Cuts to family budgets bite

Cuts to childcare support alone will leave families up to £1500 a year worse off

Families in Blackburn with Darwen on Wednesday started to feel the real impact of the Conservative-led Government’s decision to cut too deep and too fast as cuts to tax credits, childcare support and child benefit start to take hold.

With family budgets already squeezed by January’s VAT increase and rising inflation Labour is warning that Wednesday’s measures will add to the growing squeeze on millions of families on low and middle incomes – with women and families with children being hardest hit:

  • A total of 570 families people across the Borough who claim support for childcare costs will lose an average of £ 439 a year due to cuts to this support alone, according to independent research by the Resolution Foundation. Some families with two or more children could lose up to £1560.
  • A total of 21,020 families in Blackburn with Darwen will see their child benefit frozen for three years from this month – a real terms cut of £75.40 this year for a family with three children., a total of 39965 children affected.
  • And around 4215 more people on middle incomes in the Borough started paying tax at the 40p higher rate threshold meaning even more families will lose all their child benefit in 2013 – worth £2,500 for a family with three children.

Analysis by the House of Commons Library shows that the changes coming in today, combined with the Government’s VAT rise, will cost a family with three children – and each parent earning £26,000 – over £1,700 a year. This is equivalent to around 5p extra on the basic rate of income tax.

“David Cameron promised to lead the most family-friendly government ever and George Osborne said we’re all in this together. So why are their changes to tax and benefits coming into force today hitting women harder than men and taking so much support from children, with families on low and middle incomes being hit the hardest of all?”

“We’ve been through a global financial crisis – not a recession made in Britain. And like every major economy in the world we now have a big challenge to get the deficit down. So there have to be tough decisions including some spending cuts and fair tax rises like the 50p top rate of tax for the richest and the national insurance rise we proposed last year.

“But as Labour has consistently argued, by making a political choice to cut the deficit further and faster than any other major country George Osborne is going too deep and too fast and putting jobs and growth in Blackburn with Darwen at risk. And he is doing so in an unfair way, giving the banks a tax cut this year while low and middle income families here in Blackburn with Darwen are hit hard

Labour’s shadow chancellor Ed Balls MP added:

“This is a Black Wednesday for thousands of families in the country.

“The Conservative-led government says some families will be better off because of a small cut in income tax. But this change is more than offset by the VAT rise – which the government itself says will cost a family with children an average of £450 a year – and all the other changes coming into effect today. As the independent Institute for Fiscal Studies has said the government is giving a little with one hand, but taking much more away with lots of other hands.

“Cutting too deep and too fast isn’t just hurting families and businesses, it also isn’t working. We’ve now got higher unemployment and slower growth and so the government will actually be borrowing £46 billion more than planned. That’s a vicious circle because with fewer people in work paying taxes, it’s harder to get the deficit down.”

The old slogans are the best!

In those dim and distant days when Margaret Thatcher was running her one-woman campaign to change the face of Britain, the left used to have a slogan about the Tories that said ” they know the cost of everything and the value of nothing!”

And, it struck me this morning how well that slogan sums up the behaviour and direction of the ruling Tory/Lib Dem coalition on Blackburn with Darwen Council and their hasty decision to make a series of cuts to community centres and leisure facilities in an attempt to balance the budget. The cost of the facilities that are going to be scrapped hasn’t been spelt out particularly well but let’s say that, after redundancies are taken into account, it’s around £100,000 but the value of these facilities to the users and to the town are unknown and could be incalculable. Almost inevitably, the facilities are located in the most disadvantaged parts of the town and they offer potentially life-enhancing opportunities to children, in particular, who probably won’t get the chance anywhere else or again. Whether viewed from the perspectve of improving public health and life-expectancy or the chance to take part in sporting or cultural activities from swimming to squash to martial arts to joining a majorettes troupe, these are vital opportuniities that shouldn’t be thrown away by some impulsive piece of wrecking-ball politics.

The Coalition leaders will point to the presence of a brand new leisure facility in Darwen as an alterrnative but, realistically, the chances of a non-driver with children who lives in Shadsworth getting to Darwen on spasmodic public transport is remote and probably won’t happen. Even more crazily, the Coalition leaders may point to their suggestion that the facilities could be run by the local community without any input from the Council. This kind of lunatic idea just shows how far removed these guys are from reality……people with already busy and complex lives don’t have the time to take on responsibilities that are currently being carried out by trained professionals, nor do they have the time to start raising significant sums of money to keep these centres running.

Of course, no-one should be surprised that a Tory-led council is making these type of cuts or these kind of other worldly suggestions because this is what Tories do. It might be a long timing coming but this is a return of the Thatcherites! They want to reduce the size of the state and, where better to start, than the provision of public sporting and cultural facilities that the Tories don’t use and would rather see provided by a profit-making organisation. The Liberal Democrats, however, used to have a different political culture but, in their desperate urge to share power, they have sacrificed their politics and have become cheer-leaders for the Tories.

So, it’s time to dust down that old slogan but, unlike the 1980s, this time it applies to both the Tories and the Liberal Democrats!

