiffs as a result.
What we read
"The top 1% of incomes are close to full recovery (after the financial crisis) while the bottom 99% have hardly started to recover", says Emmanuel Saez of the University of California, Berkeley.
- During 2010-2012 the top 1% of incomes grew by 31% whereas the other 99% increased by only 0.4%
- The typical US family now earns less in real terms than in 1989
- Median household income fell from $51,100 to $51,017 in 2012 and is now 8.3% below its pre-recession peak in 2007 (US Census Bureau)