Probably, time to get in the loft and see what else is there from those old days because this new vandalism isn’t going to go away for some time!

Cuts too far and too fast is not the answer

There was a coalition government in the 1930s. It compounded the problems of a world-wide recession by cutting spending too far and too fast.

East Lancashire was one the areas worst hit.

But in one respect the thirties’ coalition government was more thoughtful than the present one. It recognised that at such a time community facilities were of even greater importance than in normal times. So, for example, public libraries were kept open, and became a haven for the unemployed.

It’s a pity that the Conservative/Liberal Democrat coalition in our borough have forgotten this, if they ever knew it.

Now, our library service is threatened; and worse still, Shadsworth Leisure Centre, and four Community Centres (Little Harwood, Shadsworth, Ivy Street, and Sudellside) are all earmarked for early closure. This is decision day.

“This is about sorting out the mess the Labour Government left,” says council leader Mike Lee.

By this ‘mess’ I take Coun Lee to mean the levels of public spending inherited from the Labour Government.

Much of this has gone on crucial improvements to key services like Children’s Sure Start Centres, to every school in the borough, to our health service, the new Wainwright Bridge and much else – as well as increased central government grant to the borough.

If Coun Lee had at the time protested about any of this spending, his recent comments would have consistency and credibility. But the reverse was the case – as it was with the then Conservative Opposition who either endorsed our spending plans right up to late 2008, or said that they were ‘tough’.

Cuts on this scale were never spelt out before the election, either locally or nationally. They could and should have been. The only thing that has changed is that the budget deficit is £10 billion less than estimated before election.

Nor is there any good reason for cuts of this scale. It’s not just me or my party saying that.

The Financial Times’ leading economic commentator Samuel Brittan described the current approach as an ‘unnecessary austerity due to a misguided macro-economic policy’ (June 18).

But even if one accepts that cuts on this scale are needed (which I do not) this is not the way to do it.

The current leadership used to claim concern for the more deprived wards of the borough. Why then pick on precisely those areas – to deprive them of their much-needed community facilities?

The money to be saved is paltry – my guess is only around £100,000, after taking account of redundancy costs. And there will be other costs, such as maintenance on unused buildings.

My advice to the local leadership is to go to the library, and take out the ‘General Theory’ of the economist (and proper Liberal) John Maynard Keynes.

He demolished the cut-and-cut again philosophy of that coalition – and what he said then, as Mr Brittan pointed out, is still the best advice today.

But there will be other costs as well. If closed these buildings will lie idle.

Maintenance is always higher on unused buildings; it will be a miracle if they do not become a target for vandals, especially as much of their good work has been in keeping youngsters off the streets with something to do.

And the timescale is gratuitous – with local communities to be given just three months to sort out, if they can, alternative funding.

Many in these areas do not have cars, so can’t travel easily say to Darwen Leisure Centre.

Swingeing cuts store trouble for the future

There’s an old adage that a Budget which is well received turns out to be not so good when its full impact is later felt.

As an observer I thought that for presentation and confidence George Osborne put in a good performance.

A first Budget for a young Chancellor who’s only been in the job for six weeks is a daunting task, and Mr Osborne more than met the standard required of him.

But, as a partisan politician, my compliments about the content of the Budget statement, rather than its delivery, are rather thin, and for good reasons.

The “emergency” with which this Budget has been tagged is of this new Government’s own making.

Their overblown rhetoric, inaccurately comparing the UK’s position with Greece and talking down the inherent position of the UK economy, has forced them into taking some harsh decisions which time is likely to show will be unnecessarily damaging to our economy and to the lives of the vast majority of the British people.

They argue that the deficit is so huge that only the roughest kind of surgery could cure it. Now I am not in the least complacent about the deficit.

However, the issue is not about whether action is taken to cut the deficit – about which there can be no argument – but how quickly and by how much. We would have halved the deficit in four years – and far from Alistair Darling “fiddling” the figures for pre-election consumption, the new Government’s own “Office of Budget Responsibility” shows the deficit for the last financial year, and again for this year, £10bn below Mr Darling’s March estimates.

Our total debt is half that of Greece. When the banking collapse began in 2008 we had similar debt to France and the US (and well below Japan and Italy), and that was where we were due to end up.

There was therefore nothing “unavoidable” about this Budget.

It’s a result of explicit choices made by the Conservative leadership. It will, I believe, undermine the recovery.

And don’t just take that from me.

President Obama has just written a lengthy letter to leaders of the “G20” group of the most industrialised nations, pleading with them not to take action which could put world economic prospects into reverse – in other words opposing the prevailing European view.

Nor is there much “fair” or “progressive” about this Budget. The small print shows the poorest 10 per cent will proportionately lose slightly more of their income from the changes than those with twice their income.

Then there’s the impact on our area. The North West Regional Development Agency is to be abolished.

And in four years all public services apart from the NHS face having one pound in every four cut from their budget.

But whether we agree with it or not we can all understand why the Conservatives have introduced this Budget. It’s what they do. But as for the Liberal Democrats? Words almost fail me. From VAT rises to these huge cuts they are now voting for measures they opposed seven weeks ago, and said they would never back.